USTR: Steel Industry Understands Constructive Use of Tariffs
Less than a month from the election, Cleveland-Cliffs CEO Lourenco Goncalves invited U.S. Trade Representative Katherine Tai, Rep. Chrissy Houlahan, D-Pa., and Acting Labor Secretary Julie Su to speak at his company's Coatesville, Pennsylvania, mill about how recent policy has supported steelworkers.
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Houlahan, who represents that district, noted that a bill that passed Congress during the COVID-19 pandemic to help businesses brought "almost $60 million" to this mill. (It was $56 million.)
Tai said trade policy under President Joe Biden is flipping the script. Previously, she said, "We’ve been involved in a version of globalization for a long time now that has been about minimizing costs … I guess in order to maximize profits. Shareholders drive so much of what happens in our economy. We have ignored the larger costs that America, American communities have borne -- with trade policy leading the way."
She suggested that past administrations favored farmers' desire to grow exports over manufacturing workers' desires to keep their jobs.
"How do we negotiate free trade agreements that don’t bleed out entire industries, and leave communities suffering and without hope? This is well worth our fighting for," she said.
Tai said free trade agreements have to support middle-class growth abroad and at home to be worker-centered, and she said she wanted to pitch the idea to the steelworkers there that the new NAFTA is an improvement on the original, because it has helped 30,000 Mexican workers get contracts with better wages and benefits.
"This is something in our new trade policy that’s actually working," she said. "The renegotiated NAFTA is not the be-all, end-all. It’s not perfect." But, she said, "We have to recognize how it’s better, so we can continue the work of evolving our trade agreements away from a template that’s been incredibly damaging to us and our communities and also to our international relations."
Goncalves complained during the event that steelmaking in his company is "under attack," and that Mexican steel is entering through a "back door," which "complicates our lives in terms of trade." Steel from Mexico and Canada is the only steel not subject to either quotas or 25% tariffs. Ohio and Pennsylvania representatives have asked the administration to either rescind that exception or expand the Section 232 tariffs to downstream products made in Canada and Mexico with imported steel (see 2406260059 and 2301130054).
The Commerce Department, not the USTR, administers those tariffs, but the Section 301 tariffs, the largest trade action, are under USTR.
Tai said a worker-centered trade policy relies on "the strategic, smart defensive use of tariffs. We think about tariffs every single day. You understand better than anybody how tariffs can be used constructively, to level the playing field and give all of us a fighting chance -- and how tariffs can be used recklessly."
Goncalves, who said tariffs help us "bring back sanity to capitalism," said companies like his need predictability in tariff policy. "We can’t be surprised by the unthinkable," he said.
He told the small audience of his employees, "President Joe Biden, when he says I have your back, I believe it, that he has the back of the workers. His vice president, Kamala Harris, is on the same track."