US call for stiff tariffs on steel imports

On 16 Feb, Commerce released reports on its investigations of how steel and aluminium imports are affecting national security.

The agency carried out the investigations under Section 232 of the Trade Expansion Act of 1962, which empowers the federal government imports of goods and materials that might threaten national security.

In its report on steel, Commerce found that the US is the world's largest importer of steel, with steel imports outstripping exports by nearly four to one.

Total worldwide excess capacity in steel is 700 million tons, nearly seven times annual US steel consumption, the report said.

China alone produces nearly as much steel in a month as the US does in a year, Commerce said. For certain types of steel, such as for electrical transformers, only one US producer remains, it said.

Six basic oxygen furnaces and four electric furnaces have closed since 2000, and employment in the domestic steel industry has dropped 35 percent since 1998, according to the report.

It is now up to president Donald Trump to determine what actions should be taken. Commerce recommended three alternative remedies:

A global tariff of at least 24% on all steel imports from all countries;

A tariff of at least 53% on all steel imports from 12 countries, including Brazil, China, Costa Rica, Egypt, India, Malaysia, South Korea, Russia, South Africa, Thailand, Turkey and Vietnam, with a quota from all other countries equal to 100% of their 2017 exports to the US; or

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

The report also recommended an appeal process by which affected US parties may seek an exclusion from tariffs or quotas.

According to the report, Commerce would grant exclusions based on lack of sufficient US production capacity for specific steel products, or on specific natural security-based considerations.

Since early in the investigations, the US Tire Manufacturers Association (USTMA) has testified that placing tariffs on imported tire-quality steel wire rod, cord and bead wire could cause substantial harm to the US tire manufacturing industry.

Virtually all steel cord used in US tire manufacturing is imported, and domestic steel producers cannot meet the volume or quality demands of the tire industry, the USTMA said.

"We support the need to protect American workers and our economy from unfair trade practices that threaten our economic and national security," Anne Forristall Luke, USTMA president and CEO, said about the Commerce report.

"However, we are concerned that the Department of Commerce's recommendations may have unintended consequences for domestic tire manufacturers and the workers and industries they support," Luke said. "USTMA members must retain the capability to import the specialized steel products that are vital to making tires in the United States."

The Alliance of American Manufacturing (AAM) hailed the Commerce report.

"Trump is one step away from taking historic action to defend American jobs and security," AAM president Scott Paul said.

"Any exclusions deserve appropriate scrutiny," Paul said. "Otherwise, the Washington swamp will be filled with importers trying to undermine American jobs."

In the area of aluminium, Commerce recommended a tariff of at least 7.7% on all aluminium exports from all countries; a tariff of 23.6% on all aluminium products from China, Hong Kong, Russia, Venezuela and Vietnam; or a quota on all aluminium exports to the US equal to 86.7% of their 2017 exports.

President Trump has until 11 April to make a decision on steel remedies and until 19 April on aluminium remedies.