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.

 

Biden Climate Change Obsession Threatens US Security, says Pompeo

Lately, former US Secretary of State, Mike Pompeo said that President Joe Biden’s obsession to decarbonize the United States plays into the hands of adversaries like the Chinese Communist Party (CCP), making them richer and more powerful while imposing costs on Americans and making them less safe.

In an op-ed published on December 05 in the Washington Examiner, Pompeo argued that the Biden administration’s focus on fighting climate change is misguided and will hurt US families while empowering the country’s adversaries.

He took aim at the Inflation Reduction Act, which Biden recently described as the biggest, most important climate bill in the history of our country and which Pompeo said would make life more expensive for American families.

“The statement was telling, Americans were told its purpose was to reduce inflation, but in reality, it was a gas lighting Trojan horse,” Pompeo wrote in the op-ed, referring to Biden’s characterization of the Inflation Reduction Act, which the president made at a recent climate summit in Egypt.

Biden’s description of the measure perfectly encapsulated how climate change and green energy have skewed this administration’s priorities, Pompeo wrote.

When selling the Inflation Reduction Act to the American people, the Biden administration said it was meant to reduce inflation, which has been running close to a 40-year high.

Pompeo argued that in reality, it was a gas lighting Trojan horse meant to conceal the Biden administration’s real priority, which Pompeo said is to fight fossil fuels.

Pompeo also criticized US foreign policy under Biden as being so highly focused on fighting climate change that it diverts attention from the real threats posed by America’s adversaries on the world stage.

“Biden’s obsession to decarbonize America is guaranteed to enrich and empower the Chinese Communist Party,” he argued.

“A sizable portion of the law’s handout will go toward solar energy despite this administration being well aware that Chinese manufacturers dominate 80% of the market for solar panels and that many of them have ties to forced labor in Xinjiang,” he noted as an example.

When Pompeo served as Secretary of State under then President Donald Trump’s administration, he issued a determination that the CCP was guilty of genocide and crimes against humanity over its mistreatment of Uyghurs in Xinjiang.

Chinese officials have denied such allegations.

Congress later passed the Uyghur Forced Labor Prevention Act (UFLPA), which banned the import of goods from Xinjiang and other regions with links to forced labor.

Even though Biden signed the UFLPA into law, Pompeo alleged that the current administration has displayed mixed feelings about enforcing the measure in its bid to win concessions from China on climate change.

John Kerry, the US Special Presidential Envoy for Climate, faced allegations of lobbying against the UFLPA, which his spokesperson denied.

“This is false. Secretary Kerry has a thirty-seven-year record as a Senator and Secretary of State standing up for human rights and defending democracy,” a State Department spokesperson told the Washington Free Beacon.

“As Secretary Kerry has said from the start, the United States and China have mutual interests in solving the climate crisis while there’s still time, even when we fundamentally disagree on other critical issues,” the spokesperson added.

Kerry also sidestepped a question during last year’s COP26 Climate Change Conference, saying the issue was not my lane.

He was responding to a question from a reporter if he had mentioned human rights issues, including forced labor in Xinjiang, in meetings with Chinese officials.

“Well, we’re honest. We’re honest about the differences, and we certainly know what they are and we’ve articulated them, but that’s not my lane here,” Kerry said in November 2021. “My job is to be the climate guy, and stay focused on trying to move the climate agenda forward.”

Pompeo recalled the controversy over Kerry’s remarks and called the climate czar’s comparison of the Biden administration’s climate diplomacy with China to former President Ronald Reagan’s arms reduction talks with the Soviet Union as foolish.

“Reagan was looking to make the world safer, while Biden is enabling genocide in exchange for making energy less affordable and reliable for Americans,” Pompeo said.

“And it is ironic, given the Chinese are building coal-fired power plants at a ridiculous rate and only making the problem worse,” he added.

Pompeo argued that by foolishly prioritizing climate change in its dealings with the CCP over gross human rights abuses, aggressive actions against US allies, and the CCP’s espionage activities in America, the Biden administration has empowered China.

 

Chinese President’s most audacious geopolitical bet

A head-spinning series of seemingly disparate moves over recent months add up to nothing less than a generational wager that Chinese President, Xi Jinping  can produce the world’s dominant power for the foreseeable future by doubling down on his state-controlled economy, party-disciplined society, nationalistic propaganda, and far-reaching global influence campaigns.

With each week, Xi raises the stakes further, from narrowing seemingly mundane personal freedoms like karaoke bars or a teenager’s permitted time for online gaming to three hours weekly to the multi million US dollar investor hit from his increased controls on China’s biggest technology companies and their foreign listings.  

