The US Trade Representative issued a strong rebuke of the World Trade Organization’s decision that former President Donald Trump’s 25% tariffs on steel imports and 10% duty on aluminum violates international rules. It’s the strongest statement yet from the White House that Biden has no intention to remove the duties, which would potentially alienate one of his most important bases of support: steelworkers.
“The Biden Administration is committed to preserving U.S. national security by ensuring the long-term viability of our steel and aluminum industries, and we do not intend to remove the Section 232 duties as a result of these disputes”, Adam Hodge, a spokesman for the US Trade Representative, said in a statement.
There was much discussion in the leadup to the 2020 election and the early days
of Biden’s presidency whether he would roll back the tariffs, which
manufacturers from Caterpillar Inc. to Whirlpool Corp. to Harley Davidson
Inc. had long complained were hurting US companies. The president instead chose
to make some soft concessions to key allies, such as the European Union, while
keeping the Section 232 tariffs, which the US sees as vital for national
security, in place for most others.
Two industry insiders
familiar with the matter said the USTR’s stance on the ruling gives them
certainty the president won’t roll back the Section 232 tariffs. The metals
industry already was taking a victory lap with US Steel Corp. commending Biden
for defending the industry and the United Steelworkers calling the WTO’s decision “just plain wrong.”
The US rebuke still leaves the door open for the president to tinker with the
duties but not in a way that will fundamentally change the landscape. The
administration’s defense of the tariffs comes as it studies ways to use
similar, untested measures to isolate China and boost its climate credibility.
“Legally, they’re correct. The WTO cannot declare that a US law is invalid. All
they can do is impose sanctions for not changing it,” said Lewis Leibowitz, a trade lawyer who has
long represented companies that opposed the tariffs. “But I think they were a
mistake and they’re creating disincentives for manufacturing and eventually
it’s going to hurt the sector.”