February 1, 2021

Biden Administration Under Increased Pressure On Section 232 Tariffs

While officials from the European Union said they would lift tariffs on some U.S. products if the Biden administration lifts Section 232 tariffs on steel and aluminum, in her confirmation hearing, Gina Raimondo, President Joe Biden’s nominee to lead the U.S. Department of Commerce, made no promises. Raimondo, who currently is governor of Rhode Island, spoke about the penalties in relation to China specifically. She argued, “China has clearly behaved in ways that are anticompetitive … They’ve been dumping cheap steel into America and that hurts our ability to compete.” Gov. Raimondo pledged to “be very aggressive against that,” while “listen[ing] to stakeholders” and “tak[ing] their needs into account.”

When asked whether or not the Biden administration would keep the tariffs in place, according to The Associated Press, Raimondo “demurred,” simply saying that she would work with stakeholders. Gov. Raimondo also mentioned the exclusion process for the Section 232 tariffs and said, “I will assure that that process is fair, swift and helps to balance the competing interests.”

The Coalition for a Prosperous America has more information on the hearing.

Meanwhile, in a column published in IndustryWeek last week, trade lawyer Cortney Morgan said she expected the Biden administration to slowly phase out the steel and aluminum penalties. Morgan wrote, “Section 232 tariffs may be easier to change in order to deescalate the tensions between the United States and the rest of the world. If the Biden Administration pursues a multilateral approach and seeks cooperation with traditional allies of the United States, as expected, then an easing of such tariffs may be in the works.”

Regarding the European Union’s (EU) decisions, in a statement last week, Stavros Lambrinidis, the EU’s ambassador to the United States, urged the Biden administration to lift Section 232 tariffs in order to find a resolution to the U.S.-EU aircraft subsidy dispute. As legal experts at the law firm of Crowell & Moring, LLP wrote last week, that statement is only the most recent “in a chorus of comments calling for increased transatlantic cooperation.”

As a reminder, MSCI consistently has argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, in 2017 MSCI advised federal officials to provide relief for producers up and down the supply chain and to consider consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including the United States Mexico Canada Agreement (USMCA). MSCI also asked that Canada and Mexico be excluded from any trade penalties.

Click here to review all of MSCI’s advocacy on Section 232 tariffs.