The United Steelworkers union on Tuesday asked President Joe Biden to open a trade investigation into alleged Chinese unfair economic practices in the shipbuilding and maritime logistics sectors.
The USW and other unions filed a petition with the US Trade Representative outlining alleged discriminatory practices that have helped China dominate global shipbuilding, according to people familiar with the move.
The petition was made under Section 301 of the Trade Act of 1974 — the same statute that former president Donald Trump used to justify the imposition of tariffs on Chinese imports when he launched a trade war with Beijing in 2018.
The administration has 45 days to decide whether to respond by opening an investigation. The USTR is already conducting a review of the Trump-era tariffs to determine if and how they should be restructured.
The White House did not comment before the filing, which was first reported by the Financial Times. After the filing, US trade representative Katherine Tai said she looked forward to reviewing the case.
“We have seen the [People’s Republic of China] create dependencies and vulnerabilities in multiple sectors, like steel, aluminum, solar, batteries and critical minerals, harming American workers and businesses and creating real risks for our supply chains,” Tai said. “I look forward to reviewing this petition in detail”.
Speaking before the unions filed the petition, USW president David McCall told the FT: “The United States was once a leader in the commercial shipbuilding industry, but over the past two decades, the Chinese Communist party enacted a comprehensive strategy to dominate the full spectrum of global trade, making massive investments in shipbuilding and engaging in predatory trade practices”.
The union had been “proud” to work with the Biden administration on growing domestic supply chains again, he added, and was now seeking “to build on this momentum by reviving our commercial shipbuilding industry, both ensuring a steady supply of needed goods and creating good, community-sustaining jobs”.
The American steel industry has become a political issue in the 2024 presidential election after Nippon Steel last year launched a $14.9bn takeover of US Steel, headquartered in Pittsburgh, a city in the critical swing state of Pennsylvania. The USW, which is based in Pittsburgh, also opposes the Nippon Steel deal.
Experts said Biden would be unlikely to turn down the request for a 301 probe. Trump, the presumptive Republican presidential nominee, would almost certainly criticise him for not taking up the petition.
“For a Democratic, pro-labour president in an election year, this is a no-brainer,” said Evan Medeiros, a Georgetown University China expert and author of a recent report on US-China relations. “The broader challenge is that we are now in an era of US-China ties where domestic politics in both countries is as influential, if not more so, than geopolitics in shaping relations.”
China is likely to become an increasingly political issue as the US election draws near. Biden last week said he would sign legislation to force ByteDance, the Chinese owner of video-sharing platform TikTok, to divest the app if lawmakers approve a bill expected to be up for a vote in the House on Wednesday.
Any move to open an investigation will potentially create more tension in US-China relations, threatening the stabilisation that has occurred since Biden met his counterpart Xi Jinping in November. But Biden officials have stressed that the US would continue to take security measures and last week the president ordered an investigation into whether Chinese smart cars pose a national security threat to Americans.
The USW petition will claim that Chinese shipbuilders have benefited from protectionist government policies, including preferential financing ranging from state-run bank loans to tax breaks.
Over the past two decades, China has gone from producing roughly 12 per cent of global commercial ships by tonnage to more than 50 per cent in 2023, according to Clarksons Research, a maritime consultancy.
One person familiar with the case said USW would propose relief measures including the imposition of port fees on Chinese-built vessels to create a fund to help revitalise US shipbuilding.
The push comes after Congress provided $52bn to help rebuild the US domestic chip industry and as Biden has shown a willingness to pursue industrial policy through legislation such as the Inflation Reduction Act.
The petition will also raise concerns about Logink, a Chinese software platform that provides data on global supply chain logistics, which critics say poses a national security risk to the US.
“Ninety per cent of US military cargo travels by commercial vessels and the CCP would know the location of and destination of those goods,” said the person familiar with the case. “Logink is part of the CCP’s overall strategy for national dominance and power.”
The US transportation department recently said China was pushing data standards that facilitate Logink’s use in critical port infrastructure and very likely provided Beijing the ability to access or collect “sensitive logistics data”.
Logink did not immediately respond to a request for comment.
Speaking after the petition was filed, Pennsylvania Democratic senator Bob Casey said the Chinese government was a “predatory regime” that had been undermining US industry and workers for many years.
“We have to crack down hard on this regime and hold this regime and particularly President Xi Jinping accountable for what his regime does,” he said.
Additional reporting by Joe Leahy in Beijing