Trade Cases
USTR Tai Suggests New Trade Tools are Needed
Written by Sandy Williams
May 14, 2021
Will the Section 232 tariffs be modified in some way in the near future? That is what U.S. Trade Representative Katherine Tai appeared to suggest during testimony before the Senate Finance Committee on Wednesday.
Tai told the committee that the Biden administration seeks a better tool for addressing trade than the 1962 Trade Expansion Act. The act includes the Section 232 national security measures that the Trump administration used to impose tariffs on steel and aluminum imports.
“What I would propose is that we need 2021 tools for addressing the 2021 challenges we have, rather than relying on 1962 tools and retrofitting them for the challenges we have now,” Tai said.
Although the steel industry still strongly supports maintaining the status quo on Section 232, the Biden administration has received increasing pressure from manufacturers to terminate the tariffs, which they say are increasing costs and making it harder to compete with foreign rivals.
Tai said that the former administration “did the best they could, given the tools that we have existing on the books.”
“Part of the tensions that have risen over this important trade remedy is the discordance between the authority provided and the nature of the problem we’re dealing with,” Tai said. “The steel and aluminum tariffs that have really roiled our economy were necessary to address a global overcapacity problem, driven largely but not solely by China.”
Tai did not offer any suggestion on how to replace the Trade Act or Section 232, but said she was “open to improving and perfecting the tools we have to make them more effective.” She emphasized, however, that the USTR will continue to use them in the near term to continue to protect the steel and aluminum industries.
“Clearly we have a commitment to being a strong country that is able to produce steel for itself,” Tai said.
The EU is set to double retaliatory tariffs to 50% in June in response to Section 232 and the Boeing-Airbus dispute. Tai said the administration is working with the EU and United Kingdom to resolve the disputes and address overcapacity in the steel and aluminum sectors.
In her opening remarks to the Senate, Tai was optimistic about revising U.S. trade policy. “We are turning the page on erratic trade policies. USTR’s goal is to pursue smarter policies that expand global market opportunities while enforcing global trade standards and ensuring that trading partners live up to their commitments.”
By Sandy Williams, Sandy@SteelMarketUpdate.com
Sandy Williams
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