On March 1, 2018, President Trump hosted a “listening session with representatives from the steel and aluminum industry.” During the session, representatives of the steel and aluminum industries complained about the unfair playing field and indicated that tariffs would level the playing field. The President agreed and stated that the work will be completed “next week” on imposing tariffs on steel and aluminum imports. In response to a question from the press, he indicated that the “long term” tariffs would be 25% for steel and 10% for aluminum.
The announcement was apparently made before the legal review of the recent reports from Commerce had been completed and without advance notice to some of his own staff and Congress, many of whom are afraid of a trade war. The announcement sent the stock market down and immediately drew threats of retaliation from European and Asian trading partners who vowed to retaliate with higher tariffs on U.S. products. The announcement sent the stock market down and immediately drew threats of retaliation from European and Asian trading partners who vowed to retaliate with higher tariffs on U.S. products. It should be noted that this was not an official announcement and the actual document that is finally issued may reflect different terms, since Commerce recommended several alternatives.
The Commerce report with recommendations was released on February 16, 2018 (unclassified versions of the reports are available here). In each case, the Department of Commerce concluded that the quantities and circumstances surrounding steel and aluminum imports “threaten to impair the national security,” thereby opening the door to the imposition of import restraints. Specifically, Commerce’s recommendations are as follows:
Steel – Alternative Remedies
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.
The measures would apply to steel mill products classified in subheadings 7206.10 through 7216.50, 7216.99 through 7301.10, 7302.10, 7302.40 through 7302.90, and 7304.10 through 7306.90.
Aluminum – Alternative Remedies
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.
These measures would apply to unwrought aluminum (heading 7601), aluminum castings and forgings (subheadings 76220.127.116.11 and 7618.104.22.168), aluminum plat, sheet, strip and foil (flat rolled products) (headings 7606 and 7607); aluminum wire (heading 7605); aluminum bars, rods and profiles (heading 7604); aluminum tubes and pipes (heading 7608); and aluminum tube and pipe fittings (heading 7609).
The goal of such measures is to all U.S. aluminum and steel producers to utilize 80% of production of capacity.
The recommendation also includes a process to allow Commerce to grant requests from U.S. companies for specific product exclusions if there was insufficient domestic production, or for national security considerations.