Global Trade Wars Begin: Ross Recommends Major Tariffs On Steel, Aluminum Focusing On China, Russia

Update 3:

As previewed earlier, at noon on Friday the commerce department released reports on the U.S. Department of Commerce’s investigations into the impact on our national security from imports of steel mill products and from imports of wrought and unwrought aluminum. These investigations were carried out under Section 232 of the Trade Expansion Act of 1962, as amended. All classified and business confidential information in the reports was redacted before the release.

Specifically, the department, found that the quantities and circumstances of steel and aluminum imports “threaten to impair the national security,” as defined by Section 232.

“I am glad that we were able to provide this analysis and these recommendations to the President,” said Secretary Ross. “I look forward to his decision on any potential course of action.”

Others were less sanguine. A former senior government trade official quoted by Axios, said that without major exemptions, these recommendations would represent: "[T]he opening shot in a trade war... a declaration of war against the world on aluminum and steel... These are some of our closest treaty allies... These are some serious numbers."

And another quote from a trade expert: "This would be beyond a trade war. You're talking about blowing up the WTO."

As the Commerce Dept's press release adds:

the reports are currently under consideration by the President, and no final decisions have been made with regard to their contents. The President may take a range of actions, or no action, based on the analysis and recommendations provided in the reports. Action could include making modifications to the courses of action proposed, such as adjusting percentages.

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.

As previewed earlier, here is a summary of the Steel and Aluminum report recos:

  • On steel the options include: a global tariff of at least 24% on all steel imports from all nations; tariff of at least 53% on all steel imports from 12 nations with a quota by product for all steel products from all countries equal to 100% of their 2017 exports to U.S.; quota on all steel products from all nations equal to 63% of 2017 exports
  • On aluminum the options include: tariff of at least 7.7% on all aluminum exports from all countries; 23.6% tariff on all products from key nations; quota on all imports from countries equal to maximum of 86.7% of 2017 exports

And the detailed findings and recommendations:

Key Findings of the Steel Report:

  • The United States is the world’s largest importer of steel. Our imports are nearly four times our exports.
  • Six basic oxygen furnaces and four electric furnaces have closed since 2000 and employment has dropped by 35% since 1998.
  • World steelmaking capacity is 2.4 billion metric tons, up 127% from 2000, while steel demand grew at a slower rate.
  • The recent global excess capacity is 700 million tons, almost 7 times the annual total of U.S. steel consumption. China is by far the largest producer and exporter of steel, and the largest source of excess steel capacity. Their excess capacity alone exceeds the total U.S. steel-making capacity.
  • On an average month, China produces nearly as much steel as the U.S. does in a year. For certain types of steel, such as for electrical transformers, only one U.S. producer remains.
  • As of February 15, 2018, the U.S. had 169 antidumping and countervailing duty orders in place on steel, of which 29 are against China, and there are 25 ongoing investigations.

Recommendations of the Steel Report:

Secretary Ross has recommended to the President that he consider the following alternative remedies to address the problem of steel imports:

  1. A global tariff of at least 24% on all steel imports from all countries, or
  2. A tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or
  3. A quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.

Each of these remedies is intended 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. Each remedy applies measures to all countries and all steel products to prevent circumvention.

The tariffs and quotas would be in addition to any duties already in place. The report recommends that a process be put in place to allow the Secretary to grant requests from U.S. companies to exclude specific products if the U.S. lacks sufficient domestic capacity or for national security considerations. Any exclusions granted could result in changed tariffs or quotas for the remaining products to maintain the overall effect.

Click HERE to view the Steel Report with classified and business confidential information redacted.

Key Findings of the Aluminum Report:

  • Aluminum imports have risen to 90% of total demand for primary aluminum, up from 66% in 2012.
  • From 2013 to 2016 aluminum industry employment fell by 58%, 6 smelters shut down, and only two of the remaining 5 smelters are operating at capacity, even though demand has grown considerably.
  • At today’s reduced military spending, military consumption of aluminum is a small percentage of total consumption and therefore is insufficient by itself to preserve the viability of the smelters. For example, there is only one remaining U.S. producer of the high-quality aluminum alloy needed for military aerospace. Infrastructure, which is necessary for our economic security, is a major use of aluminum.
  • The Commerce Department has recently brought trade cases to try to address the dumping of aluminum. As of February 15, 2018, 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.

Recommendations of the Aluminum Report:

Secretary Ross has recommended to President Trump three alternative remedies for dealing with the excessive imports of aluminum. These would cover both aluminum ingots and a wide variety of aluminum products.

