US Steel, Alcoa shares jump after tariff proposal

Ashley Carr
February 17, 2018

The administration of US President Donald Trump is considering imposing high tariffs on imported steel on national security grounds. The investigation took place under the seldom-used Section 232 of the Trade Expansion Act of 1962. The section allows import restrictions on materials that have national security implications.

Other options would impose high tariffs or quotas on steel and aluminium imports. This option also includes a quota on the amount of steel that can be imported from these nations. "We can not be without an aluminum industry".

There is 700 million tons of global excess steel capacity.

The reports recommend that Ross be allowed to grant requests from US companies to exclude specific products if the USA lacks sufficient domestic capacity or for national security considerations.

While there is little doubt that steel is necessary for USA military superiority, as R Street pointed out in a January policy study by Trade Policy Manager Clark Packard, only 3 percent of steel shipped domestically in 2016 was used for national security or homeland security purposes. Employment in the steel industry has declined by 35 percent since 1998.

"We really don't think there is very much likelihood of that", Ross said, "the reason being if you look at the percentage that steel constitutes of a total price of a auto at the retail level, it's quite small, and if you multiply that by the percentage of the tariff it gets even smaller". As of February 15, there are 169 antidumping and countervailing duty orders on steel imports. In that same five-year period, Chinese imports of semi-fabricated products increased more than 228 percent.

Meghan Markle ups the fashion ante in latest royal visit
Markle accessorized with a purse from the brand Strathberry , an Edinburgh-based luxury label, according to People . It was the couple's fourth official engagement together as Harry introduces Markle to various parts of Britain.

A tariff of at least 53% on 12 countries' imports, Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam. There's also an option for 23.6% tariffs on aluminum imports from China, Hong Kong, Russia, Venezuela, and Vietnam, with quotas for all other countries.

Ross recommended an across-the-board tariff of 24% on imports from all countries, or tariffs of at least 53% on imports from 12 countries in particular, including China and Russian Federation. More than two dozen US steel and steel-related companies and associations wrote Trump a letter on February 2 urging "strong action" to support domestic steel.

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.

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

Trump must make a decision by April 11.

Recommendations included a tariff of at least 24 percent on all steel imports and a tariff of at least 7.7 percent on all aluminum imports. Chinese primary aluminum capacity exceeded production by more than 9 million tons previous year - which is five times all existing capacity in the United States. He revealed in January that the inquiries were over.

Other reports by My Hot News

Discuss This Article