Shares of aluminum and steel companies rose Wednesday after US President Joe Biden urged the trade representative to significantly increase the tariff rate on steel and aluminum imports from China.
Currently set at an average of 7.5%, Biden is advocating for a substantial increase in these tariffs. His announcement comes ahead of a planned visit to the United Steelworkers headquarters in Pittsburgh, Pennsylvania—a critical swing state.
Stocks like Alcoa Corp. (NYSE:) and Cleveland-Cliffs Inc (NYSE:) rose higher by 2.6% and 1.6% in premarket trading, respectively.
The move is part of Biden’s broader strategy to indicate clearly that his administration is serious about addressing unfair trade practices.
During a recent visit to China, Treasury Secretary Janet Yellen expressed concerns about Chinese subsidies to industries producing clean energy products, such as solar panels and electric vehicles. Yellen highlighted the risk of these products flooding global markets, undermining international competition due to their artificially low prices.
“Tariffs were not off the table if those overcapacity qualms went unaddressed,” Yellen told CNBC.
In response, Chinese officials and state-controlled media have rebutted claims of overcapacity, attributing their ample clean energy supply to continuous innovation rather than state intervention.
As the debate continues, the Biden administration is reinforcing its position on protecting global trade norms and domestic industries from potential market disruptions caused by unfair practices.
“China’s policy-driven overcapacity poses a serious risk to the future of the American steel and aluminum industry,” National Economic Council Director Lael Brainard said.
“China cannot export its way to recovery. China is simply too big to play by its own rules.”
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