  1. A tariff of at least 7.7% on all aluminum exports from all countries, or
  2. A tariff of 23.6% on all products from China, Hong Kong, Russia, Venezuela and Vietnam. All the other countries would be subject to quotas equal to 100% of their 2017 exports to the United States, or
  3. A quota on all imports from all countries equal to a maximum of 86.7% of their 2017 exports to the United States.

Each of the three proposals is intended to raise production of aluminum from the present 48% average capacity to 80%, a level that would provide the industry with long-term viability. Each remedy applies measures to all countries and all steel products to prevent circumvention.

The tariffs and quotas would be in addition to any duties already in place. The report recommends that a process be put in place to allow the Secretary to grant requests from U.S. companies to exclude specific products if the U.S. lacks sufficient domestic capacity or for national security considerations. Any exclusions granted could result in changed tariffs or quotas for the remaining products to maintain the overall effect.

Click HERE to view the Aluminum Report.

* * *

Update 2: we may have spoken to soon when we said that it was unlikely that the US would not fire a trade war salvo today.

According to subsequent reports, the U.S. Commerce Department has found that steel and aluminum imports threaten national security and recommends tariffs and quotas on imports, according to Bloomberg and Reuters reports. Specifically, focusin on Aluminum, Wilbur Ross's department will:

  • Recommend 7.7% tariffs on all aluminum imports from all countries.
  • Recommend about a 23.5% tariffs on aluminum imports from China, Russia, Venezuela and Vietnam
  • Recommend quota on imports from all countries up to a maximum of 86.7% of their 2017 exports to the U.S.

As for Steel, the commerce department will:

  • Recommend a global tariff of 24% on all imports
  • Recommend a tariff of at least 53% from  Brazil, China, Costa Rica, Egypt, India, Malaysia, Korea, Russia, South Africa, Thailand, Turkey and Vietnam
  • Recommend a quota of 63% of 2017 exports for the countries listed above.

A former senior government trade official quoted by Axios, said that without major exemptions, these recommendations would represent: "[T]he opening shot in a trade war... a declaration of war against the world on aluminum and steel... These are some of our closest treaty allies... These are some serious numbers."

As a reminder, the fight over whether to use the Section 232 law, i.e. "national security" to impose tariffs has already become the hottest trade fight inside the Trump White House. As Axios notes, Gary Cohn, Steven Mnuchin, Rex Tillerson and James Mattis have all been fighting against these tariffs on steel and aluminum — arguing they would harm the global economy and damage relationships with allies. Congress would also likely be upset about the imposition of national security tariffs in direct conflict with the Secretary of Defense.

And another quote from a trade expert: "This would be beyond a trade war. You're talking about blowing up the WTO."

* * *

Update 1: call has been delayed to 12pm EST

  • U.S. COMMERCE DEPT DELAYS CALL ON STEEL, ALUMINUM IMPORTS

* * *

At 10:30am on Friday, US commerce secretary Wilbur Ross will hold a briefing with reporters on the ongoing discussion over steel and aluminum tariffs, as part of the Section 232 Steel report that was sent to Trump one month ago:

  • COMMERCE'S ROSS TO BRIEF REPORTERS ON STEEL, ALUMINUM REPORTS
  • COMMERCE COMMENTS IN EMAILED STATEMENT ON 232 BRIEFING TODAY

As a reminder, on January 11 the Commerce Dept delivered the results of its investigation into steel and aluminum imports as part of what is scalled a "Section 232" review, which focuses on national security. The President then has 90 days to decide on any action, which is April 11. He could use tariffs or specifically target companies.

According to newswires, Ross will not announce Trump's decision on the report just yet, so anyone expecting the launch of trade war with China today will be disappointed.

We will bring you highlights from the report as they come in.

Comments

Slippery Slope Looney Fri, 02/16/2018 - 11:51 Permalink

This is great for the American Aluminum producers but it means the price of Aluminum will go up in America. That’s bad for manufacturers here.

 

Meanwhile, the price of Aluminum will drop in China, which is great for manufacturers there. It means cheaper exports, which hurts our economy.

 

The government has to focus on finished products, not raw materials.

In reply to by Looney

All Risk No Reward All Risk No Reward Fri, 02/16/2018 - 12:41 Permalink

BTW, the Money Power Sith Lords are preparing the debt-money bubble they scientifically created to scientifically pop so they can asset strip the gullible, ignorant Muppetry of all their collateralized debt.

