Biden vows to shield US steel industry by blocking Japanese merger and seeking new Chinese tariffs

PITTSBURGH (AP) — President Joe Biden suggested to cheering, unionized steelworkers on Wednesday that his administration would thwart the acquisition of U.S. Steel by a Japanese company, and he called for a tripling of tariffs on Chinese steel, seeking to use trade policy to win over working-class votes in the battleground state of Pennsylvania.

The Democratic president’s pitch comes as Donald Trump, his likely Republican opponent, tries to chart a path back to the White House with tough-on-China rhetoric and steep tariff proposals of his own.

During a visit to the Pittsburgh headquarters of United Steelworkers, Biden said U.S. Steel “has been an iconic American company for more than a century and it should remain totally American.”

Administration officials are reviewing the proposed acquisition of U.S. Steel by Japan’s Nippon Steel, and Biden said last month he would oppose the deal, saying it was “vital for it to remain an American steel company that is domestically owned and operated.”

But in front of a union audience, he went much further in pledging he may block it.

“American-owned, American-operated by American union steelworkers — the best in the world — and that’s going to happen, I promise you,” he said.

In another step that his administration argues can protect domestic steelworkers, Biden also announced that he will push for higher tariffs on Chinese steel and aluminum, aiming to insulate American producers from a flood of cheap imports.

Biden's push on steel reflects the intersection of international trade policy with his reelection effort, although the White House insisted they were more about shielding American manufacturing from unfair trade practices overseas than firing up a union audience.

The current tariff rate is 7.5% for both steel and aluminum but could climb to 25% under Biden's proposal. The president said he was asking his trade representative to seek the increase, and separate tariffs of 10% on aluminum and 25% on steel would also remain in place.

The U.S. imported roughly $6.1 billion in steel products in the 12 months ending in February 2023, but just 3% of those imports came from China, according to Census Bureau figures. Citing existing trade barriers, the American Iron and Steel Institute said China last year accounted for even less — just 2.1% of U.S. steel imports — making it America’s seventh-biggest source of foreign steel.

However, a senior administration official said there are concerns about China ramping up exports, making the higher tariff levels necessary as a preventative measure.

Liu Pengyu, a spokesman for the Chinese Embassy in Washington, said the “U.S. is making the same mistake again and again” by seeking increased tariffs. In a statement, he also dismissed levies already in place as “the embodiment of unilateralism and protectionism of the U.S.”

Biden insisted that getting tougher on China was sound policy, including when it comes to preventing the exportation of advanced technologies that could “undermine our national security.”

He said he delivered a similar message to Chinese President Xi Jinping during previous conversations, telling him, “You’ll use them for all the wrong reasons, so you’re not going to get those advanced computer chips.”

Biden criticized Trump for failing to take such steps, saying that “for all his tough talk on China, it never occurred to my predecessor to do any of that.”

The administration also promised to pursue investigations against countries and importers that try to saturate existing markets with Chinese steel, and said it was working with Mexico to ensure that Chinese companies cannot circumvent the tariffs by shipping steel there for subsequent export to the United States.

“The president understands we must invest in American manufacturing. But we also have to protect those investments and those workers from unfair exports associated with China’s industrial overcapacity,” said White House national economic adviser Lael Brainard.

U.S. Trade Representative Katherine Tai also announced Wednesday that her office, acting on a petition from five national labor unions, was investigating China for “targeting the maritime, logistics and shipbuilding sectors for dominance.”

China's Commerce Ministry responded hours later that the “U.S. petition is full of false accusations.”

It ”misinterprets normal trade and investment activities as damaging to U.S. national security and corporate interests," the ministry said in a statement. “And blames China for the U.S.'s own industrial issues, lacking factual basis and running counter to common sense in economics.”

China produces about half of the world’s steel and is making far more than its domestic market needs. It sells steel on the world market for less than half what U.S.-produced steel costs, senior Biden administration officials said.

The first step to the higher tariffs is the completion of a review of Chinese trade practices. Once Biden gives the official authorization, there will be a public notice and a comment period that could take weeks.

Biden is on a three-day Pennsylvania swing that began in his childhood hometown of Scranton on Tuesday and will include a visit to Philadelphia on Thursday. After ignoring the first two days of Trump’s hush money trial in New York, Biden made a veiled reference to it on Wednesday, joking that his predecessor is “busy right now.”

