Biden faces dilemma over Trump’s steel tariffs
CLEVELAND – President BidenJoe BidenPutin backs Lukashenko in Belarus amid international pressure from the Biden administration to reimpose sanctions on Belarus for hijacking Senate passes resolution calling for investigation into origins of COVID-19 faces a dilemma over whether to lift tariffs on steel and aluminum imports imposed on the European Union by the Trump administration.
Biden wants to ease tensions with European allies and has faced pressure from the US Chamber of Commerce and domestic industries that depend on metals to lift tariffs.
However, the president risks angering steelworkers and other unions if he takes this step, especially since the US steel industry has exploded with the tariffs in effect. It would give Republicans a chance to strike Democrats ahead of midterm elections in crucial states like Pennsylvania and Ohio, where the steel industry is strong.
“It’s just a tough question because, obviously, for steel makers, for steel workers, for people who work in this industry who want to see more jobs created, a price increase is more good news, ”said Pennsylvania-based Democratic strategist Mark Nevins. “On the other hand, for consumers, one of the downsides of trade wars is that prices go up for consumers.”
Biden won Pennsylvania by about 80,000 votes in November, but lost Ohio to the former President TrumpDonald Trump NY, NJ Rail Project Gets Key Federal Approval Senate Collapse Reveals Growing Fan Gap DHS Formally Bans Family Separations For Illicit Border Crossings READ MORE by around 500,000 votes. Both states have competitive Senate and House races next year, which will be essential for Democrats as they attempt to maintain their razor-thin majorities in both chambers.
The White House is reviewing tariffs on goods from the EU and China, but has made no promises to lift them. At the same time, the United States Trade Representative Katherine taiKatherine TaiBiden Faces Trump On The Money Steel Tariff Dilemma: Biden Administration Launches Trade Dispute Against Canadian Dairy Industry | Warren urges Biden to replace Fed administration Quarles Biden launches trade dispute against Canadian dairy industry READ MORE has engaged with EU officials to quell trade disputes that peaked under the Trump administration and that have led to a series of retaliatory tariffs on U.S. exports.
Last week, seven major steel groups and unions, including the United Steelworkers and Steel Manufacturing Association, sent Biden a letter urging him to keep the tariffs in place.
“The tariffs were made necessary by repeated surges in steel imports driven by the global steel overcapacity that threatened our industry and the nearly two million jobs it supports,” they wrote, adding that the import taxes “have been a success, allowing our industry to restart sluggishly. factories, rehire laid-off workers and invest in the future.”
But automakers and parts producers, who see their costs rise when the price of steel is more expensive, have demanded that Biden remove the tariffs. They are joined by other exporting industries which have been hit by counter-tariffs, adding a complicated wrinkle to the political calculation.
Biden is traveling to Cleveland on Thursday to deliver remarks on his economic program that the White House says will highlight the successes of his $ 1.9 trillion coronavirus relief plan as well as his infrastructure and family proposals.
Biden has positioned himself as a champion of unions and middle-class workers, pledging to focus his agenda on growing the economy “from the bottom up, in the middle” as the pandemic abates.
Trump won Ohio in 2016 and 2020, in part, appealing to the state’s industrial workers, who have long supported Democratic candidates. The turnaround was particularly evident in the Mahoning Valley, which includes the town of Youngstown and has a history of steel production dating back to the 19th century.
Last year, Trump became the first Republican to win Mahoning County since 1956, beating Biden by 2 percentage points. The former president also built on his 2016 victory in neighboring Trumbull County, where he won by 10 points in 2020, up 4 points from the first time.
“Donald Trump had won by more than 8 points [in Ohio] because of his ability to connect with those Democratic unions, so to speak, ”said Capri Cafaro, the former Democratic Minority Leader in the Ohio State Senate, who represented parts of the Valley of Mahoning.
Still, some Democrats are resonating with Steel Country voters. representative Tim ryanTimothy (Tim) RyanBiden faces a dilemma over Trump’s steel tariffs Tim Ryan: GOP becomes ‘twisted in knots, trying to figure out how to turn’ Jan 6 Tim Ryan gives a furious speech on the floor of the House slamming GOP on January 6 commission PLUS (D) was re-elected in Mahoning County last year by nearly 14 points, extending a career in Congress that began in 2003.
