Defying threats of retaliation from the Chinese, Bloomberg reports that President Trump is pushing for a global tariff of 24% on all steel imports, a decision that will anger nearly every industrial manufacturer based in the US, while at the same time helping revive the fortunes of US steel producers.
The rates were first proposed by Commerce Secretary Wilbur Ross last week.
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.
It also recommended several options, of which Trump now reportedly supports the stiffest.
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.
Anticipating the administration's support, six free trade advocacy groups sent an open letter to Trump on Thursday urging him not to impose the steel and aluminum tariffs. They also said the national security argument advanced by the Commerce Department wasn't credible.
"The national security case to restrict steel and aluminum imports is thin and the toll such restrictions would take on the economy is considerable," the letter said, adding that a thorough assessment of America's suppliers, treaties and other agreements "makes clear that steel and aluminum imports do not jeopardize national security."
Reports that Trump favors the stiffest tariffs recommended by the Commerce Department sent shares of steel producers soared in after hours trading:
The report followed a press conference Friday afternoon with Australian Prime Minister Malcolm Turnbull. The two men commented on trade issues, with Trump emphasizing that he prefers bilateral trade deals while bashing China for taking advantage of the US on trade.
Earlier this year, Trump slapped a 30% tariff on solar panel imports. And he's also approved a massive nearly 300% tariff on the Bombardier C-Series jet.