Biden's announcement on steel tariffs was cheered by U.S. steelmakers. Kevin Dempsey, president of the American Iron and Steel Institute, accused China of disrupting “world markets both by subsidizing the production of steel and other products, and by dumping those products in the U.S. and other markets.”

To coincide with the announcement, Biden’s campaign released a 60-second ad that will air on Pennsylvania television for the next five days. It features a steelworker, who is also a small-town mayor, praising the president’s economic policies.

Higher tariffs can carry major economic risks. Steel and aluminum could become more expensive, possibly increasing the costs of cars, construction materials and other key goods for U.S. consumers. Also, inflation has already been a drag on Biden's political fortunes, and his turn toward protectionism echoes Trump's playbook.

The former president, who has said he would never allow the acquisition of U.S. Steel by a foreign company to go through, imposed broader tariffs on Chinese goods during his administration and has threatened to increase levies on Chinese goods unless they trade on his preferred terms as he campaigns for another term.

An outside analysis by the consultancy Oxford Economics has suggested that putting in place the tariffs Trump has proposed could hurt the overall U.S. economy.

Weissert reported from Washington. Associated Press writer Josh Boak in Washington contributed to this report.

President Joe Biden is greeted after walking into a Sheetz after stopping enroute to Pittsburgh International Airport, Wednesday, April 17, 2024, in Pittsburgh, Pa. (AP Photo/Alex Brandon))

President Joe Biden is greeted after walking into a Sheetz after stopping enroute to Pittsburgh International Airport, Wednesday, April 17, 2024, in Pittsburgh, Pa. (AP Photo/Alex Brandon)

President Joe Biden walks into a Sheetz after stopping enroute to Pittsburgh International Airport, Wednesday, April 17, 2024, in Pittsburgh, Pa. (AP Photo/Alex Brandon)

President Joe Biden speaks at a campaign event at United Steelworkers Headquarters, Wednesday, April 17, 2024, in Pittsburgh, Pa. (AP Photo/Alex Brandon)

President Joe Biden meets with steelworkers at a campaign event at United Steelworkers Headquarters, Wednesday, April 17, 2024, in Pittsburgh, Pa. (AP Photo/Alex Brandon)

President Joe Biden speaks at the United Steelworkers Headquarters in Pittsburgh, Wednesday, April 17, 2024. (AP Photo/Gene J. Puskar)

President Joe Biden is greeted after walking into a Sheetz after stopping enroute to Pittsburgh International Airport, Wednesday, April 17, 2024, in Pittsburgh, Pa. (AP Photo/Alex Brandon))

President Joe Biden steps out from behind a curtain before greeting steelworkers at United Steelworkers Headquarters, Wednesday, April 17, 2024, in Pittsburgh, Pa. (AP Photo/Alex Brandon)

President Joe Biden speaks at a campaign event at United Steelworkers Headquarters, Wednesday, April 17, 2024, in Pittsburgh, Pa. (AP Photo/Alex Brandon)

President Joe Biden, center, poses a group photo during his visit to United Steelworkers Headquarters, Wednesday, April 17, 2024, in Pittsburgh, Pa. (AP Photo/Alex Brandon)

President Joe Biden speaks at the United Steelworkers Headquarters in Pittsburgh, Wednesday, April 17, 2024. (AP Photo/Gene J. Puskar)

President Joe Biden reaches to touch the name of his uncle Ambrose J. Finnegan, Jr., on a wall at a Scranton war memorial, Wednesday, April 17, 2024, in Scranton, Pa. His uncle died in WWII. (AP Photo/Alex Brandon)

President Joe Biden speaks with reporters as he departs on Air Force One at Wilkes-Barre Scranton International Airport, Wednesday, April 17, 2024, in Scranton, Pa. (AP Photo/Alex Brandon)

President Joe Biden greets patrons at Zummo's Cafe, Wednesday morning, April 17, 2024, in Scranton, Pa. (AP Photo/Alex Brandon)

President Joe Biden greets patrons at Zummo's Cafe, Wednesday morning, April 17, 2024, in Scranton, Pa. (AP Photo/Alex Brandon)

President Joe Biden visits the War Memorial in Scranton, Pa., Wednesday, April 17, 2024, and touches the wall near his uncle's name, Ambrose J Finnegan Jr., who died in WWII. (AP Photo/Alex Brandon)

