Steel Traders, Consumers Ask Biden to Shred 'Most' Section 232 Tariffs

AMSCI represents not only steel traders, stevedoring companies and warehouses, but also barge and shipping firms, trucking companies, and metals processors and fabricators.

The group wants to make sure that Biden’s “build back better” economic recovery plan includes not only steel mills and aluminum smelters but “our entire metals supply chain,” Foster said.

“It was clear from the outset these tariffs were protecting the few at the expense of the many, while inordinately raising costs to many of our country’s manufacturers–making them less competitive globally,” he said.

Section 232 tariffs–25% in the case of steel and 10% in the case of aluminum–were rolled out by the Trump administration in March 2018. The trade action by that summer had sent U.S. steel prices to their highest point since 2008.

And steel consumers faced not only high steel costs because of the trade action. “Such punitive and scattershot tariffs create more economic animus, confusion, and costly bureaucratic micromanagement of the economy than benefit,” he said.

Evidence of that: Members of Congress have sent hundreds of letters to the Office of the U.S. Trade Representative, the chief U.S. trade negotiator, seeking exemptions from Section 232 for local businesses in their regions, Foster said.

Section 232 tariffs came on top of existing anti-dumping and countervailing duties, which steel has benefitted from for decades. They have also resulted in “tit for tat” retaliation against U.S. agricultural products and in general made international relations “more difficult,” he said.

“With the entire spectrum of the U.S. economy working together, we can achieve the Biden administration’s goal of ‘building back better,’ which we hope means an economy that is better for our entire metals supply chain and not just very select components,” Foster said.

President Biden has scrapped an executive order from former President Trump that would have lifted Section 232 tariffs on aluminum imported from the UAE. It’s not clear what signal that sends, if any, for the broader tariff regime.

AMSCI would like to see the administration get congressional support for removing Section 232, Foster told Steel Market Update.

He noted that the unilateral action taken by Trump formed the basis for a legal challenge–one that went all the way to the Supreme Court but was ultimately unsuccessful–mounted by AIIS against Section 232. The case hinged on the idea that Congress is responsible for taxes and tariffs, and that the executive branch had therefore overstepped its bounds by imposing Section 232 without legislative approval. 

“We all know the national security story was bogus.… Such over-reaching and domestically/economically hurtful trade policy needs to be corrected,” Foster said.

By Michael Cowden, Michael@SteelMarketUpdate.com