Raimondo mistaken about success of Section 232, metal manufacturers group says
The Coalition of American Metal Manufacturers and Users (Cammu) claims that United States Commerce Secretary Gina Raimondo was mistaken about the success of the Section 232 steel and aluminium tariffs, and reiterated its call for their termination.
While the tariffs might be welcomed by steelmakers, they are detrimental to US manufacturers and the wider economy, Paul Nathanson, the coalition’s executive director, said in a letter to the recently confirmed Commerce secretary dated Monday March 15, expressing surprise that Raimondo described the tariffs as effective in a televised interview on March 4.
“The [President Joe] Biden administration said they were going to be pro-manufacturing,” Nathanson told Fastmarkets. “If he is going to be pro-manufacturing, the Section 232 tariffs are a problem.”
The group, which represents more than 30,000 US manufacturers, contends that Section 232 has been a failure because it hasn’t bolstered domestic steel capacity. At the same time, the tariffs have raised prices for domestic manufacturers, which will result in lost business and fewer American jobs.
These arguments were also made in a February 10 letter to Biden that called for the abolition of the tariffs.
Section 232 has bolstered domestic steel and aluminium prices, putting American manufacturers at a disadvantage verses their foreign competitors because US industry grapples with “an artificial tax on their inputs,” Nathanson said.
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $65.24 per hundredweight ($1,304.80 per short ton) on March 18, up by 0.69% from $64.79 per cwt on Wednesday and the highest level since 1960.
Fastmarkets assessed the aluminium P1020A premium, ddp Midwest US at 19-20 cents per lb on March 16, up by 8.33% from 17.50-18.50 cents per lb on Friday March 12 and the highest level since late-February 2019.
The American Institute for International Steel (AIIS) made similar arguments in a February 1 letter to Biden.
The US Supreme Court refused to hear the group’s legal challenge to Section 232 for a second time on June 22, 2020, putting an end to AIIS’ two-year legal battle.
“The Biden administration now owns this dubious, harmful tax policy and product exclusion process,” John Foster, the institute’s executive director, told Fastmarkets. “Since taking office, the new administration has moved swiftly in a number of areas to undo the initiatives of its predecessor. The Section 232 tariffs on steel and aluminum are not among them.”
The former administration implemented Section 232 tariffs in 2018, imposing import duties of 25% for steel and 10% for aluminium. There have been no signs yet that the Biden administration plans to lift the tariffs.
“The prior administration’s 232 tariffs broke or seriously harmed a lot of once-profitable steel-related businesses... The economic shocks reverberated throughout the steel supply chain, jeopardizing or ending the livelihoods of many men and women who work there,” Foster said.
“Unfortunately, the Commerce Department’s exclusion process cannot solve the economic harm to US steel- and aluminium-using manufacturers caused by the Section 232” tariffs and quotas, Nathanson said.
The process is too slow, opaque and expensive, according to Cammu.
In her confirmation hearing, Raimondo addressed manufacturers’ complaints about the Section 232 exclusions process.
“For consuming industries, I commit to you to ensure that the exclusions process is swift, fair, objective and helps to balance the competing interests,” she said in January.
“Because it now owns the Section 232 tariffs and the exclusion process, at a minimum the Biden administration ought to promptly clarify two points: What are we trying to achieve by keeping them in place? And how long will the tariffs and the exclusion bureaucracy remain in effect?” Foster said.
This feeling isn’t shared by groups representing the domestic steel industry -, such as the American Iron and Steel Institute and the Steel Manufacturers Association, which disagree with metal consumers and point to what they see as the success of the tariffs. They argue that the US industry has been strengthened and can supply all domestic needs.