Poof, it's gone, mofos, ALL BY DESIGN.

“The new law will create inflation whenever the trusts want inflation. From now on depressions will be scientifically created.”
~Congressman Charles A. Lindbergh, after the passage of the Federal Reserve act 1913.

“The one aim of these financiers is world control by the creation of inextinguishable debt.”
~Henry Ford

Note, if you own it, THEY DON'T CONTROL IT, B*EZ!

This is Money Power ECONOMIC WARFARE, and all the Muppets can do is blame other Jewish Muppets.

The level of mental retardation is, frankly, retarded.

In reply to by All Risk No Reward

All Risk No Reward khnum Fri, 02/16/2018 - 12:47 Permalink

Alcoa was behind the fluoridation of the water with toxic waste that binds up magnesium.

Why is this important? Because magnesium deficiency drives all kinds of diseases and neurological problems.

For instance, the number of synapses in the brain correlate very strongly to the amount of magnesium in the brain.

Shut off the magnesium to the brain, reduce the synapses, and lower IQ of you helot debt-slaves too stupid to to have an anagnorisis even when the whole plot is laid out using 5th grade mathematics.

Impact of fluoride on neurological development in children
https://www.hsph.harvard.edu/news/features/fluoride-childrens-health-gr…

7 IQ points worth of brain damage correlated with that magnesium binding fluoride - and that's probably not the kind that is scraped from the phosphate mining smokestacks and put in your water (hydrofluorosilicic acid).

Oh, you didn't know? You weren't PROGRAMMED to know, that's why.

“Universal literacy was supposed to educate the common man to control his environment. Once he could read and write he would have a mind fit to rule. So ran the democratic doctrine. But instead of a mind, universal literacy has given him rubber stamps, rubber stamps inked with advertising slogans, with editorials, with published scientific data, with the trivialities of the tabloids and the platitudes of history, but quite innocent of original thought. Each man's rubber stamps are the duplicates of millions of others, so that when those millions are exposed to the same stimuli, all receive identical imprints. It may seem an exaggeration to say that the American public gets most of its ideas in this wholesale fashion. The mechanism by which ideas are disseminated on a large scale is propaganda, in the broad sense of an organized effort to spread a particular belief or doctrine.”
― Edward L. Bernays, Propaganda

In reply to by khnum

All Risk No Reward peddling-fiction Fri, 02/16/2018 - 17:34 Permalink

Yes, and iron toxicity ("enrichment" of Bankster Big Pharma profits!!).

And the systematic attack on ceruloplasmin (promotes iron toxicity and copper dysregulation toxicity).

And mineral depleted soils.

And mineral chelators like RoundUp (and it still chelates minerals in your liver).  Not that ATP can't be made without Mg at more than half the steps in the Krebs Cycle, and ATP can't be used by the body unless Mg is present.

And toxic medications that deplete the body of essential minerals and vitamins

“Drug Muggers” Can Slowly Steal the Life Out of You!
http://www.lifeextension.com/Magazine/2012/6/Drug-Muggers-Can-Slowly-St…

Note how your doctor will almost certainly not even mention these issues.  My friend was told to take statins (a big fat hoax of epic proportions that is trivial to expose, see below).  I was with him and asked his doctor if he should take CoQ10 with them.  She said, "no."  WOW!  He didn't take any of them at all because he researched it and figured out they are a total fraud.

What should stagger you is how trivial it was for Bankster Big Pharma to dupe the entire medical profession with such an obvious fraud.  Since they were so easily *punked* on cholesterol and statins, what else have they been punked on?

And toxic schooling where the process of learning is concealed and displaced with appeal to authority and appeal to popularity logical fallacies.

And on and on and on... pretty much everything promoted by the Supranational Money Power Mega-Corporate Fascist Global Empire is Trojan Horsed to jack up ordinary humanity.

And that's not the most surprising part to me. 

THE MOST SURPRISING PART TO ME IS THAT ORDINARY PEOPLE ARE SO PROGRAMMED AND BROKEN THAT THEY WOULDN'T HAVE IT ANY OTHER WAY...  AND WILL PROTEST AND AVOID REALITY TO THE BITTER END...  AND WITH ALL THEIR PASSIVE AGGRESSIVE ABILITY!  AND EVEN AGGRESSIVE AGGRESSIVE ABILITY.

The statin fraud exposed by PhD who researched it...

David Diamond - An Update on Demonization and Deception in Research on Saturated Fat...
https://www.youtube.com/watch?v=uc1XsO3mxX8

And he's just one resource.  Dr. Barry Sears and a host of others have debunked it, too.

