Trump Undecided on Steel Tariffs as Trade-War Worries Mount
President Donald Trump hasn’t decided yet whether to impose punitive measures on steel imports for reasons of national security, as the administration missed a self-imposed deadline to conclude its investigation by Friday.
While the Commerce Department has until early next year to determine whether foreign-made steel threatens U.S. security under Section 232 of the Trade Expansion Act, Secretary Wilbur Ross wants a speedy probe that he hoped to be concluded by the end of June.
The president hasn’t made up his mind yet on the tariffs issue, White House spokeswoman Sarah Huckabee Sanders said at a media briefing in Washington on Friday. A finding by Commerce that steel imports pose a security risk, including to the defense industrial base, could lead Trump to impose tariffs, quotas, or a combination of the two.
The prospect of slapping tariffs on steel imports has raised concerns about sparking a trade spat with some of America’s strongest allies, which supply the abundance of U.S. steel imports. It could also raise prices for U.S. steel users that would make them less globally competitive. The U.S. benchmark price for steel rose 55 percent last year after a slate of successful trade cases levied anti-dumping and countervailing duties on the metal.
“Retaliation is one of the risks to this whole story,” Christopher Olin, a senior analyst at Longbow Research, said by phone. For consumers it could lead to “a much higher cost perspective. You’re going to raise the price of steel” and that will increase pressure on the major buyers of steel in North America, Olin said.
Any attempt by the White House to unilaterally impose tariffs wouldn’t have the support of congressional Republican leaders, according to a former GOP leadership aide.
‘Hell-Bent’
But Trump and some top advisers are “hell-bent” on imposing tariffs on steel imports, according to a report by Axios, an online publication. Trump is leaning toward supporting tariffs that could be in the 20 percent range, despite opposition from nearly all of his cabinet, