Posted on 26 Feb 2021
The US needs to acknowledge the overall significant issues caused by overcapacity in the global steel and aluminum markets and cannot rely solely on tariffs, US Trade Representative nominee Katherine Tai said in her confirmation hearing Feb. 25.
Former President Donald Trump instituted a 25% import tariff on steel and 10% import tariff on aluminum in March 2018 under Section 232 of the Trade Expansion Act of 1962. The rarely used trade remedy, which relies on a national security justification, does not have a set time for when it would expire or be adjusted.
Tariffs are a "legitimate tool" when it comes to trade, Tai said.
"Tariffs are a very important part of our fair-trade remedies, having said that, I think with respect to the Section 232 tariffs on steel and aluminum, we have to acknowledge we have overall a very significant global marketplace problem in the steel and aluminum markets that are driven primarily by China's overcapacity that it's built in production of these materials," she said. "But it's not just a China problem."
The US is going to need an effective solution that looks at the whole slew of policy tools to address that trade problem, she said.
While the Section 232 tariff program is managed by the Commerce Department, the USTR does play a role in shaping broader trade policy.
Tai said the US should be active in the WTO, however, the trade body needs reform. Conversations should be held in a constructive way focusing on the value of the WTO to its members and ways to modernize the organization to address today's needs, she said.
How the US competes effectively with China is going to be a top challenge, she said. China needs to live up to its commitments set up under Phase 1 of the US-China trade deal signed in January 2020, she said.
Additionally, Tai said enforcement is a critical component in making the US-Mexico-Canada agreement successful and said she is committed to using the new tools in the agreement.
"The key to... making it successful is to exercise the tools," Tai said.
Source:Platts
