Tariffs that Donald Trump placed on foreign steel and aluminum have been “effective,” President Joe Biden’s commerce secretary said, an indication that the Biden administration won’t soon abolish the highly contentious duties.
“The data show that those tariffs have been effective,” Gina Raimondo said in an interview with MSNBC on Thursday. “What President Biden has said is there will be a whole-of-government review of all of these policies and decide what it makes sense to maintain.”
Trump implemented a 25% duty on steel imports and 10% on inward-bound shipments of aluminum three years ago on national-security grounds, saying they were needed to protect the domestic industry from going under.
Industry groups representing the top U.S. steel producers and the United Steelworkers union in January urged Biden to preserve the steel tariffs, calling them “essential” to the viability of the domestic industry. But manufacturers have called on Biden to end the duties, saying they hurt family-owned businesses and fractured relationships with trading partners from Mexico and Canada to the European Union and Japan.
The steel industry has been very vocal in recent months that the new administration needs to work with trade allies to force countries like China to cut down on overcapacity that is depressing global prices.
The benefits of the duties remain unclear. Most end-users — from Caterpillar Inc. and Whirlpool Corp. to Harley Davidson Inc. and Molson Coors Beverage Co. — have complained that the tariffs raise their raw materials costs, cutting into profits. The major American steel companies say the duties have protected them from foreign imports that tend to push down prices. Though, right now the industry is purposely throttling production to keep domestic steel prices at record levels, which may lead end-users to buy foreign imports in order to satisfy their needs.
Alcoa Corp., the biggest U.S. aluminum producer, has opposed the tariffs since the beginning, and continues to ask the administration to remove them. Century Aluminum Co. and Magnitude 7 Metals, two smaller producers, say the duties have saved American jobs and argue that they should remain.
In the interview, Raimondo — who was sworn in yesterday — also pledged that the Biden administration will hold China to account for anti-competitive behavior and “horrific” human-rights abuses, and will use all tools at its disposal to counter the “threat” that Beijing’s behavior poses.
“They need to be held to account for that,” Raimondo said.
The U.S. will use inclusion on its so-called entity list — which prohibits a company from doing business with American firms without first obtaining a U.S. government license — “to its full effect,” she said. “There’s no one tool in our toolbox, but we have to recognize the magnitude that China’s behavior — the threat that it poses.”