US Commerce Secretary to reveal options for steel, aluminum tariffs

by Susie Olson February 17, 2018, 0:39
US Commerce Secretary to reveal options for steel, aluminum tariffs

WASHINGTON — The Trump administration on Friday recommended an array of stiff tariffs and other tough trade actions on imports of steel and aluminum from China and other nations, saying the influx of foreign metals has compromised national security.

The statement came in a report released Friday morning by the Commerce Department, the result of twin investigations initiated last April to determine whether steel and aluminum imports were threatening national security.

Nucor, the largest U.S. steel maker, climbed 4%, while U.S. Steel and AK Steel soared more than 10% apiece. USA steel plants are running at 73 percent of capacity and aluminum plants at 48 percent.

Imposing tariffs on such widely used commodities may trigger retaliatory measures from China, the world's biggest producer of steel and aluminum.

The tariffs, if adopted, would be another trade remedy undertaken by the Trump administration following its imposition of tariffs on imports of washing machines and solar cell panels made by South Korean and other companies. Ross also suggested limiting imports of steel into the United States.

The measures are meant to increase US production to 80 percent of capacity in both industries. Our imports are almost four times our exports.

He described how 1960s USA quotas on oil pushed then-ally Venezuela into the arms of Middle Eastern competitors, leading them to create the OPEC cartel - with, by the 1970s, disastrous consequences on oil prices, inflation, the broader global economy and the American energy supply. The first was a 7.7 percent tariff on all countries and all products.

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Senator Pat Toomey cautioned the president to proceed cautiously under Section 232 for national security reasons, arguing that USA defense needs account for only about 3 percent of domestic steel consumption. America now imports 90 percent of its primary aluminum.

Ross was asked whether the 232 remedies could pose a risk to downstream workers, such as those in the automotive industry, if those plants moved out of the United States in reaction to the possible restrictions on aluminum and steel. For example, there is only one remaining USA producer of the high-quality aluminum alloy needed for military aerospace.

Commerce Secretary Wilbur Ross last month submitted his department's final reports to Trump on steel and aluminum. "Infrastructure, which is necessary for our economic security, is a major use of aluminum".

The Commerce Department has recently brought trade cases to try to address the dumping of aluminum.

Commerce noted that as of Thursday, the USA had two antidumping and countervailing duty orders in place on aluminum, both against China, and there are four ongoing investigations against China.

The options suggested include limiting all countries to steel exports equal to 63 per cent of their 2017 exports into the USA, or a more severe quota for a smaller list of countries if Trump goes the more targeted route.

The country-specific aluminum tariff option would impose a 23.6 percent tariff on all products from China, Hong Kong, Russia, Venezuela and Vietnam.

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