US Commerce Department proposes hefty import curbs on steel, aluminium

WASHINGTON: The US Commerce Department has recommended that President Donald Trump impose steep curbs on steel and aluminium imports from China and other countries ranging from global and country-specific tariffs to broad import quotas, according to proposals released on Friday.
China’s Commerce Ministry responded by saying the report was “baseless” and did not accord with the facts, and that China would take necessary steps to protects its interests if the final decision affects China.
The long-awaited unveiling of Commerce’s “Section 232” national security reviews of the two industries contained global tariff options of at least 24 per cent on all steel products from all countries, and at least 7.7 per cent on all aluminium products from all countries.
Trump authorized the probes under a 1962 trade law that has not been invoked since 2001. He has until April 11 to announce his decision on steel import curbs and by April 20 to decide on aluminium restrictions.
Commerce Secretary Wilbur Ross emphasised that Trump would have the final say, including on whether to exclude certain countries, such as Nato allies, from any actions.
“The president has the discretion to modify any of these or to come with something totally different,” he told reporters on a conference call.
He said a global tariff would cover every steel and aluminium product entering the American market from China. China’s Commerce Ministry urged the United States to exercise restraint in using trade protection tools, respect the rules of multilateral trade and make a positive contribution to the international economic and trading order.
“If the final US decision affects China’s interests, China must take necessary measures to protect its own reasonable interests,” the ministry added, without giving details.
Steel stocks soared with US Steel closing up 14.7 per cent, AK Steel up 13.7 per cent, Nucor ended up 4.5 per cent and the broader S&P 1500 steel index 5.3 per cent higher.
Century Aluminium shares closed up 8.3 per cent, while Alcoa, which has operations across the globe, ended off 0.44 per cent.
Alcoa said in a statement the US trade actions should focus on Chinese overcapacity and not penalize nations that abide by the rules.
Ross said he would not be surprised if countries challenged the measures at the World Trade Organization.
He said “there has been no dialing back” of the recommendations due to objections from industries that use steel and aluminium.
“The objective of both reports is to get the production up to a level which will result, in our judgment, in the long term viability of each industry,” Ross said, adding that he did not believe that the recommendations would lead to significant price hikes.
US Senate Democratic leader Chuck Schumer said he hoped the proposals “are the beginning of efforts by this administration to finally get tough on China.”
Alternatively, Commerce recommended a tariff of at least 53 per cent on all steel imports from 12 countries — Brazil, China, Costa Rica, Egypt, India, Malaysia, Russia, South Korea, South Africa, Thailand, Turkey and Vietnam.
Other countries would be subject to a quota limiting their tariff-free access equal to their 2017 steel exports to the United States.
The country-specific aluminium option would impose a 23.6 per cent tariff on all products from China, Hong Kong, Russia, Venezuela and Vietnam. All others would be subject to quotas equal to their 2017 exports to the United States.
A third option called for Trump to impose global quotas based on 63 per cent of each country’s 2017 steel exports and based on 87 per cent of their aluminium exports to the United States. — Reuters