As frustrating as this all is, it’s also a good reminder that the U.S. government could pursue plenty of meaningful tariff reforms without ever touching the China issue. (Spoiler: It won’t.)
Will Any of This Matter? (Maybe Not.)
While I applaud the Journal’s attention to the tinplate case, they misfire by framing the ultimate decision as one in President Biden’s hands. That’s because, as I’ve explained repeatedly, U.S. trade remedies law puts these cases on procedural autopilot and makes new duties extremely likely. Sure, there’s some methodological wiggle room here and there (e.g., on document production or final duty rates), but—as we saw recently with solar panels—simply terminating or even pausing these cases, even really dumb or damaging ones, takes extraordinary (and legally dubious) action from the president.
In fact, decades of congressional meddling and regulatory interpretation have ensured that much of what I’ve mentioned above can’t factor into the final agency decision to apply duties on these imports. The Commerce Department’s dumping calculations, for example, generate “dumping” in almost all cases, regardless of whether foreign producers are pricing below cost or have any predatory intent. The ITC’s “injury” determinations are a bit more intellectually honest, but even there the law generates an affirmative determination (and thus duties) where imports are increasing and simply a cause, not the principal cause, of injury to the domestic industry. The ITC is also barred by law from considering consumer harms, emergency situations, or the broader public interest. As an independent agency, moreover, the commission isn’t under the president’s thumb.
Given these realities, betting against new trade remedies duties is a surefire way to go broke. It can happen, but it’s rare, as the U.S. steel industry knows all too well. The facts here—increasing U.S. prices, insufficient domestic capacity, tinplate producers’ own statements and actions, pandemic-related disruptions, etc.—are so egregious that they might very well generate a negative ITC determination in a few months. If they don’t, however, the results will be a sad but unsurprising addition to the annals of American protectionism.
Chart of the Week
Wages in Europe stagnating versus the U.S.