Commerce Dept. recommends tariffs on imported aluminum and steel

WASHINGTON — Imported aluminum and steel threaten U.S. national security, the Commerce Department said Friday, urging President Donald Trump to impose tariffs or quotas to boost American production.

The recommendations unveiled by Secretary Wilbur Ross are likely to escalate tensions with China and other U.S. trading partners. Stepped-up production of steel and aluminum, especially by China, has driven down prices and hurt American producers. 

"China is by far the largest producer and exporter of steel, and the largest source of excess steel capacity," the Commerce Department said in a news release. "Their excess capacity alone exceeds the total U.S. steel-making capacity."

The agency is recommending either a tariff of 24 percent on all steel and aluminum imports; higher tariffs on imports from specific countries or a quota on imports. 

The measures are meant to increase U.S. production to 80 percent of capacity in both industries. U.S. steel plants are running at 73 percent of capacity and aluminum plants at 48 percent.

Mr. Trump has until April 11 to make a decision on aluminum and until April 19 to decide on steel.

Last year, the president ordered an investigation into whether aluminum and steel imports posed a threat to national defense. On Friday, Ross said: "In each case, the imports threaten to impair our national security."

Ross is offering the president three options:

  • Impose tariffs of 24 percent on all steel and 7.7 percent on aluminum imports from all countries.
  • Impose tariffs of 53 percent on steel imports from 12 countries, including Brazil, China and Russia, and tariffs of 23.6 percent on aluminum imports from China, Hong Kong, Russia, Venezuela and Vietnam. Under this option, the United States would also impose a quota limiting all other countries to the aluminum and steel they exported to the United States last year.
  • Impose a quota on steel and aluminum imports from everywhere, limiting each country 63 percent of the steel and 86.7 percent of the aluminum they shipped to the U.S. last year.

Section 232 of the Trade Expansion Act of 1962 gives the president the power to restrict imports and impose unlimited tariffs if a Commerce Department investigation finds they threaten national security.

Since the United States joined the World Trade Organization in 1995, it has only pursued two such investigations. Both times - in a 1999 case involving oil imports and a 2001 case involving iron ore and steel imports - the Commerce Department refused to recommend sanctions.

Critics fear that other countries will retaliate or use national security as a pretext to impose trade sanctions of their own.

China this week appealed to President Trump to settle the steel and aluminum disputes through negotiation. Chinese Foreign Ministry spokesman Geng Shuang said Wednesday that all governments should "spare no effort to avoid negative impacts" on the global economy.

The Trump administration is also considering imposing sanctions against China for forcing American companies to share their intellectual property and stealing trade secrets.