United States targets Chinese steel, maritime and logistics sectors

President United States, Joe Biden has called for tripling the existing tariff rate on Chinese steel and aluminium, just as the US Trade Representative’s (USTR) office announced the launch of yet another Section 301 investigation into China’s maritime, logistics, and shipbuilding sectors.

Biden told the USTR to raise the tariff on steel and aluminium imports from China – already under Trump-era duties – from 7.5% to 22.5%, according to a statement by the White House.

He also sent senior envoys to pressure Mexico to prevent Chinese steel and aluminium from transferring through Mexico to evade tariffs.

Biden’s move was made public just ahead of his visit to the headquarters of the United Steelworkers Union in Pittsburgh as part of his re-election campaign in the swing state of Pennsylvania.

The new investigation under Section 301 of the Trade Act of 1974 was launched after reviewing a “serious and concerning” petition by five national labour unions accusing China of using “unfair, non-market policies and practices” to “dominate the maritime, logistics, and shipbuilding sectors”, the USTR office said.

“The allegations reflect what we have already seen across other sectors, where China utilizes a wide range of non-market policies and practices to undermine fair competition and dominate the market, both in China and globally,” US trade representative Katherine Tai was quoted as saying.

“I pledge to undertake a full and thorough investigation into the unions’ concerns.”

A Section 301 investigation examines whether a foreign government’s acts, policies, or practices are unreasonable or discriminatory, and whether they burden or restrict US commerce.

If the investigation determines foreign practices have unfairly affected US commerce, the USTR may take “appropriate and feasible action” to remedy the unfair practices, including imposing duties and other import restrictions such as fees.

The USTR was seeking public comments and would hold a public hearing in connection with the investigation, the statement said.

The USTR added that it had requested consultations with the Chinese government about the investigation.

The 137-page petition, along with hundreds of supporting documents, was presented to the USTR office on March 12.

The petition lists the Chinese government’s actions, including providing loans from state-owned banks, equity infusions and tax preferences as well as provisioning steel at below-market prices and issuing loans to support the construction of thousands of vessels in China for export.

It highlights some unfair practices by Beijing, including ordering Chinese companies to buy and use Chinese-built products, directing mergers, and blocking alliances with foreign companies.

The coalition of labour unions includes the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union; the International Association of Machinists and Aerospace Workers; the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers; the International Brotherhood of Electrical Workers; and the Maritime Trades Department.

The petition was also endorsed by two US senators, Democrats Tammy Baldwin of Wisconsin and Bob Casey of Pennsylvania.

During his administration from 2017 to 2021, former US president Donald Trump launched various Section 301 investigations into Chinese imports and imposed punitive tariffs, which triggered retaliation by China and began a trade war that continues today.

 

Indian Frustration or War Mania

According to news reports, New Delhi has called off a meeting between the Pakistani and Indian foreign ministers on the sidelines of the United Nations General Assembly, just a day after confirmation.

The reason for cancellation of meeting was stated by Indian External Affairs Spokesperson Raveesh Kumar, "unclean intentions" on Pakistan's side. He said, "It is obvious that behind Pakistan's proposal for talks to make a fresh beginning, the evil agenda of Pakistan stands exposed and the true face of the new Prime Minister Imran Khan has been revealed to the world in his first few months in office," he said. "Any conversation with Pakistan in such an environment would be meaningless."

Pakistan’s Foreign Minister Shah Mahmood Qureshi termed the development "unfortunate", saying, "We had already told India that if they take one step towards us, we will take two. However, it seems that they faltered after taking just one step."

PPP Senator Sherry Rehman sent a Twitter condemning the move, saying, "Shame that on International Peace Day, India has refused to talk peace with Pakistan in even a routine manner at the UN on the sidelines of the General Assembly." "Running from talks won’t change the fact that this time Indian repression in Kashmir has been noticed in a UN report ", she added.

The Indian arrogance can be attributed to a recently signed agreement between the US and India that would pave the way for New Delhi to buy advanced American weaponry and to share sensitive military technology, strengthening their military partnership as both powers warily eyes the rise of China. The countries also promised to hold joint land, sea and air military exercises in India next year.  

On the day Jim Mattis, the US Defense Secretary had said, “Today’s fruitful discussion illustrated the value of continued cooperation between the world’s two largest democracies. We will work together for a free and prosperous Indo-Pacific.”

If I refer back to the visit of Jim Mattis, Defense Secretary and Mike Pompeo, State Secretary, despite the friendly handshakes and flattering remarks exchanged as the two met with their counterparts, their counties remain deeply skeptical of each other.

The US is worried about how willing India will be to openly counter China as the Chinese expand their influence in the waters between the Indian and Pacific Oceans. It is also unhappy about India’s reluctance to cut trade relations with Iran.

India views the Trump administration as erratic, and it is troubled by the United States’ recent barriers to trade, which threaten to impose tariffs on Indian goods and force New Delhi to import more American products.

I would also attribute Indian attitude as assign of frustration, because the US has failed in convincing Pakistan to allow Indian goods to pass through for Afghanistan and Iran. It is irony of fate that the US remains dependent on Pakistan for the passing of NATO supplies. The US has not forgotten the adversities faced after Pakistan put a temporary embargo on the movement of NATO supplies.