This Morning in Metals: US trade court dismisses challenge to Section 232 steel tariff

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This morning in metals news: the United States Court of International Trade issued a ruling on the Section 232 steel tariff; meanwhile, the Biden administration has reversed a Trump administration decision regarding tariffs on aluminum from the United Arab Emirates; and, lastly, new orders for manufacturing goods rose for an eighth consecutive month in December.

USCIT dismisses Section 232 steel tariff challenge

In early 2018, former President Donald Trump imposed tariffs on imported steel and aluminum. Using Section 232 of the Trade Expansion Act of 1962, Trump imposed tariffs of 25% for steel and 10% for aluminum.

It is unclear if the new Biden administration will ultimately rescind the tariffs in a blanket sense (more on that shortly).

However, a trade court has shot down a legal challenge from domestic businesses.

Universal Steel Products, Inc., PSK Steel Corporation, The Jordan International Company, Dayton Parts, LLC, and Borusan Mannesman Pipe U.S. Inc. challenged the steel tariff, claiming injury from the duty.

The plaintiffs argued procedural deficiency behind the Section 232 implementation process. In addition, they claimed the president and then-Secretary of Commerce Wilbur Ross did not identify an “impending threat” when imposing the tariffs. They also claimed Trump violated provisions of Section 232 by not setting a duration for the action.

However, the three-judge panel on the United States Court of International Trade opted to dismiss the plaintiffs’ cross-motion for partial summary judgment.

“There have been proposals put forward suggesting greater Congressional oversight, including hearings, or statutory amendments which would expand Congress’s role in the implementation and review of tariffs,” Judge Gary S. Katzmann said in his opinion. “Ultimately, of course, these are policy matters that fall within the province of the legislative branch; it is not the role of the court to opine about them.”

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Biden to reverse Trump course on UAE aluminum tariff

In other tariff news, Trump — in his final hours as president — moved to rescind the Section 232 aluminum tariff of 10% for imports from the UAE.

However, the Biden administration this week announced it would maintain the tariffs on aluminum from the UAE.

“In my view, the available evidence indicates that imports from the UAE may still displace domestic production, and thereby threaten to impair our national security,” Biden’s proclamation earlier this week stated. “Proclamation 9704 authorized the Secretary of Commerce to grant exclusions from the aluminum tariffs based on specific national security considerations or if specific imported aluminum articles were determined not to be produced sufficiently in the United States, such that the imports would not diminish domestic production.”

In addition, the proclamation goes on to cite the overlap between domestic production capacity and the aluminum products coming in from the UAE.

“Tellingly, there have been 33 such exclusion requests for aluminum imported from the UAE, covering 587,007 metric tons of articles, and the Secretary of Commerce has denied 32 of those requests, covering 582,007 metric tons,” the proclamation text continued. “This indicates the large degree of overlap between imports from the UAE and what our domestic industry is capable of producing.”

New orders for manufactured goods rise

The Census Bureau reported new orders for manufactured goods in the US picked up for the eighth consecutive month in December.

New orders rose by 1.1% to $493.5 billion in December.

Furthermore, new orders for machinery rose by 2.7% to $33.4 billion.

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