Biden Launches Probe into China’s Shipbuilding Practices

Administration Targets Unfair Trade Tactics Amid Calls for Tariff Hikes

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President Joe Biden, along with the U.S. Trade Representative, announced today the commencement of an investigation into China’s shipbuilding practices. This development coincides with the administration’s announcement of intentions to triple tariffs on Chinese steel and aluminum imports, alongside efforts to thwart attempts by China and other nations to bypass U.S. trade restrictions through Mexico.

The White House emphasized the administration’s acknowledgment of mounting apprehensions regarding unfair trade practices by China, particularly its inundation of the market with steel priced below market value, thus distorting the global shipbuilding landscape and undermining fair competition. Despite noting a decade-low U.S. trade deficit with China, the administration accuses China of engaging in unfair competition by offering artificially low-priced alternatives, particularly in steel—a vital component in both commercial and naval shipbuilding, deemed as the linchpin of the American economy.

These concerns, particularly regarding China’s subsidies and state intervention in the shipbuilding sector, were articulated in a petition to the U.S. Trade Representative by five labor unions in March. The petition urged an investigation into Chinese actions, policies, and practices across maritime, logistics, and shipbuilding domains.

U.S. Trade Representative Ambassador Katherine Tai underscored the gravity of the allegations in the petition, characterizing China’s efforts to dominate maritime industries through unfair means as a serious concern. The initiation of this investigation marks the inception of a process involving comments and hearings, potentially leading to tariffs on Chinese-built vessels docking at U.S. ports.

Highlighting that China accounts for more than half of global steel exports, administration officials pointed to the overcapacity generated by non-market investments in steel and aluminum industries. The White House outlined China’s exports as among the most emissions-intensive globally, further distorting the shipbuilding market and undermining fair competition.

China’s Ministry of Commerce swiftly responded to the accusations, denouncing the initiative as riddled with false allegations and misinterpretations of normal trade activities. They reiterated China’s stance, portraying the U.S. administration’s actions as leveraging the “China card” for political gain.

The White House referenced over 30 anti-dumping and countervailing duties already imposed by the U.S. Department of Commerce on steel-related products. President Biden clarified that while not seeking a trade war, measures would be taken against countries and importers flooding the market with inexpensive products.

Additionally, President Biden announced collaborative efforts with Mexico to prevent evasion of tariffs on steel and aluminum imports from China and other nations through product transshipments into the United States via Mexico.

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