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January 18, 2021

Debate About Section 232 Metals Tariffs Heats Up Before Biden Inauguration

President-elect Joe Biden has not said how he will handle the Trump administration’s tariff actions against China, but he is getting pressure from all quarters to make an announcement soon after his inauguration.

As MetalMiner reported last week, representatives from American Iron and Steel Institute (AISI), Steel Manufacturers Association (SMA), the United Steelworkers union (USW), the Committee on Pipe and Tube Imports (CPTI), and American Institute of Steel Construction (AISC) sent a joint letter to President-elect Biden asking him to keep President Donald Trump’s Section 232 tariffs in place.

The letter, available here, said, “Continuation of the [steel] tariffs and quotas is essential to ensuring the viability of the domestic steel industry in the face of this massive and growing excess steel capacity.” The letter also argued that removing or weakening the measures will invite a “new surge” in imports.

According to FastmarketsAMM (subscription required), the American Primary Aluminum Association also has written a letter to the Biden administration calling for preservation of the Section 232 tariffs while, in a statement, the Aluminum Association called for a country-specific approach. Aluminum Association President and CEO Tom Dobbins said, “Across-the-board tariffs have failed to dent the non-market-based structural subsidies that drive overcapacity and hurt US aluminum producers and workers. We look forward to working with President-elect Biden’s trade team on new, creative approaches to combat this perennial challenge, including renewed cooperation with traditional trading partners and allies.”

Other organizations have started public relations campaigns to eliminate the penalties. According to Hellenic Shipping News Worldwide, for example, the U.S. China Business Council, which represents more than 230 US companies that operate in a diverse range of industries, recently argued President-elect Biden should end the Section 232 tariffs.

Most observers do not expect the incoming Biden administration to make any decisions about these penalties for at least a few months. Michael Wessel, a longtime trade consultant, told The Washington Post last week, “I would expect trade to be on a slower track. It’s climate change and infrastructure that are the priorities.”

The Metals Service Center Institute 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, 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 NAFTA. MSCI also asked that Canada and Mexico be excluded from any trade penalties resulting from the 232 investigation on steel.

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