President Joe Biden greets local police officers as he arrives to depart Pennsylvania on Air Force One at Wilkes-Barre Scranton International Airport, Wednesday, April 17, 2024, in Scranton, Pa. (AP Photo/Alex Brandon)

President Joe Biden visits the War Memorial in Scranton, Pa., with Scranton Mayor Paige Cognetti, right, Wednesday, April 17, 2024. Biden's uncle, Ambrose J Finnegan Jr., who died in WWII, is listed on the memorial wall. (AP Photo/Alex Brandon)

President Joe Biden visits the War Memorial in Scranton, Pa., with Scranton Mayor Paige Cognetti, right, Wednesday, April 17, 2024. Biden's uncle, Ambrose J Finnegan Jr., who died in WWII, is listed on the memorial wall. (AP Photo/Alex Brandon)

President Joe Biden arrives at Zummo's Cafe, Wednesday morning, April 17, 2024, in Scranton, Pa., with Scranton Mayor Paige Cognetti, right. (AP Photo/Alex Brandon)

President Joe Biden waves as he arrives to depart on Air Force One at Wilkes-Barre Scranton International Airport, Wednesday, April 17, 2024, in Scranton, Pa. (AP Photo/Alex Brandon)

President Joe Biden visits the War Memorial in Scranton, Pa., Wednesday, April 17, 2024. Biden's uncle, Ambrose J Finnegan Jr., who died in WWII, is listed on the wall. (AP Photo/Alex Brandon)

President Joe Biden speaks as he visits the War Memorial in Scranton, Pa., with Scranton Mayor Paige Cognetti, Wednesday, April 17, 2024. Biden's uncle, Ambrose J Finnegan Jr., who died in WWII, is listed on the memorial wall. (AP Photo/Alex Brandon)

President Joe Biden visits the War Memorial in Scranton, Pa., Wednesday, April 17, 2024, and touches the wall near his uncle's name, Ambrose J Finnegan Jr., who died in WWII. (AP Photo/Alex Brandon)

President Joe Biden greets visitors as he visits the War Memorial in Scranton, Pa., Wednesday, April 17, 2024. Biden's uncle, Ambrose J Finnegan Jr., who died in WWII, is listed on the wall. (AP Photo/Alex Brandon)

President Joe Biden greeting steelworkers at United Steelworkers Headquarters, Wednesday, April 17, 2024, in Pittsburgh, Pa. (AP Photo/Alex Brandon)

President Joe Biden greeting steelworkers at United Steelworkers Headquarters, Wednesday, April 17, 2024, in Pittsburgh, Pa. (AP Photo/Alex Brandon)

President Joe Biden speaks at a campaign event, Tuesday, April 16, 2024, in Scranton, Pa. Biden has begun three straight days of campaigning in Pennsylvania in his childhood hometown of Scranton. The Democratic president is using the working class city of roughly 75,000 as the backdrop for his pitch for higher taxes on the wealthy. (AP Photo/Alex Brandon)

President Joe Biden speaks at a campaign event, Tuesday, April 16, 2024, in Scranton, Pa. Biden has begun three straight days of campaigning in Pennsylvania in his childhood hometown of Scranton. The Democratic president is using the working class city of roughly 75,000 as the backdrop for his pitch for higher taxes on the wealthy. (AP Photo/Alex Brandon)

HONG KONG (AP) — Asian stocks fell Wednesday with most of the markets in the region closed for a holiday. Meanwhile, U.S. stocks closed out their worst month since September.

Oil prices were lower and U.S. futures were mixed.

Tokyo’s Nikkei 225 index lost 0.8%, down to 38,089.09 in early trading after the country’s factory activity experienced a milder shrink in April, as the manufacturing purchasing managers’ index from au Jibun Bank rose to 49.6 in April from 48.2 in March. A PMI reading under 50 represents a contraction, and a reading of 50 indicates no change.

The yen continues to struggle. On Wednesday, the U.S. dollar rose to 157.89 Japanese yen from 157.74 yen.

Australia’s S&P/ASX 200 dipped 1.2% to 7,574.20. Other markets in the region were closed due to the Labor Day holiday.

On Tuesday, the S&P 500 tumbled 1.6% to cement its first losing month in the last six, and ended at 5,035.69. Its momentum slammed into reverse in April — falling as much as 5.5% at one point — after setting a record at the end of March.

