The Congressional Steel Caucus–in a bi-partisan show of unity–has asked President Joe Biden to keep Section 232 tariffs and quotas in place.
The request comes as the Biden administration has acknowledged that a review of trade policies enacted by former President Donald Trump is ongoing.
“The review is underway of the previous administration’s trade policy to determine what steps need to be taken. So that includes, you know, decisions on tariffs,” White House Press Secretary Jen Psaki said during a press briefing.
What the Steel Caucus Wants
Section 232 has led to a significant reduction in steel imports and allowed for US mills to invest in new plants, Steel Caucus leaders said in a letter addressed to the president.
But the protections remain necessary so that the steel industry “can continue its road to recovery,” they said.
“We remain concerned that the industry remains at risk due to the lingering effects of the pandemic. We know that as the U.S. economy begins to recover that it will be an attractive market for foreign producers to pursue,” they wrote.
The letter was signed by Steel Caucus Co-Chairmen Rep. Conor Lamb (D-Pa.) and Frank Mrvan (D-Ind.) as well as Co-Vice Chairmen Rep. Mike Bost (R-Ill.) and Rep Rick Crawford (R-Ark.)
“As the Biden-Harris administration reviews the existing tariffs and quotas in place on certain steel products, we strongly encourage the continuation of a comprehensive program,” the Steel Caucus leaders wrote.
The American Iron and Steel Institute (AISI), one of two key lobbying groups for the U.S. steel industry, applauded the letter.
“We appreciate the members of the Steel Caucus recognized that the new investments the steel industry is making, and our global leadership in the production of sustainable steel products, will be at risk if the existing tariffs and quotas do not remain in place,” AISI President and CEO Kevin Dempsey said.
The litany of investments is a long one: Big River Steel, now owned by U.S. Steel, has doubled capacity at its flat-rolled electric-arc furnace (EAF) mill in Osceola, Ark., to 3.3 million tons per year. Steel Dynamics Inc. (SDI) is building a new, $1.9 billion flat-rolled EAF mill in Sinton, Texas, expected to have annual capacity of 3 million tons per year and slated to start up this summer. Nucor and North Star BlueScope, meanwhile, are undertaking big expansions at their flat-rolled EAF mills in Ghent, Ky., and Delta, Ohio.
What the Chamber of Commerce Wants
But some steel consumers don’t think those additions are coming fast enough and have grown frustrated with long lead times and high prices at domestic mills. They would like to see Section 232 eased so that steel might be more readily sourced at competitive prices.
Steel Market Update’s average hot-rolled coil price stands at $1,150 per ton ($57.50/cwt), an all-time high.
And the U.S. Chamber of Commerce, an influential lobbying group for American businesses, would like to see the Biden administration end the tariffs.
“Doing so would not only ease the burden of tariffs and counter-tariffs borne by U.S. manufacturers and farmers, it would spur economic growth at a time when it’s badly needed. It would also enhance the administration’s ability to work cooperatively with allies to address shared concerns globally,” the group wrote in an issue brief.
The UAE–Noise, Not Sound
The Biden administration has to date not shown its cards on Section 232.
Biden scrapped plans by former President Donald Trump to remove Section 232 tariffs from the United Arab Emirates (UAE). But it’s not clear whether that decision was indicative of how Biden will approach the tariff issue more broadly.
Biden’s press secretary Jen Psaki indicated that the UAE decision was separate from the broader review. “The previous administration’s decision to lift the existing tariff on the UAE … at the last hour was made clearly, in our view, on the basis of foreign policy issues unrelated to trade,” she said.
By Michael Cowden, Michael@SteelMarketUpdate.com
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