Senate Finance chairman Chuck Grassley conceded one point this week: Steel and aluminum will be excluded from any reform of presidential power to impose tariffs based on national security interests. Even so, there is no agreement among senators on how Congress should reassert its authority over international trade.
“As of now, that legislation does not exist, due to concerns on both sides of the aisle,” said Oregon Sen. Ron Wyden, the senior Democrat on the Finance Committee. Grassley wants Wyden’s support as a step toward passing a reform bill by a large margin.
President Trump used a statute from the Cold War era, known as Section 232, to impose steep tariffs — 25 percent on steel and 10 percent on aluminum — on imported metals in March 2018. It was the first use of Section 232 in 34 years and was criticized as an overly broad use of executive power that would drive up the cost of manufactured goods. In the farm sector, there were fears of price increases on products made with large amounts of metal, such as farm equipment and grain bins. The tariffs prompted retaliatory duties on U.S. exports, including farm products.
In March, Grassley was hopeful of prompt and bipartisan action on Section 232 reform, considering Finance Committee members had filed three reform bills and a quarter of the Senate had cosponsored at least one of the Section 232 bills. All of the bills would set a time limit — 60 days, for instance — on Section 232 tariffs issued in the future unless Congress passes a resolution in support of them. On Tuesday, though, Grassley said there were repeated roadblocks.
“Every time we get close to marking up a Section 232 bill, Sen. Wyden hears from stakeholders who are profiting from tariff protections. Meanwhile, I get calls from colleagues who say: Mr. Chairman, the president won’t like us taking away his tariff law, and we don’t want to make the president upset,” said Grassley, an Iowa Republican, during a Senate speech. Lawmakers call bill-drafting sessions “mark ups.” When a chairman presents a draft bill for committee review, it is known as the chairman’s mark.
The Finance chairman said, “I’ve agreed to Sen. Wyden’s request to introduce a chairman and ranking member’s mark that does not unwind the Section 232 measures on steel and aluminum.” One of the Section 232 bills pending in the Senate, S 287, would revoke any Section 232 tariffs imposed in the past four years unless Congress passes a resolution of approval within 75 days of enactment.
“The imposition of these taxes, under the false pretense of national security (Section 232), is weakening our economy, threatening American jobs, and eroding our credibility with other nations,” said sponsor Sen. Pat Toomey, a Pennsylvania Republican, when S 287 was filed.
The chairman of the largest U.S. steel producer, Nucor Corp., say the steel and aluminum tariffs assure fair competition. “I think it needs to stay in place until trade deals are done with the individual countries that … make the leveling of the playing field a permanent thing,” Nucor CEO John Ferriola told American Metal Market a month ago.
Steel prices soared in 2018 but are 40 percent lower this year, according to one market index.
The Trump administration removed the Section 232 tariffs on steel and aluminum from Canada and Mexico in May, nearly a year after they were announced. U.S. and Canadian officials said they would monitor metals trade in the future. The United States blames China for a global oversupply of steel and aluminum and says the Section 232 tariffs are intended to prevent Chinese metal from entering through a back door.
Section 232, part of a 1962 trade law, allows the president to take actions, such as imposing tariffs and quotas, if imports of foreign products “threaten to impair” U.S. national security.
Grassley says his interest in reforming Section 232 “is not about President Trump. … Our Founding Fathers were explicit in tasking Congress with responsibility over international trade, and it’s time to rebalance Section 232 in line with their clear intentions.” Reforms would strengthen a president’s hand in trade disputes, he said, by making it clear that “when Section 232 is used, Congress stands with” the White House.