The Dow Jones Industrial Average dropped 1.5% to 37,815.92, and the Nasdaq composite lost 2% to 15,657.82.

Stocks began sinking as soon as trading began, after a report showed U.S. workers won bigger gains in wages and benefits than expected during the first three months of the year. While that’s good news for workers and the latest signal of a solid job market, it feeds into worries that upward pressure remains on inflation.

It followed a string of reports this year that have shown inflation remains stubbornly high. That’s caused traders to largely give up on hopes that the Federal Reserve will deliver multiple cuts to interest rates this year. And that in turn has sent Treasury yields jumping in the bond market, which has cranked up the pressure on stocks.

Tuesday’s losses for stocks accelerated at the end of the day as traders made their final moves before closing the books on April, and ahead of an announcement by the Federal Reserve on interest rates scheduled for Wednesday afternoon.

No one expects the Federal Reserve to change its main interest rate at this meeting. But traders are anxious about what Fed Chair Jerome Powell may say about the rest of the year.

GE Healthcare Technologies tumbled 14.3% after it reported weaker results and revenue for the latest quarter than analysts expected. F5 dropped 9.2% despite reporting a better profit than expected.

McDonald’s slipped 0.2% after its profit for the latest quarter came up just shy of analysts’ expectations. It was hurt by weakening sales trends at its franchised stores overseas, in part by boycotts from Muslim-majority markets over the company’s perceived support of Israel.

Helping to keep the market’s losses in check was 3M, which rose 4.7% after reporting stronger results and revenue than forecast. Eli Lilly climbed 6% after turning in a better profit than expected on strong sales of its Mounjaro and Zepbound drugs for diabetes and obesity. It also raised its forecasts for revenue and profit for the full year.

Stocks of cannabis companies also soared after The Associated Press reported the U.S. Drug Enforcement Administration will move to reclassify marijuana as a less-dangerous drug in a historic shift. Cannabis producer Tilray Brands jumped 39.5%.

The earnings reporting season has largely been better than expected so far. Not only have the tech companies that dominate Wall Street done well, so have companies across a range of industries.

In the bond market, the yield on the 10-year Treasury rose to 4.67% from 4.61%.

Benchmark U.S. crude fell 76 cents to $81.17 a barrel. Brent crude, the international standard, lost 72 cents to $86.51 a barrel.

In currency trading, the euro cost $1.0658, down from $1.0663.

A person passes the New York Stock Exchange on Tuesday, April 30, 2024 in New York. Global shares are trading mostly higher as investors keep their eyes on potentially market-moving reports expected later this week. (AP Photo/Peter Morgan)

A person looks at an electronic stock board showing Japan's stock prices at a securities firm Tuesday, April 30, 2024, in Tokyo. Asian shares mostly rose Tuesday, as investors kept their eyes on potentially market-moving reports expected later this week. (AP Photo/Eugene Hoshiko)

A window cleaner works along the window of at a securities firm building Tuesday, April 30, 2024, in Tokyo. Japanese characters read as "securities." (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan Yen/U.S. dollar exchange rate at a securities firm Tuesday, April 30, 2024, in Tokyo. Asian shares mostly rose Tuesday, as investors kept their eyes on potentially market-moving reports expected later this week. (AP Photo/Eugene Hoshiko)

A person stands in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 30, 2024, in Tokyo. Asian shares mostly rose Tuesday, as investors kept their eyes on potentially market-moving reports expected later this week. (AP Photo/Eugene Hoshiko)

A person walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 30, 2024, in Tokyo. Asian shares mostly rose Tuesday, as investors kept their eyes on potentially market-moving reports expected later this week. (AP Photo/Eugene Hoshiko)

People pass by an electronic stock board showing Japan's Nikkei 225 index, left, and U.dollar/Japanese yen conversion rate at a securities firm Tuesday, April 30, 2024, in Tokyo. Asian shares mostly rose Tuesday, as investors kept their eyes on potentially market-moving reports expected later this week.(AP Photo/Eugene Hoshiko)

People stand in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Tuesday, April 30, 2024, in Tokyo. Asian shares mostly rose Tuesday, as investors kept their eyes on potentially market-moving reports expected later this week.(AP Photo/Eugene Hoshiko)