Biden Reinstates Aluminum Tariffs in One of His First Trade Moves
President Biden reinstated tariffs on aluminum exported from the United Arab Emirates on Monday evening, reversing President Donald J. Trump’s decision to lift them on his last day in office.
The decision is one of Mr. Biden’s first significant moves on trade and suggests that his administration may be inclined to maintain the type of hefty tariffs Mr. Trump imposed on foreign metals to protect domestic industry. That position found favor with unions, but disappointed industries and businesses that have argued the tariffs raise costs.
Mr. Biden and his deputies have so far declined to say whether they would keep or remove the spate of tariffs Mr. Trump imposed on a range of products, from steel and aluminum to Chinese imports. Instead, his top officials have said that the administration plans to carry out a comprehensive review of the tariffs’ economic effects before making any decisions.
The tariffs on foreign aluminum are designed to protect American producers, which have struggled to compete with low-priced foreign products and been forced to shut down many domestic smelters.
In March 2018, Mr. Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from a variety of countries, including the United Arab Emirates, saying their metal exports had put American aluminum producers out of business and therefore threatened national security. He subsequently exempted aluminum from Argentina, Australia, Canada and Mexico and, just hours before his term ended, lifted the aluminum tariffs on the UAE.
Mr. Trump’s decision appeared to be motivated more by political than economic considerations. The decision to lift tariffs on the United Arab Emirates was led by White House officials, including Mr. Trump’s son-in-law, Jared Kushner, who had just carried out extensive negotiations to normalize relations between Israel and the United Arab Emirates. It was made without the support of many specialists in the Commerce Department and the United States Trade Representative, according to a person familiar with the deliberations.
Before coming into office, Mr. Trump also pursued various real estate projects in the United Arab Emirates, including hotels and golf courses. The Trump International Golf Club in the city of Dubai opened for business in early 2017, soon after Mr. Trump became president.
Jen Psaki, the White House press secretary, said in a briefing on Tuesday that Mr. Trump’s decision to lift the tariffs on the U.A.E. “at the last hour was made clearly, in our view, on the basis of foreign policy issues unrelated to trade.” She said the Biden administration was still reviewing other tariffs to determine what steps need to be taken.
In lifting the tariffs, Mr. Trump said the United States and the U.A.E., a major exporter of aluminum, had an important security relationship, and had carried out talks to find another way to address the threat to American national security. The Trump administration replaced the tariffs on aluminum with a quota, which would limit export surges from the country.
How Do We Regain Trust in Institutions?
‘S.N.L.’ Takes on Marjorie Taylor Greene and GameStop
The Dark Reality Behind Saudi Arabia’s Utopian Dreams
Continue reading the main story
But in a proclamation issued late Monday evening, Mr. Biden said the concerns that had fueled the tariffs in the first place still existed. “In my view, the available evidence indicates that imports from the U.A.E. may still displace domestic production, and thereby threaten to impair our national security,” Mr. Biden said.
Tom Conway, the president of the United Steelworkers International union, applauded the move, saying that Mr. Trump’s actions had constituted “a blatant attack on American workers.”
“Trump’s plan to lift tariffs on imports from the United Arab Emirates would undermine the effectiveness of the program and essentially exempt the vast majority of aluminum imports,” Mr. Conway said.
The United Arab Emirates is one of the world’s largest aluminum exporters, the result of an abundant petroleum supply that keeps the cost of the energy-intensive aluminum production process low. Between January and November of last year, it exported more aluminum to the United States than any other country except Canada.
American aluminum producers have struggled to compete with a surge in production from state-funded factories in countries like China, Russia and the United Arab Emirates, as well as growing aluminum production in countries with a lower cost of energy, like Canada. Because of various trade curbs, the United States imports a limited amount of aluminum directly from China, but China’s massive production still pushes down metal prices worldwide, making it harder for American businesses to compete.
The United States went from being the world’s top producer of aluminum two decades ago to to being surpassed by China, Russia, the U.A.E., Canada and other countries. It produced 741,000 metric tons of primary aluminum in 2017, the lowest level since 1951 and just 1.2 percent of the global supply.
But the tariffs have sparked an outcry from downstream American industries that use steel and aluminum to make products like cars, boats, recreational vehicles and cans. These producers say the tariffs have increased their costs, narrowing their profit margins and making it more difficult for their products to compete on the global market.
Some critics have also denounced the national security rationale for the tariffs, pointing out that the bulk of American aluminum imports come from Canada, a close military ally.