It is only in the context of Xi’s increased repressions at home and expanded ambitions abroad that one can fully understand Australian Prime Minister Scott Morrison’s decision this week to enter a new defense pact, which he called “a forever agreement,” with the United States and the United Kingdom.

Much of the news focus was either on the eight nuclear-powered submarines that Australia would deploy or the spiraling French outrage that their own deal to sell diesel submarines to Australia was undermined by what French officials called a “betrayal” and a “stab in the back” from close allies. France went so far as to recall its ambassador to the United States for the first time in the history of the NATO alliance.

All that noise should not distract from the more significant message of the ground-breaking agreement. Prime Minister Morrison saw more strategic advantage and military capability from the US-UK alignment in a rapidly shifting Indo-Pacific atmosphere, replacing his previous stance of trying to balance US and Chinese interests.

“The relatively benign environment we’ve enjoyed for many decades in our region is behind us,” Morrison said on Thursday. “We have entered a new era with challenges for Australia and our partners.”

For China, that new era has many faces: a rapid rollback of economic liberalization, a crackdown on individual freedoms, an escalation of global influence efforts and military buildup, all in advance of the 20th national party congress in October 2022, where Xi hopes to seal his place in history and his continued rule.

Former Australian Prime Minister Kevin Rudd, one of the world’s leading China experts, points to Xi’s “bewildering array” of economic policy decisions in a recent speech as president of the Asia Society.

They started last October with the shocking suspension of Alibaba financial affiliate Ant Group’s planned initial public offering in Hong Kong and Shanghai, clearly aimed at Alibaba co-founder Jack Ma. Then in April, Chinese regulators imposed a $3 billion fine on Alibaba for “monopolistic behavior.”

In July, China’s cyber regulator removed ride-hailing giant Didi from app stores, while an investigative unit launched an examination of the company’s compliance with Chinese data-security laws.

Then this month, China’s Transport Ministry regulators summoned senior executives from Didi, Meituan and nine other ride-hailing companies, ordering them to “rectify” their digital misconduct. The Chinese state then took an equity stake in ByteDance, the owner of TikTok, and in Weibo, the micro-blogging platform.

Xi was ready to accept the estimated US$1.1 trillion cost in shareholder value wiped from China’s top six technology stocks alone between February and August. That doesn’t factor in further losses among the education, transportation, food delivery, entertainment and video gaming industries.

Less noticed have been a dizzying array of regulatory actions and policy moves whose sum purpose appears to be strengthening state control over, well, just about everything. 

“The best way to summarize it,” says Rudd, “is that Xi Jinping has decided that, in the overall balance between the roles of the state and the market in China, it is in the interests of the Party to pivot toward the state.” Xi is determined to transform modern China into a global great power, “but a great power in which the Chinese Communist Party nonetheless retains complete control.”

That means growing controls as well over the freedoms of its 1.4 billion citizens.

Xi has acted, for example, to restrict the video gaming of school-aged children to three hours a week, and he has banned private tutoring. Chinese regulators have ordered broadcasters to encourage masculinity and remove “sissy men,” or niang pao, from the airwaves. Regulators banned “American Idol”-style competitions and removed from the internet any mention of one of China’s wealthiest actresses, Zhao Wei.

“The orders have been sudden, dramatic and often baffling,” wrote Lily Kuo in the Washington Post. Jude Blanchette of the Center for Strategic and International Studies says, “This is not a sector-by-sector rectification; this is an entire economic, industry and structural rectification.”

At the same time, President Xi has launched a push to share the virtues and successes of the Chinese authoritarian model with the rest of the world. 

“Beijing seeks less to impose a Marxist-Leninist ideology on foreign societies than to legitimate and promote its own authoritarian system,” Charles Edel and David Shullman, the recently appointed director of the Atlantic Council’s new China Global Hub, wrote in “Foreign Affairs.” “The CCP doesn’t seek ideological conformity but rather power, security, and global influence for China and for itself.”

The authors detail China’s global efforts to not remake the world in its image, but rather “to make the world friendlier to its interests — and more welcoming to the rise of authoritarianism in general.”

Those measures include “spreading propaganda, expanding information operations, consolidating economic influence, and meddling in foreign political systems” with the ultimate goal of “hollowing out democratic institutions and norms within and between countries,” Edel and Shullman write.

Within President Xi’s bold bet lie two opportunities for the US and its allies.

The first is that Xi, by overreaching in his controls at home, will undo just the sorts of economic and societal liberalization China needs to succeed. At the same time, the world’s democracies, like Australia, are growing more willing to seek a common cause to address Beijing.

In the end, however, Xi’s concerted moves require an equally concerted response from the world’s democracies. The French-US crisis following the Australian defense deal this week provides just one example of how difficult that will be to achieve and sustain.