b'MARCH 14 - APRIL 3, 2022BREAKBULK QUARTERLY 15Revealed: Bidens steel tariff policyRecent agreements with Japan and the EU indi-cate the administrations hybrid approachBy Peter Buxbaum, AJOTEarlyFebruarysawthelikelywillcountJapanese conclusionofanagreementsteel currently excluded from betweentheUnitedStatesthe Section 232 tariffs against and Japan with respect to thethe new TRQ limits, accord-Trump-eraSection232tar- ing to Scott Lincicome, direc-iffs on steel. Coming as it didtor for general economics and threemonthsafterasimilartrade at the Cato Institute. Its accord was reached with thepossiblethesedifferences EuropeanUnion,theagree- werenegotiatedbecause, ment provided clarity on theunlike the EU, Japan will not Bidenadministrationsposi- be joining the U.S. in fram-tion on this issue. Both agree- inganewGlobalSustain-mentstooksimilartacksinableSteelArrangement,an partially lifting and partiallyeffort,explainedConnolly, sustainingtheSection232todecarbonizethesteel tariffs, an indication that thisandaluminumindustriesby hybrid approach is now Pres- establishingnewstandards ident Joe Bidens policy. (REVEALEDcontinued TheSection232tariffson page 21)wereintroducedbyformer President Donald J. Trump in June 2018, when he imposed a 25% tariff on European and Japanesesteelonnational securitygrounds.Whilethe tariffsgainedsupportfrom domesticsteelmanufactur-ers,theywereopposedby U.S.steelusers,because, combined with the effects of thepandemic,theycaused steelshortagesandhigher prices. Ford Motor Company, forone,estimatedthatthe Section 232 tariffs raised the costs of its U.S.-based manu-facturing by $1 billion.n ewa greeMentsBoththeJapanandEU agreementsallowaspeci-fied volume of steel to flow intotheU.S.tariff-free, basedondifferenthistori-calreferencepoints,while quantities above those levels will still be subject to a 25% tariffratequota(TRQ). Undertheagreementwith Japan,1.25millionmetric tons per year is the quantity eligiblefortariff-freetreat-ment,allocatedquarterly over 54 categories based on importlevelsin2018-2019. TheEUagreementallows 3.3 million tons in tariff free, equivalent to average annual exportsbetween2015and 2017.Whetherthosevol-umes, combined with domes-tic supply, will be enough to satisfy U.S. demand in a time ofincreasedinfrastructure spending is questionable. Thedifferinghistorical referenceperiodsforeach agreement is notable, because, according to Carolyn Bethea Connolly,aninternational tradeattorneyatFaegre Drinker,steelexportsfrom Japan sharply declined fol-lowing the 2018 implementa-tion of the Section 232 steel tariffs,so,thatthe2018-2019 based metrics result in a lower TRQ as compared to 2015-2017.The Japan agreement also differs from the EU in that it'