b'THE UNCONTAINEDThe Japan agreement also differs from the EUcompetitors.in that it likely will count Japanese steel currentlyImpact of US Demand for Steelexcluded from the Section 232 tariffs against the new TRQ limits, according to Scott Lincicome,For U.S. industries represented by the director for general economics and trade at theCoalition of American Metal Manufacturers and Cato Institute. Its possible these differences wereUsers (CAMMU), the TRQ scheme is unworkable negotiated because, unlike the EU, Japan willeven under the more generous EU agreement, not be joining the U.S. in framing a new Globalwhere, according to a statement, some steel Sustainable Steel Arrangement, an effort, explainedproducts quota filled up for the year in the first two Connolly, to decarbonize the steel and aluminumweeks of January as large companies stockpiled industries by establishing new standards forproduct. This type of government restriction carbon intensity.on raw materials, the statement added, leads The result, however, is that the TRQ for Japan,to market manipulations and allows for gaming according to Lincicome, has been set even furtherof the system that puts this countrys smallest below the amounts that would likely enter the U.S.manufacturers at an even further disadvantage.today in the absence of any trade restrictions.Meanwhile, the Biden administrations Japanese steel imports averaged over two-millioninfrastructure program will likely goose domestic tons during the pre-duty timeframe betweensteel demand. Just about any infrastructure 2015 and 2017, a period that was experiencingproject, such as energy, rail, roads, and bridges, far less industrial demand than today. Thus,said Ed Bastian, director global sales at BBC Lincicome concluded, the new TRQ level is, atChartering USA, an operator of multi-purpose and best, set at a paltry 61% of current U.S. marketheavy lift vessels, will require significant amounts demand and probably much lower than that.of steel manufactured goods. The $300 million The result will be to keep U.S. steel prices high,manufacturing plant being built at the Paulsboro leaving steel-consuming American manufacturersMarine Terminal in New Jersey to provideat a significant disadvantage versus their globalmonopiles for regional offshore wind farms, for Just about any infrastructure project, such as energy, rail, roads, and bridges will require significant amounts of steel manufactured goods.example, will require 150,000 tons of importedBut Biden had to navigate between two steel annually to meet its customers demands,important priorities: mending relationships according to Brendan Dugan, the assistantimperiled by Trump with traditional allies and executive director of the South Jersey Portssupporting the interests of the domestic steel Corporation (SJPC). industry and its labor unions. The latter, not The infrastructure bill does provide a Buysurprisingly, have had nothing but praise for the American provision, noted Bastian. However,recent agreements. Also, as noted in statements there are also provisions for a waiver system andfrom U.S. Trade Representative Katherine Tai, other cost thresholds which could open the doorthe Biden administration views the EU and Japan for foreign suppliers. But imported steel will stillSection 232 tariff agreements as a step toward be subject to existing tariffs, including the EU andachieving other U.S. policy initiatives, including Japan TRQs, should import volumes exceed thethose relating to U.S. competition with China and levels specified in the respective agreements. global efforts to combat climate change. Its worth noting that the imposition of theConsidering that these important U.S. allies Section 232 tariffs was based on suspect nationalhave agreed to go along with these schemes, it is security assertions by the former president. Noperhaps forgivable that Biden, purely from a policy country involved in either of these agreements hasand political standpoint, should have preserved represented a security threat to the U.S. since thean aspect of Trumps trade agenda. But whether end of World War II, making the tariffs ill-advisedthese agreements will allow U.S. domestic demand from the get-go. So, its unfortunate, from thatfor steel to be satisfied at reasonable prices in the perspective, that the Biden administration has seencurrent environment is another matter.fit to continue the tariffs in any form.11'