Biden Tariff Policies: Red Light, Green Light
By Emerson Schwartzkopf
WASHINGTON – The Biden administration signaled this month that it’s willing to change United States’ policies on tariffs … but only to a point.
The back-and-forth transatlantic tariff battle over Airbus airliner construction could be headed to a settlement before summer after the U.S. Trade Representative (USTR) suspended the duties for four months.
However, the government is standing its ground in federal court concerning challenges over nearly all-encompassing tariffs on Chinese goods.
On March 12, the U.S. government defended the USTR’s Section 301 tariffs on imports from China from challenges by more than 3,600 U.S. companies.
A “master answer” filed by Acting Assistant Attorney General Brian M. Boynton with the U.S. Court of International Trade parried the numerous arguments that the USTR acted beyond its authority and violated federal-agency guidelines in setting Section 301 tariffs on Chinese goods.
The tariffs, now at 25%, were the centerpiece of former U.S. president Donald Trump’s strategy in what became a trade war with China.
The federal government, in its defense, characterized many of the objections are “plantiffs’ characterization of their case.” It also offered several defenses, including that:
• the USTR acted at the discretion of the president and wasn’t subject to the agency guidelines;
• reviewing a president’s discretionary decisions would “present a not-justiciable, political question;”
• the tariff action was exempt from federal-agency guidelines because it was a “foreign affairs function;” and
• the USTR followed federal-agency “informal rulemaking requirements” anyway.
In another foreign-trade battle, the U.S. Trade Representative (USTR) acted in early March to suspend the Airbus-related tariffs initiated against certain goods from the European Union and the United Kingdom. The tariffs won’t be collected for four months to encourage negotiations to settle the issue.
“The suspension will cover all tariffs both on aircraft as well as on non-aircraft products, and will become effective as soon as the internal procedures on both sides are completed,” noted a statement concerning the suspension of the EU tariffs.
“This will allow time to focus on negotiating a balanced settlement to the disputes, and begin seriously addressing the challenges posed by new entrants to the civil aviation market from non-market economies, such as China,” according to a similar statement halting the U.K. tariffs.
Before the suspension, the U.S. imposed a 25% tariff on more than 150 types of EU products.
No hard surfaces came under active tariffs, but a proposed list drawn up by the USTR in 2019 included quartz surfaces and all natural stone except marble and other calcareous varieties. The products could’ve been added to the active list during regular reviews by the USTR.
The World Trade Organization (WTO) ruled that the United States could set tariffs up to $7.5 billion annually as compensation in a 16-year dispute that essentially pitted U.S. aircraft manufacturer Boeing Co. against European aircraft maker Airbus Industrie. The United States claimed that subsidies by European governments to develop Airbus airliners created an unfair trade advantage in the civil-aircraft market for Boeing.
The initial ruling applied to all members of the EU, which then included the United Kingdom. After the completion of Brexit in January 2020, the USTR treats the EU and the U.K. as separate entities that are still subject to the WTO action.
Katherine Tai, the new U.S. Trade Representative under President Biden, indicated in testimony before Congress last month that resolving the Airbus tariff dispute is a priority.
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