Biden Makes His First Protectionist Trade Policy Error Already
Biden Reinstates Aluminum Tariffs
In one of his first trade moves Biden Reinstates Aluminum Tariffs
President Biden reinstated tariffs on aluminum exported from the United Arab Emirates on Monday evening, reversing President Donald J. Trump’s decision to lift them on his last day in office.
The decision is one of Mr. Biden’s first significant moves on trade and suggests that his administration may be inclined to maintain the type of hefty tariffs Mr. Trump imposed on foreign metals to protect domestic industry. That position found favor with unions, but disappointed industries and businesses that have argued the tariffs raise costs.
In March 2018, Mr. Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from a variety of countries, including the United Arab Emirates, saying their metal exports had put American aluminum producers out of business and therefore threatened national security. He subsequently exempted aluminum from Argentina, Australia, Canada and Mexico and, just hours before his term ended, lifted the aluminum tariffs on the UAE.
Mr. Trump’s decision appeared to be motivated more by political than economic considerations. The decision to lift tariffs on the United Arab Emirates was led by White House officials, including Mr. Trump’s son-in-law, Jared Kushner, who had just carried out extensive negotiations to normalize relations between Israel and the United Arab Emirates.
Politically Motivated But So What?
Lifting the tariffs was motived by politics. But in this case, so what?
It was the correct thing to do regardless of motivation.
Biden flunked his first trade test. Unfortunately, I suspect more trade failures are on the way.