Background

President Biden announced Feb. 1 that the U.S. will not eliminate the 10 percent Section 232 tariff on aluminum articles imported from the United Arab Emirates, reversing a decision by former President Trump before he left office. The decision illustrates Biden’s intention to maintain existing tariff and trade policies until his administration conducts a thorough review of them and thus the importance for members of the trade community to implement effective tariff mitigation strategies.

The tariff on aluminum imports from the UAE was to have been removed as of Feb. 3 and replaced with a quota. However, in a Feb. 1 proclamation President Biden said available evidence indicates that imports from the UAE (which a New York Times article said shipped more aluminum to the U.S. than any other country except Canada in 2020) may still displace domestic production and thereby threaten to impair U.S. national security. For example, the proclamation said, 32 of 33 requests for exclusions from the tariff have been denied by the Department of Commerce, indicating “the large degree of overlap between imports from the UAE and what our domestic industry is capable of producing.” White House Press Secretary Jen Psaki added Feb. 2 that the decision to lift this tariff “was made clearly, in our view, on the basis of foreign policy issues unrelated to trade.”

The move to retain the tariff not only means a continuation of higher costs for this particular product but also signals that Biden intends to keep his word about making no changes to existing Section 301, Section 232, and other tariffs until his administration conducts a more thorough review of trade policy. Psaki said that review “is underway” and includes the previous administration’s “decisions on tariffs,” but she gave no indication as to when the review might be concluded.

As a result, increased tariffs on not only steel and aluminum imports but also billions of dollars’ worth of goods from China will likely remain in place for the foreseeable future. Sandler, Travis & Rosenberg trade policy advisor David Olave said importers should therefore continue to evaluate and implement strategies to mitigate the impact of those tariffs. For more information on such strategies, please contact Mark Segrist or Mark Tallo.

However, Olave said, the Biden administration’s review will likely be beneficial in the long run by providing the basis for a more objective and process-oriented approach to tariff policy than under the previous administration.

Copyright © 2021 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.

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