Commerce Department recommends tariffs on steel, aluminum

Fredrick Soto
February 17, 2018

"The DOC reports provide a comprehensive listing of the countries - Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam - that have relentlessly violated trade laws".

Secretary Ross has recommended to President Trump three alternative remedies for dealing with the excessive imports of aluminum.

"The continued rising levels of imports of foreign steel threaten to impair the national security by placing the USA steel industry at substantial risk of displacing the basic oxygen furnace and other steelmaking capacity", report stated.

The President is required to make a decision on the steel recommendations by April 11, 2018, and on the aluminum recommendations by April 19, 2018. The alert by the European Commission also followed Trump's decision earlier in January to impose tariffs on US imports of solar panels and washing machines on the basis of rarely used "safeguard" rules.

Each of these remedies is meant to increase domestic steel production from its present 73% of capacity to approximately an 80% operating rate, the minimum rate needed for the long-term viability of the industry. US steel plants are running at 73 percent of capacity and aluminum plants at 48 percent.

Ross said that the decline in production capacity is "weakening our internal economy and may impair our national security", in the report.

-Impose tariffs of 24 percent on all steel and 7.7 percent on aluminum imports from all countries.

A quota on all steel products from all countries equal to 63% of each country's 2017 exports to the United States.

For aluminum, he recommended either a 7.7 per cent tariffs on the metal from all countries; a quota for all countries; or, perhaps the most shocking of all the options, a 23.6 per cent tariffs on imports of all products from China, Russia, Hong Kong, Vietnam and Venezuela. These investigations were carried out under Section 232 of the Trade Expansion Act of 1962, as amended.

Since the United States joined the World Trade Organization in 1995, it has only pursued two such investigations.

China this week appealed to President Trump to settle the steel and aluminum disputes through negotiation.

The Trump administration is also considering imposing sanctions against China for forcing American companies to share their intellectual property and stealing trade secrets.

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