Section 232 in Spotlight, But Relief Not Imminent: AMSCI

“That (decision) tells us that we’re not going to get any relief from the courts,” he said.

The CIT order and an executive action taken by President Biden to keep Section 232 tariffs in place versus the United Arab Emirates–Trump had attempted to lift the trade action from the UAE in one of his last actions in office–has put the controversial measure “more to the forefront” of policy discussions now than it might otherwise have been, Foster said.

“The big elephant in the room is getting these tariffs reduced. I’ve said it 100 times. They are benefitting the few at the expense of the many,” he said.

Still, it’s unlikely that Section 232 will be substantially altered in the short-term. “The EU is chasing it really hard,” Foster said. “But it’s going to take some time. I would say middle of the year, end of the year, we are going to see some relief.”

Biden is keen to leave the nationalism and “America First” policies of the Trump administration behind. But he also wants to do so in a more reasoned and targeted way than the “scattershot approach” characteristic of Trump’s presidency, he said.

The most likely candidates for seeing tariffs removed are the United States’ traditional allies and trading partners–think the European Union, the United Kingdom, and Japan, for example.

Mexico and Canada were exempted from Section 232 after the U.S.-Mexico-Canada Agreement was signed.

“As he does this and he ramps it down, those are going to be the first places he gives relief to,” Foster said.

Duties should remain in place against China and other countries that have exploited global trade rules, he said.

Foster also criticized the prior administration for prioritizing U.S. steel producers–and only those with melting capability–at the expense of re-rollers and downstream steel consumers.

The policies reflected the influence of domestic steel lobbying groups as well as officials in Trump’s orbit. Count among them Dan DiMicco, a senior trade advisor to Trump and former chairman and CEO of Nucor, North America’s largest steelmaker, Foster said.

Also with influence in the Oval Office was former Commerce Secretary Wilbur Ross, who built International Steel Group by buying integrated mills such as Bethlehem Steel out of bankruptcy–before selling them to Indian billionaire Lakshmi Mittal as he built what is now ArcelorMittal, the world’s largest steelmaker, he noted.

Such figures might have been successful at pushing Trump’s “America First” agenda. But those policies left out a lot of Americans along the way. “The stevedores, the truckers, barge owners, ports, warehouses–they are Americans too. Americans are not just steelworkers or aluminum workers,” Foster said.

One could make the case that Section 232 was aimed at protecting integrated steelmakers. But it also protected electric-arc furnace producers (EAFs) that were consistently profitable before the tariffs were put in place, he said.

Those mills did the right thing in investing in new, more efficient new capacity. Nucor, Steel Dynamics Inc. (SDI) and Big River Steel (now a part of U.S. Steel) have all expanded while proving their ability to compete globally. And there is little reason to continue to protect them with tariffs, Foster said.

“They (mills) have had protection for decades. And it’s time for them to start standing on their own,” he said.

As for the AMSCI, it is expanding its membership beyond the steel traders and logistics members that have typically made up its ranks to also include distributors, service centers, and consumers. Expanding into aluminum also made sense given that the challenges facing aluminum traders, distributors and consumers are similar to those faced by companies on the steel side, Foster said.

The expanded audience is partly an act of necessity. AIIS membership in its early years was approximately 70% steel traders. But mergers, acquisitions and companies going out of business have cut that number roughly in half. “There is not that much less in relative terms of metal or steel being imported because of the tariffs. It’s just being done by fewer and fewer people,” he said.

And the message AMSCI promotes–“free and responsible trade”–is the same as that of the AIIS. The main difference: the group is trying to use that message to represent groups in the steel and metals supply chain that have historically “not really had a voice to speak for them” in D.C. on trade issues. “And this is for importing and exporting. Free and responsible trade, that goes both ways,” Foster noted.

By Michael Cowden, Michael@SteelMarketUpdate.com