Biden, in first trade move, reimposes a Trump tariff

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Doug Palmer
·4 min read
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In one of his first trade actions, President Joe Biden on Monday night reinstated a 10 percent duty on aluminum imports from the United Arab Emirates that President Donald Trump removed just one day before leaving office.

"I consider it is necessary and appropriate in light of our national security interests to maintain, at this time, the tariff treatment applied to aluminum article imports from the United Arab Emirates," Biden said in a new proclamation.

The unexpected move suggested that Biden, a Democrat, is eager to demonstrate his toughness on trade to deny Republicans any opening to outflank him on the issue as Trump managed to do against Hillary Clinton in the 2016 election. But a White House spokesperson indicated Tuesday that foreign policy concerns also were a major factor behind Biden's move.

The bigger picture: Trump imposed a 25 percent tariff on steel and a 10 percent tariff on aluminum in 2018, using Section 232 of the 1962 Trade Expansion Act.

That provision allows the president to restrict imports to protect national security. But on Jan. 19, he signed a proclamation lifting the aluminum tariff on the UAE, one of the world's biggest aluminum producers. That coincided with a deal for the United States to sell the UAE 50 F-35 jets and up to 18 armed drones, which the Biden administration has placed under review.

The UAE also is one of the Arab states that has formally recognized Israel as a result of the Abraham Accords brokered by the Trump administration and supported by Biden. The sale of the jets and tariff removal reportedly were connected to UAE's recognition of Israel.

Biden's decision to reverse Trump's UAE tariff reprieve seemed to cast a pall over the hopes in the U.S. business sector and in Europe that Biden would roll back most, if not all, of the tariffs that Trump put on steel and aluminum imports.

But a White House spokesperson said other issues were at play since Trump's decision to lift the UAE tariffs "at the last hour was made clearly on the basis of foreign policy issues unrelated to trade."

The Biden administration is currently evaluating "all steps taken by the previous administration on trade, including the private deals and assurances that may have been made," the spokesperson continued.

The decision to remove the aluminum tariffs on the UAE should not be viewed as "pre-determinative" to other tariff decisions or "derogative to the close diplomatic relationship between the United States and UAE," the aide added.

Biden's own words: "In my view, the available evidence indicates that imports from the UAE may still displace domestic production, and thereby threaten to impair our national security," Biden stated in the proclamation.

Biden noted that U.S. importers can apply to the Commerce Department for a waiver from Section 232 tariffs on products not available from domestic suppliers.

"Tellingly, there have been 33 such exclusion requests for aluminum imported from the UAE, covering 587,007 metric tons of articles, and the Secretary of Commerce has denied 32 of those requests, covering 582,007 metric tons," Biden said. "This indicates the large degree of overlap between imports from the UAE and what our domestic industry is capable of producing."

The United Steelworkers union, which wants Trump's 232 tariffs to remain in place, cheered the decision.

“If Trump’s actions were allowed to become effective, UAE’s state-supported aluminum producers would have had the right to flood the U.S. market, resulting in new trade attacks on our industry," Steelworkers President Tom Conway said.

Next step: Last week, the EU ambassador to the United States urged Biden to "immediately" lift tariffs 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 U.S., have urged Biden to keep the duties in place. Biden will have to weigh those conflicting demands against his hopes of closer relations with Europe to address common challenges like China's rise and climate change.

On that question, the White House spokesperson offered both sides a glimmer of hope.

The review of the Trump administration's trade policy is looking at what steps need to be taken to promote U.S. production and exports, while also regulating imports, the spokesperson said. That "includes the intelligent use of tariffs as part of a strategy that ensures American workers are equipped to compete and win in the global economy."