In reply to by peddling-fiction

tion Slippery Slope Fri, 02/16/2018 - 12:35 Permalink

Everything begins with raw materials.  Without raw materials, value adders have nothing.  Consumers have nothing.

When the farmer, who only gets a penny for the measure of wheat in the loaf of bread on the grocery store shelf that costs between one and five dollars, needs one and a half pennies to produce the measure of wheat in the loaf of bread, what happens to the price of the loaf of bread?  If the vampiric intermediaries refuse to give the farmer enough to cover his costs and some crumb of profit for the measure of wheat in the loaf of bread that now costs him one and a half pennies to produce, what then happens to the loaf of bread?  What happens to the intermediaries?

The cheap China products with aluminum will not stay cheaper after the affected industries file petitions with the USITC.

 

In reply to by Slippery Slope

Endgame Napoleon Slippery Slope Fri, 02/16/2018 - 12:49 Permalink

I see that point, but why then was the USA at its peak of middle-class prosperity when we were the king of steel production in the post WWII era? Those steel industry jobs paid a lot, and they were not finished-goods manufacturing.

Don’t you think more high-paying steel industry jobs would boost up underemployment among males, maybe even defusing social tension and preventing tragedies, like the mass school shooting that was just carried out by an underemployed young man, living in a friend’s parents’ basement. 

He was working in a low-wage job in the service sector without a hope in the world of affording the dignity of an apartment on the rock-bottom wages unless, as a male, he got pregnant and produced a bunch of kids, staying below the earned-income limit for womb-productivity-based monthly welfare programs that cover rent and groceries and refundable, recently doubled child-tax-credit welfare at a max of $6,444. 

This society is full of social tension. Elites keep spinning it as racial, stoking factionalism to avoid the underlying economic issues.

In reply to by Slippery Slope

takeaction Cluster_Frak Fri, 02/16/2018 - 12:17 Permalink

Fair is Fair.....In Costa Rica....the government charges a huge tariff on most goods coming into the country. For example...buying a car in Costa Rica...is pure insanity.  A new Toyota FJ Cruiser that sells here in the USA for $39,000 is $80,000 in Costa Rica due to the Tariffs. Think you are going to game them??  I tried to bring a 1995 Toyota Sentra into the country.  Here in the USA value $1500.  Costa Rica has their own magical Blue Book.  They say that heap of shit car is worth $9000, so they wanted a 100% tariff to bring the car in...at $9000 + Shipping $2000 + their horse shit Mechanical Inspection $1500 on and on.  You go into Costco in Costa Rica...and want ANYTHING from around the world, say a new TV....it is close to DOUBLE normal price.  AND...get this.....they basically take away ANY warranty. And again...try brining in your own items...the magic 100% tariff comes into play.  This is a country that HATES people with money and will PUNISH you at every turn.  Sure you can buy a house cheap....and if you like rice and beans....you can eat for 25 cents a day...but any attempt to live like we do here in the USA...get ready.  This is what many countries do around the world...and it is time WE DO IT.  Fuck'em.

In reply to by Cluster_Frak

Avichi takeaction Fri, 02/16/2018 - 12:34 Permalink

You said better then any Socialist Economist would have said, these Socialist Countries included in this list of "TARIFF" were milking our "System of Free Enterprise" to their advantage and screwing us with "Inferior Products".

 

Time to SCREW THE "GLOBALIST ELITES" WORLD OF POLLYANNA SOCIALISM, LOOK AT THE VENEZUELA MADURO, he has implemented SAUL ALINSKY SOCIALISM by the BOOK

 

SCREW THEM

AMERICA COMES FIRST- AMERICAN PEOPLE COME FIRST.

In reply to by takeaction

juggalo1 Fri, 02/16/2018 - 10:58 Permalink

I'm pretty unsympathetic to metals producers.  The worst is Japan.  Why they insist on exporting so much steel, when they have to import the ore and the energy to produce it is beyond me.  If they want to subsidize it though, does it really harm the US of A?  Keep a minimal amount of capacity to assure some technical skill, and let most of the market go overseas.  If they want to give product away in exchange for our dirty paper dollars and empty promises, how does this make us poor?

TheAntiProgressive Fri, 02/16/2018 - 11:08 Permalink

Stop targeting individual items and target national labor rates.  Easy to determine and simple to de-politicise and will benefit ALL US businesses.  Maybe you can crack the monthly nut on a $9.00/day labor rate, I can't.