Three years back, the Trump administration slapped a 10 percent tariff on aluminum imports and a 25 percent tariff on steel imports because these were necessary to protect the industries in America. In an interview with MSNBC, the Biden administration’s commerce secretary, Gina Raimondo, admitted that Trump’s decision was correct.
“The data show that those tariffs have been effective… What President Biden has said is there will be a whole-of-government review of all of these policies and [then we will] decide what it makes sense to maintain,” she said in the interview. Raimondo also suggested that the Biden administration would take a tough approach to China and make Beijing accountable for their horrific human rights abuses and anti-competitive business practices.
Raimondo’s statements come when Washington is being pressured by opposing groups to relax or continue with the tariffs. In January, multiple industry groups from U.S. steel producers and workers unions asked the president to maintain tariffs on steel imports, arguing that they are necessary to ensure the survival of domestic steel manufacturing. However, other manufacturers have called on Biden to do the opposite.
In February, the ‘Coalition of American Metal Manufacturers and Users’ sent a letter to the president, saying that the Trump-era tariffs were hurting family-owned businesses and posed a risk of shutting down production lines and laying off workers.
They say that manufacturers cannot procure the necessary raw material of satisfactory quality from American suppliers and that Biden should end tariffs on aluminum and steel. The coalition, which represents almost 30,000 companies and over a million workers, also asked the president to address excess aluminum and steel capacity in China.
Meanwhile, the Commerce Department has set anti-dumping duties on importing common alloy aluminum sheets from 18 countries. Germany, the biggest exporter of aluminum sheets to the United States, has been slapped with the highest duties, ranging from 49.4 percent to 242.8 percent. Bahrain was hit with an anti-dumping rate of 4.83 percent. In 2019, Germany and Bahrain had exported aluminum sheets worth $286.6 million and $241.2 million, respectively.
Wood Mackenzie’s principal analyst Uday Patel believes that imports will continue despite higher duties. “There has been a revival in investment in U.S. domestic production of common alloy sheet. The key question…is whether the domestic increase in common alloy production is sufficient to offset potentially lower imports…”
“Aluminum demand is expanding rapidly in the United States at the moment and we expect the stimulus to further push demand growth for common alloy sheet over the next two years,” he told Reuters.
Relaxing UK, EU tariffs
While Washington has boosted import duties on steel and aluminum, it has temporarily removed duties on several imports from Europe and the UK. For instance, the U.S. has suspended import duties on single malt Scotch whisky for four months. For an industry that lost around $1.5 billion in sales last year due to the combined effects of the pandemic and U.S. tariffs, the latest decision comes as a blessing.
Similarly, the U.S. has suspended tariffs on $7.5 billion of EU imports for a 4-month period, while the European Union has suspended duties on $4 billion in American imports. These duties were imposed due to a dispute between the two powers over subsidies to Boeing and Airbus.
The suspension of duties followed a phone conversation between European Commission President Ursula von der Leyen and President Biden, who promised to revitalize the partnership between the two regions.