U.S. Trade Representative Katherine Tai generally avoided being pinned down on timing as she was asked about rekindling trade negotiations with the United Kingdom and Kenya, the pause on tariffs on European imports, and a solution for steel overcapacity that could make way for the lifting of Section 232 tariffs.
Over 300 U.S. manufacturers wrote to President Joe Biden to request an end to Section 232 tariffs on steel and aluminum, the Coalition of American Metal Manufacturers and Users said in a news release May 6. “Manufacturers in the United States currently face historic shortages of readily available and globally priced steel and aluminum products at a time when the country is relying on our sector to help drive the economy and overcome the unprecedented challenges caused by the COVID-19 pandemic,” the group said in the letter. “Without termination of the tariffs, this situation will worsen if Washington moves forward with an infrastructure bill to invest in America, as these projects will create more strain on domestic steel and aluminum supplies, causing delays in construction and risking manufacturing jobs.”
The Commerce Department has reduced its backlog of Section 232 aluminum and steel exclusion requests and is granting decisions more quickly, Commerce Secretary Gina Raimondo said May 6. She said the agency averages about 50 days to grant an exclusion from the date it receives the request.
U.S. Trade Representative Katherine Tai heard many bipartisan complaints about the pain of both Section 301 tariffs and Europe's retaliatory tariffs in response to steel tariffs, but stood her ground on both during a hearing in front of a Senate Appropriations subcommittee responsible for funding the Office of the U.S. Trade Representative.
PricewaterhouseCoopers has been cautioning its clients not to get their hopes up about a reversal of sections 232 and 301 tariffs with the new administration, and Scott McCandless, a principal in the firm's tax policy services group, also sought to manage expectations for trade policy action in Congress in 2021. McCandless, speaking to a webinar audience April 27, said that while forced labor is a hot issue right now, and CBP “is on a more active footing” on forced labor, he doesn't believe that legislation that would create a rebuttable presumption of forced labor in Xinjiang is going to pass this year. “I doubt that moves forward,” he said.
A witness at a Senate Finance Committee hearing on China and trade competitiveness told senators that if the Miscellaneous Tariff Bill and his company's Section 301 exclusion aren't granted retroactively, Element Electronics would be forced to move production out of the U.S.
The Tax Foundation, a nonpartisan think tank that advances right of center tax policy, issued a lengthy report how Congress might consider changing the tax code for faster growth, for income distribution, or for reducing the deficit, noting that each change requires balancing trade-offs. For instance, the Foundation says that getting rid of safeguard tariffs on washing machines and solar panels, the Section 232 tariffs on metals, making permanent the pause in Airbus tariffs, and removing and the Section 301 tariffs on $475 billion worth of Chinese imports will mean a reduction in $79.5 billion in revenue next year, though the economists at the think tank estimated that the savings would spur enough economic growth that about $7 billion of that loss would be recovered with other taxes.
U.S. Trade Representative Katherine Tai's conversations with her counterparts from Italy and the Netherlands addressed global overcapacity in steel, according to summaries of the video calls released April 16. The administration has suggested that Section 232 tariffs on aluminum and steel cannot be removed until overcapacity has been addressed, even when the countries subject to those tariffs are not dumping steel or aluminum in their exports to the U.S.
Although the Aluminum Association opposed the imposition of 10% tariffs on imported aluminum in 2018, now the trade group doesn't want those tariffs lifted entirely. The tariffs have already been removed on Canada, the No. 1 source of imported aluminum. “We were not in favor of the drastic move of putting [Section] 232 in” and “we would not be in favor of the drastic move of removing 232 in one fell swoop,” Aluminum Association CEO Tom Dobbins said.
European professors speaking about the future of the trans-Atlantic trade relationship said that while it's logical for democratic, rule-of-law countries to coordinate trade policy against an authoritarian rival, that's easier said than done.