Thursday, May 6, 2021

Biden, in first trade move, reimposes a Trump tariff

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The bigger picture: The move casts a pall over the hopes in the business sector in the U.S. and in Europe that Biden would roll back the tariffs that Trump put on steel and aluminum imports using Section 232 of the 1962 Trade Expansion Act. That provision allows the president to restrict imports to protect national security.

Trump imposed a 25 percent tariff on steel and a 10 percent tariff on aluminum in 2018. But on Jan. 19, he signed a proclamation lifting the aluminum tariff on the UAE, one of the world’s biggest aluminum producers. That coincided with a deal for the United States to sell the UAE 50 F-35 jets and up to 18 armed drones.

Why Biden acted: “In my view, the available evidence indicates that imports from the UAE may still displace domestic production, and thereby threaten to impair our national security,” Biden stated in the proclamation.

Biden noted that U.S. importers can apply to the Commerce Department for a waiver from Section 232 tariffs on products not available from domestic suppliers.

“Tellingly, there have been 33 such exclusion requests for aluminum imported from the UAE, covering 587,007 metric tons of articles, and the Secretary of Commerce has denied 32 of those requests, covering 582,007 metric tons,” Biden said. “This indicates the large degree of overlap between imports from the UAE and what our domestic industry is capable of producing.”

Next step: Last week, the EU ambassador to the United States urged Biden to “immediately” lift tariffson European steel and aluminum. The EU would respond by immediately lifting its retaliatory duties on the United States, the ambassador said.

Steel companies and union workers, as well as primary aluminum producers in the U.S., have urged Biden to keep the duties in place. Biden will have to weigh those conflicting demands against his hopes of closer relations with Europe to address common challenges like China’s rise and climate change.

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