U.S. Steelmakers, Industry Users Tussle Over Future of Tariffs

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Steel producers are sparring with industries that use the metal as both lobby the Biden administration over the future of Trump-era tariffs on billions of dollars in annual imports.

A broad group of U.S. business associations, composed of 37 groups ranging from the American Petroleum Institute to the U.S. Fashion Industry Association, asked President Joe Biden on Wednesday to remove the duties that his predecessor justified on national-security grounds “as soon as possible.” Former President Donald Trump slapped the duties on trade partners from the European Union and Japan to Mexico and Canada in 2018.

Overall, the tariffs have hurt far more jobs and companies in industries that use steel -- as well as small businesses and consumers -- than they’ve protected in steel and aluminum production, the associations said.

At the same time, the Economic Policy Institute, a left-leaning think tank, called on the administration to continue the duties. It hosted a call with representatives of United Steelworkers union and said that the duties helped boost output and create thousands of jobs. The industry is concentrated in politically sensitive swing states including Michigan, Ohio and Indiana.

The competing campaigns point to the pressure that the Biden administration will come under as it reviews tariffs on billions of dollars of imports inherited from Trump.

Commerce Secretary Gina Raimondo said earlier this month that data show the tariffs have “been effective” and left open the possibility that they would be maintained after the Biden administration completes a review process.

The duties “are causing serious damage to those already struggling” due to the pandemic, Rufus Yerxa, president of the National Foreign Trade Council, a business-lobbying group advocating for removal of the duties, said in a statement. “Eliminating unwarranted, ineffective and self-defeating import tariffs is key if we want to re-engage with our allies and build our economy back better.”

Trump implemented a 25% duty on steel imports and 10% on inward-bound shipments of aluminum three years ago using section 232 of the 1962 Trade Expansion Act allows, which allows for the levies without a vote by Congress if imports are deemed a national-security threat. The former president said the tariffs were needed to protect the domestic industry from going under.

The benefits of the duties remain unclear. Most end-users -- from Caterpillar Inc. and Whirlpool Corp. to Harley Davidson Inc. and Molson Coors Beverage Co.-- have complained that the tariffs raise their raw-materials costs, cutting into profits.

The major American steel companies say the duties have protected them from foreign imports that tend to push down prices. Though, right now the industry is purposely throttling production to keep domestic steel prices at record levels, which may lead end users to buy foreign imports in order to satisfy their needs.

A bipartisan group of senators earlier this month introduced a bill to revamp the 1962 trade law by allowing Congress to annul a president’s actions with a joint resolution of disapproval.

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