For much of this period, steel has been a major concern of his constituents.
Ryan, who is now hoping to win the seat left vacant by the senator. Rob portmanRobert (Rob) Jones PortmanTrump, Midway Fuel GOP Efforts to Cancel Jan 6 Commission ‘SECURE 2.0’ to Modernize Retirement Security for Post-COVID U.S. Workforce Schumer and Collins Seem having exchanged before the vote of January 6 PLUS (R), met steelworkers Monday in Richland and visited a Trumbull County steel plant two days later.
“Tim has spent his career defending the Ohio steel industry and the workers who run it – and has long been a strong advocate for tariffs and other measures to crack down on China and other countries. who have engaged in illegal practices aimed at undermining American steel jobs. ” Ryan’s spokesperson Izzi Levy told The Hill.
The debate between free trade and fair trade has divided Democrats nationally in recent years. As the Obama administration pressured Democrats to adopt the Trans-Pacific Partnership trade deal, the 2016 Democratic presidential candidate Hillary ClintonHillary Diane Rodham Clinton Bernie Sanders demands king-size hotel beds, cool rooms, book says Biden faces steel tariff dilemma Trump GOP bets with Pelosi opposing commission of January 6 MORE In particular, it distanced itself from the multilateral trade agreement during its campaigns in states such as Ohio.
“The Ohio Democrats, a lot of the Midwestern Democrats, a lot of work-centric Democrats, so to speak, have always said free trade is fair trade – trying to be tough on China and not be for things like the Fast Track Authority for the Trans-Pacific Partnership, ”Cafaro said.
Although Trump is not on the ballot next year, Republicans hope to indirectly put his economic policies on the ballot.
“For traditional Ohio industries, Donald Trump has done pretty well, and owners and workers have appreciated Trump’s policies,” said Columbus, Ohio-based GOP strategist Mark Weaver. . “Biden has a lot more problems in this area and the palpable economic decline is right in front of his eyes. This creates problems for Democrats, including Tim Ryan.
Charlie Gerow, a Republican strategist in Pennsylvania, argued that lifting tariffs would hurt Democrats in the western part of Keystone state, where Biden’s policies on coal and natural gas are already creating tensions.
Although tariffs were a hallmark of Trump’s trade policy, Biden would have political cover if he decided to leave them in place.
“Four years ago, the US primary aluminum industry was hanging by a thread,” said report The Left Institute for Economic Policy said Wednesday, noting that aluminum production rose 37.6% after Trump’s tariffs took effect.
The report argues that the price increase had no significant effect on consumer prices or on other industries.
But Biden faces the added challenge of dealing with trade policies amid an uneven economic recovery, which raises questions about how tariffs might play into broader concerns about inflation.
Some economists have sounded the alarm over recent price spikes, saying Biden’s large spending programs could result in even higher costs for an extended period.
Michael Cembalest, chairman of investment strategy at JP Morgan Asset and Wealth Management, said in a recent report that decades of lowering trade barriers and lowering capital flows have paved the way for low inflation.
“For years, analysts have correctly described globalization as deflationary,” he wrote, highlighting in particular the role of production inputs that include raw materials like steel. “I don’t know how to avoid concluding that de-globalization will be inflationary.”
But Joe Gagnon, a senior researcher at the Peterson Institute for International Economics in Washington, says that while tariffs can drive up some prices, they have little to do with generalized inflation.
“The economy basically wants to maintain the same trade balance, which is pulled by other forces,” he said. “Tariffs tend to drive up the dollar, and that drives down other import prices.”
For Biden, the most immediate question about tariffs concerns domestic steel and aluminum manufacturers, who want prices to stay high, and companies that depend on those products and want to see prices move in the other direction. .
“The administration is really torn between two competing priorities. On the one hand, it wants to resolve outstanding trade disputes with the EU and present a more united front in its relations with China. But on the other hand, the administration has made it clear that it wants a worker-centric trade policy here in the United States, and the lifting of tariffs will meet with considerable opposition from metalworkers and workers alike. ‘other unions,’ said Edward Alden, a trade expert. to the Council for External Relations.
“It’s just a difficult dilemma that the administration faces.”