The Coalition of American Metal Manufacturers and Users, which includes a number of machining trade groups, a construction trade group and others, wrote a letter to President Joe Biden Feb. 10 to ask him to lift Section 232 tariffs on steel and aluminum. “The Trump steel tariffs have hurt small, family-owned manufacturers and the communities in which they built their businesses, while fracturing relations with overseas trading partners and spurring a frenzy of retaliatory trade measures -- with little to nothing to show for it at home,” the letter said. The coalition represents more than 30,000 companies in manufacturing and downstream supply chains. “More than 6.2 million Americans work in industries that use steel, while the steel industry itself directly employs only 140,000 workers,” it said, referring to tallies before the COVID-19 pandemic. “The data on employment in steel and aluminum production shows a muted benefit of approximately 1,000 more jobs. By comparison, a study by the Federal Reserve Board of Governors indicated that increased input costs due to the tariffs are associated with 75,000 fewer jobs in the U.S. manufacturing sector.”
Section 232 Tariffs
The United States currently maintains a 25% tariff on steel imports and 10% on tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962. In 2018, the Trump administration imposed Section 232 Tariffs on steel and aluminum imports into the United States, citing national security concerns. The U.S. agreed to lift tariffs on Canada and Mexico after the signing of the United States-Mexico-Canada Agreement (USMCA), and reached deals with the European Union, Japan and other countries to replace the tariffs with quotas for steel and aluminum imports into the U.S.
President Donald Trump didn't get China to agree to much in the way of structural changes, panelists said, but Asia Society Policy Institute Vice President Wendy Cutler said he put China front and center on the agenda, which was good. “He was really willing to take on the business community when it came to China,” she said. Cutler, who worked at the Office of the U.S. Trade Representative for more than 25 years, said that when she was at USTR, one of her frustrations in trying to negotiate with China was that U.S. “companies were pretty conflicted. They liked the … money they were making. They wanted us to be quote, unquote tough with China, but they didn’t want to be part of the get-tough strategy. Our hands were tied in a way.”
Ambassadors from the United Kingdom, Brazil, the European Union and Australia discussed on a Feb. 8 panel how to improve trading relationships with the U.S. and deal with the challenge China poses to the international trading system but had no insights into how to make breakthroughs on either.
The panels tasked with deciding whether Section 232 tariffs on steel and aluminum imports truly meet the national security exemption at the World Trade Organization notified WTO ambassadors that those decisions will be released no sooner than “the second half of 2021” because of delays caused by the global COVID-19 pandemic. Multiple panels are considering the tariffs against various countries and the European Union. Although the panels were assigned the cases a year ago, with decisions to be made in six months or less, all the panels told Geneva officials Feb. 8 that their decisions will be released in July at the earliest.
Two Senate Finance Committee members pressed commerce secretary nominee Gina Raimondo to study the cost of Section 232 tariffs on downstream companies, but she did not agree to do so in her written replies to their questions. “If confirmed as Secretary, I plan to review any work the Department of Commerce has already done on the impact of the tariffs and will ensure that any review is up to date,” she replied.
The following lawsuits were filed at the Court of International Trade during the week of Jan. 25-31:
The European Union wants to work with America on ways to develop Artificial Intelligence standards, design a carbon adjustment border mechanism and stockpile medicines and personal protective gear in a way that lessens dependency on certain Asian countries, its ambassador to the U.S. said on a webinar hosted by the European American Chamber of Commerce
At her confirmation hearing in the Senate, Rhode Island Gov. Gina Raimondo, President Joe Biden's nominee for commerce secretary, was asked about rolling back Section 232 tariffs on steel and aluminum, and ending Section 201 tariffs on solar panels, which will increase to 18% on Feb. 7 if no action is taken (see 2010130028) and if a court doesn't stop it (see 2012300045).
European Union Director General for Trade Sabine Weyand told an audience Jan. 15 that resolving punitive tariffs are “a prerequisite for creating a good atmosphere” so that the EU and the U.S. can coordinate on confronting China's trade abuses and creating a carbon border adjustment.
Metal importers and a senior Republican staffer in the House of Representatives agreed that the Commerce Department's revisions to its Section 232 exclusions process are somewhat of an improvement, but they diverge in their opinions of how helpful the changes will be for the industry. The revisions were announced in an interim final rule published Dec. 14 (see 2012100047); some elements have already taken effect, and others take effect Dec. 29. However, the agency is still accepting comments on the revisions through Feb. 12, 2021.