The bigger picture: The move raises hopes in the U.S. and European business sectors that Biden would reduce Trump’s tariffs on steel and aluminum imports under Article 232 of the 1962 Trade Expansion Act. The provision allows the president to restrict imports to protect national security.
In 2018, Trump introduced a 25 percent tariff on steel and a 10 percent tariff on aluminum. But on January 19, he signed a proclamation lifting the aluminum tariff on the UAE, one of the world’s largest aluminum producers. This coincided with an agreement for the United States to sell the UAE 50 F-35 jets and up to 18 armed drones.
Why Biden acted: “In my view, the available evidence indicates that imports from the UAE may continue to displace domestic production, thus threatening our national security,” Biden stated in the proclamation.
Biden noted that U.S. importers can apply to the Department of Commerce for a waiver of Article 232 tariffs on products not available from local suppliers.
“There have been, say, 33 such exclusion requests for aluminum imported from the UAE, covering 587 007 tonnes of articles, and the Minister of Trade has refused 32 of the requests, covering 582 007 tonnes,” Biden said. “This indicates the large degree of overlap between imports from the UAE and what our local industry is capable of delivering.”
Next step: Last week, the EU ambassador to the United States urged Biden to lift tariffs “immediately” on European steel and aluminum. The EU would respond by immediately lifting its retaliatory duties on the United States, the ambassador said.
Steel companies and union workers, as well as primary aluminum producers in the US, urged Biden to keep the duties in place. Biden will have to weigh the conflicting demands against his hopes of closer ties with Europe to meet common challenges such as China’s rise and climate change.