FEBRUARY 8 UPDATE: The United States will remove Section 232 tariffs affecting steel imported from Japan starting April 1. The countries announced Monday that the tariffs will be removed from 1.25 million metric tons of steel produced in Japan. This agreement does not affect aluminum trade from the country, and any steel imported beyond that will reimpose the 25% tax.
Former President Donald Trump issued an order in March 2018 to impose a 25% global tariff on imported steel and 10% on aluminum, and after almost four years, there is no end in sight for these import taxes. The Section 232 order aimed to increase domestic steel production and address excess steel capacity that has been “dumped” into the United States from international sources.
The solar industry relies on steel and aluminum for the structural elements of arrays. The modules themselves are encased in aluminum framing; and the racking and mounting hardware, especially on ground-mounted projects, primarily use steel.
Section 232 of the Trade Expansion Act of 1962 gives the president the option to impose restrictions on imported goods that are determined to pose a threat to national security. By reducing domestic steel production, the United States would rely too much on imported metals, not meeting “demands for national defense and critical industries in a national emergency,” and ultimately harm the country’s economy, the proclamation claimed.
“This relief will help our domestic steel industry to revive idled facilities, open closed mills, preserve necessary skill by hiring new steelworkers and maintain or increase production, which will reduce our nation’s need to rely on foreign producers for steel and ensure that domestic producers can continue to supply all the steel necessary for critical industries and national defense,” the proclamation reads.
President Joe Biden hasn’t indicated that he will revoke Trump’s Section 232 steel tariffs, which impose costs on steel and aluminum imported from all countries except Mexico and Canada.
“I will review the existing 232 tariffs and any other tariffs that have been put in place to ensure our trade policies achieve the goal of supporting workers and growing our middle class, both now and in the long-term,” Biden wrote in a questionnaire. “We first need to carefully evaluate all of the steps taken by this administration, including the private deals and assurances that may have been made.”
Biden is facing pressures from steelworker unions to both revoke and maintain the tariffs. As of September 2021, the number of steel industry jobs was trending downward.
The United States and the European Union released a statement January 19 that they are discussing resolutions on the steel and aluminum tariff imports for Britain. However, there is still no end date disclosed for sunsetting the Section 232 tariffs.
Read managing editor Kelsey Misbrener’s update on Section 301 tariffs affecting Chinese-manufactured inverters here.
It’s more than placing tariffs on foreign steel and aluminum to “open” closed plants. It is all about energy and its cost. You will have to cut out the middleman, bring down energy costs for the process to become competitive in the steel and aluminum industry once again. I believe over the last few years we have witnessed tariffs really don’t work and with technology, probably never will again.