The US Trade Representative (USTR) announced earlier that it was launching the investigation in response to a recent petition by five US unions.
China's commerce ministry hit back, saying the probe was "full of false accusations, misinterpreting normal trade and investment activities as harming US national security and corporate interests, and blaming China for its own industrial problems".
"China is strongly dissatisfied with this and firmly opposes it," the ministry said in a statement.
US President Joe Biden has been urging a tripling of tariffs on Chinese steel and aluminium that currently exist under Section 301 of the Trade Act, citing "unfair competition".
The so-called Section 301 investigation was the primary tool the Trump administration used in the trade war with China to justify tariffs.
"The US provides hundreds of billions of dollars in discriminatory subsidies to its own industries, but accuses China of adopting so-called 'non-market practices'," Beijing's commerce ministry said.
"In fact, the development of China's industries is the result of enterprises' technological innovation and active participation in market competition," it said, adding that "the US accusations simply have no leg to stand on".
"China will pay close attention to the progress of the investigation and will take all necessary measures to resolutely defend its rights and interests," the statement said.
Biden pushes to triple tariffs on Chinese steel, aluminum
Washington (AFP) April 17, 2024 -
US President Joe Biden is urging a tripling of tariffs on Chinese steel and aluminum as he visits Pittsburgh Wednesday, citing "unfair competition" while seeking to win blue-collar votes in November's election.
Biden's call comes as the US Trade Representative (USTR) announced it is launching a probe into China's trade practices in the shipbuilding, maritime and logistics sectors in response to a recent petition by five US unions.
The president is preparing to address steelworkers in Pittsburgh, the second day of a three-day trip through the crucial swing state of Pennsylvania.
Both Biden and his election rival Donald Trump are competing for vital blue-collar voters, promising to revive American manufacturing.
"Chinese policies and subsidies for their domestic steel and aluminum industries mean high-quality US products are undercut by artificially low-priced Chinese alternatives produced with higher emissions," the White House said in a statement.
A senior US official told reporters that China accounts for about half of global steel production, while exporting the metal at a significantly lower cost than US steel prices.
As the USTR reviews tariffs imposed on China during Trump's administration, Biden is urging to triple an existing rate under Section 301 of the Trade Act.
Currently, the average tariff on steel and aluminum under this section is 7.5 percent.
The so-called Section 301 investigation was the primary tool the Trump administration used in the trade war with China to justify tariffs.
The White House added on Wednesday that Biden is also directing officials to work with Mexico to prevent tariff evasion by China.
- Made in America -
Meanwhile, the USTR investigation into shipbuilding and other sectors comes after a petition last month by unions including the United Steelworkers.
They asked for action to address "unreasonable and discriminatory" policies and practices used by Beijing to dominate these industries.
US Trade Representative Katherine Tai said in a statement that the allegations "reflect what we have already seen across other sectors."
"I pledge to undertake a full and thorough investigation into the unions' concerns," she said.
Biden won the backing last month of the United Steelworkers union and has opposed a bid by Japan's Nippon Steel to take over the Pittsburgh-based US Steel.
The White House said on Wednesday that Biden would continue making clear that it is "vital" for US Steel to remain an American company that is domestically owned and operated.
Biden's National Economic Advisor Lael Brainard said the president understands American steel "built our nation" with steel mills helping to grow the US middle class in states like Pennsylvania and Ohio.
While there is a need to invest in US manufacturing, she said officials also considered it necessary to "protect those investments and workers from unfair exports associated with China's industrial overcapacity."
In a trip to China this month, Treasury Secretary Janet Yellen said the United States "will not accept" a situation where underpriced Chinese goods flood the global market, battering industries elsewhere.
She raised the issue of excess capacity with Chinese counterparts as well.
Liu Pengyu, spokesman for China's embassy in Washington, earlier defended the uptick in exports including electric vehicles as "the result of international division of labor and market demand."
The White House, however, maintained that the Biden administration "recognizes growing concerns that unfair Chinese trade practices, including flooding the market with below-market-cost steel, are distorting the global shipbuilding market and eroding competition."
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