R Street Disappointed by Commerce Department's Steel Imports Report



Wall Street is already handing out verdicts on who will win and who will lose if President Trump follows the Commerce Department's recommendations to impose heavy tariffs on steel and aluminum imports.

Commerce Secretary Wilbur Ross has scheduled a briefing with reporters today.

The report also recommends similar restrictions on aluminum imports with options of a 7.7% tariff on global imports; a 23.6% tariff on China, Hong Kong, Russia, Venezuela and Vietnam with a quota; or a quota for all countries equaling 86.7% of their 2017 exports to the US.

The report found that USA reliance on foreign-produced steel and aluminum, which is often government subsidized, could compromise national security because those products have crucial military uses.

Trump has until around April 11 to decide whether to impose steel import curbs and April 20 to decide on aluminum restrictions.

The goal of these tariffs would be to increase domestic production of steel and grow the U.S. steel workforce.

Century Aluminum Company owns primary aluminum capacity in the United States and Iceland.

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Nucor, the largest U.S. steel maker, climbed 4%, while U.S. Steel and AK Steel soared more than 10% apiece.

Trump met a bipartisan group of U.S. senators and representatives at the White House last week, signalling he would take at least some action to restrict imports of the two metals. The American Automotive Policy Council, a Washington-based trade group that represents GM, Ford and Fiat Chrysler Automobiles NV, warned in May that import restrictions would hurt the vehicle industry and its workers.

In a statement in response to the Commerce report, the group continued to stress that it believes any action should address Chinese overcapacity, not interfere with trading relationships between the USA and countries such as Canada and the European Union, and avoid unintended consequences for USA production and jobs, including for the downstream industry. Trump take action based on the recommendations he receives, or he may opt not to take any action. China is by far the largest producer and exporter of steel, and the largest source of excess steel capacity.

Ross said excessive steel and aluminum imports "threaten to impair the national security", in a 262-page investigative report released Friday.

According to the Aluminum Association, there are five USA smelting facilities that are operating with three partial curtailments.

"Aluminum used to make beer cans is not a national security threat".

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.

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