Trump now weighing options for global steel tariff; Canada will watch closely

Ann Santiago
February 17, 2018

The Commerce Department recommended the administration slap tariffs on steel and aluminum imported to the US after a lengthy investigation into the products' impact on national security.

The report found that US reliance on foreign-produced steel and aluminum, which is often government subsidized, could compromise national security because those products have crucial military uses. Those measures, which could be announced in the following weeks, are aimed at saving US steel and aluminum producers, who have struggled to compete with a flood of cheap metals from overseas, particularly from China.

As of February 15, 2018, the USA had 169 antidumping and countervailing duty orders in place on steel, of which 29 are against China, and there are 25 ongoing investigations.

Imposing tariffs on such widely used commodities may trigger retaliatory measures from China, the world's biggest producer of steel and aluminum. Due to that threat, Ross recommended the president reduce imports through quotas or tariffs. Under this option, the United States would also impose a quota limiting all other countries to the aluminum and steel they exported to the United States a year ago. "For certain types of steel, such as for electrical transformers, only one USA producer remains", the release stated.

Under these recommendations, tariffs on aluminum imports from China, Russia, Venezuela, and Vietnam specifically will climb to 23.5 percent.

The Commerce Department is recommending steep tariffs on foreign steel and aluminum.

During Trump's first year in office, the US trade deficit grew by 12 percent.

U.S. Commerce Secretary Wilbur Ross announced the recommendations Friday.

The measures would be in addition to any duties now in place. Any exclusions granted could result in changed tariffs or quotas for the remaining products to maintain the overall effect. "Our comments included non-exhaustive lists of steel and aluminum products that must be excluded from any import adjustments to keep our industry running smoothly. Infrastructure, which is necessary for our economic security, is a major use of aluminum".

The Aluminum Association Friday separately said while Commerce said job loss in the primary aluminum sector was 58% between 2013 and 2016, the total industry saw a slight increase in jobs during that period.

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

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.

The Commerce Department notes that no final decision has been made.

"As they dump steel, they pay tariffs - substantial tariffs - which means the United States would actually make a lot of money, and probably steel industry and aluminum industry would come back into our country".

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