One of the first things President Biden should have done upon taking office was to eliminate the Trump tariffs. This would have provided potent economic stimulus without any additional spending. Instead, as my colleague Iain Murray points out, Biden is making the Trump tariffs his own—along with all of the consumer harm, corporate cronyism, slowed recovery, and diplomatic strain that tariffs cause.
It is easy to see why some steel producers are lobbying to keep steel tariffs in place. Steel prices are at record highs, and U.S. steel companies don’t have to worry about customers getting a better deal from someone else. However, steel-using industries, from autos to construction, are paying record-high costs, and passing them on to consumers. Steel’s gain is offset by everyone else’s loss, to the tune of about $900,000 per steel job saved.
Meanwhile, President Biden is proposing to double tariffs on Canadian lumber, at a time when lumber prices are also at record highs. First, this is a dubious foreign policy gesture. Canada is an ally, with whom we just signed the USMCA trade deal. Second, and closer to home, housing prices are increasing rapidly, up and out of reach for many families. The administration has some explaining to do about why it wants to make housing even less affordable when the economy is still in recovery mode.
Congress should not let President Biden copy his predecessor’s mistakes. They should reclaim the tariff-making authority they mistakenly gave away to the president. Congress can do this by repealing Section 232 of the 1962 Trade Expansion Act and Sections 201 and 301 of the 1974 Trade Act. These are what made the Trump-Biden tariffs possible, and apparently it will take Congress to stop them. The time to act is now.
For more on how to improve trade policy, see the trade chapter in CEI’s recently released Agenda for Congress.