Manufacturers complain of steel shortages and soaring prices, but there is still no consensus on path forward
LEESPORT, Pa. — Charles Bernard is paying hundreds of thousands of dollars each year in tariffs on imported steel. But as the Biden administration weighs the fate of the three-year-old import taxes imposed by President Donald Trump, Bernard, the president of Eagle Metals, is in no hurry to see them removed.
Eliminating the tariffs would help his bottom line while exposing the U.S. steel industry to savage competition from cheap foreign metal. State-backed mills in China are flooding the global market with so much subsidized steel that American producers say they cannot compete without government protection.
“It’s not great for us. The tariffs were a blunt instrument,” said Bernard, 64, one of their customers. “But we need a domestic steel industry.”
The Biden administration is embracing that bargain, accepting market distortions as the price of defending U.S. steel manufacturers against subsidized foreign rivals — even as some executives warn of risks to the president’s planned infrastructure overhaul.
Bernard’s stance illustrates how one of Trump’s most controversial trade initiatives, which angered U.S. allies and drew scorn from many economists, has become a plank in Biden’s “worker-centered” trade policy. The tale of the Section 232 tariffs, named for the part of a 1962 law that authorized them, also shows how temporary trade barriers can harden into semi-permanence.
Economic and political imperatives are cementing the metals tariffs. Chinese steelmakers are building plants in countries such as Vietnam, Indonesia and Malaysia, meaning the global steel glut will intensify. And the Biden administration is determined to retain support from the United Steelworkers, a force in key states in the industrial Midwest.
“The 232 isn’t going anywhere,” said Samir Kapadia, a lobbyist with the Vogel Group.
Rather than scrapping the tariffs, as critics including the U.S. Chamber of Commerce have demanded, the administration could use them as a model for new trade barriers to fight climate change, analysts said. Section 232 gives the president sweeping powers to use tariffs to combat whatever he deems a national security threat.
“They like the power they have and the potential to use the law for their goals. In this case, climate is the big one,” said Scott Lincicome, a trade attorney and senior fellow at the Cato Institute.
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