The bigger picture: The move casts a cloud over hopes in the business sector in the U.S. and Europe that Biden would reverse the tariffs Trump imposed on steel and aluminum imports using Section 232 of the 1962 Trade Expansion Act. This provision allows the president restricts imports to protect national security.
Trump imposed a 25 percent tariff on steel and a 10 percent tariff on aluminum in 2018. But on January 19, he signed a proclamation suspending the aluminum tariff in the United Arab Emirates, one of the largest aluminum producers of the world. This coincided with an agreement for the United States to sell the United Arab Emirates 50 F-35 jets and up to 18 armed drones.
Why Biden acted: “In my opinion, the available evidence indicates that imports from the United Arab Emirates can still displace domestic production and therefore threaten to damage our national security,” said Biden in the proclamation.
Biden noted that US importers may apply to the Commerce Department for an exemption from Section 232 tariffs on products not available from domestic suppliers.
“Notably, there have been 33 requests for exclusion of aluminum imported from the United Arab Emirates, covering 587,007 metric tons of articles, and the Secretary of Commerce has denied 32 of these requests, covering 582,007 metric tons,” said Biden. “This indicates the great degree of overlap between imports from the United Arab Emirates and what our domestic industry is capable of producing.”
Next step: Last week, the EU ambassador to the United States urged Biden to “raise” tariffs “immediately” European steel and aluminum. The EU would respond by immediately lifting its retaliation obligations against the United States, the ambassador said.
Steel companies and union workers, as well as primary aluminum producers in the United States, have asked Biden to keep the tariffs in place. Biden will have to weigh these conflicting demands with his hopes of closer relations with Europe to face common challenges such as the rise of China and climate change.