It’s time to roll back tariffs on steel, aluminum

Section 232 tariffs, which didn’t help the economy, are hurting consumers and businesses

It has been well reported that New Jersey’s consumers and businesses continue to struggle with supply chain disruptions and historic inflation, causing job loss in many of our key manufacturing sectors.

A major culprit is the Section 232 tariffs on steel and aluminum — imposed by President Donald Trump in 2018. They continue to harm the state’s economy, negatively affecting New Jersey consumers and businesses alike.  Now is the time to remove these business-killing tariffs, particularly on aluminum imports, to create a sustainable supply for the growing needs in New Jersey.

These tariffs were supposed to benefit U.S. producers, but ultimately raised material costs for manufacturers and consumers.  The tariffs, coupled with a shaky, pandemic-fueled supply chain, have so far caused aluminum prices to skyrocket in New Jersey from $1,600 to $2,800 a ton, to date.

Two dozen business organizations, including the Business Roundtable, the Foreign Trade Council and the National Retail Federation, are asking President Joe Biden’s White House to roll back the Section 232 tariffs. Politicians on both sides of the aisle — from members in the New Jersey Legislature to our Congressional delegation — must also urge the president to do away with this bad policy, as it is bad for New Jersey’s construction sector.

In the case of aluminum, American producers can now only meet 20% of annual U.S. demand. The bulk of the remaining 80% has been provided by our trading partners, who rely on American orders to compete with China’s vast coal-fueled production of aluminum.

The added tariff burden works its way into everything from beer cans for New Jersey’s craft brewers to equipment frames at cloud computing server farms in our state that historically fueled financial transactions on Wall Street.

Tariffs have also done little to help America’s building material industry, which has seen eight smelters shut down since 2014. Domestic production of aluminum is now at an 80-year low as a proportion to the enormous actual demand.

Removing these tariffs would allow partnerships with key American allies to develop the low-carbon processes that would reduce climate warming and help our country meet COP26 greenhouse gas reduction targets.

There is a need to act now. New Jersey is poised to undertake billions in infrastructure projects under the $1.2 trillion federal infrastructure plan. The accessibility to quality, affordable building materials is a lynchpin to the entire Build Back Better plan.

At my own construction business, I continually hear how tariffs continually prove to be a serious impediment to trade. Removing them would benefit our manufacturers’ access to overseas markets, ultimately stimulating New Jersey’s business sector.

To put an end to the Section 232 tariffs and reform the process for the implementation of future tariffs, U.S. Sens. Pat Toomey (R-Pa.) and Mark Warner (D-Va.) introduced new bipartisan legislation in October 2021.  The bill requires presidentially proposed tariffs for national security purposes to be subject to review and approval by Congress before going into effect.

Such a smart law would help combat increased costs for consumers as well as manufacturers, and strengthen our trade relationships as New Jersey continues to rebuild and plan for the future.

Assemblyman Robert Karabinchak (D-Edison) is the vice chair of the Assembly Commerce and Economic Development Committee.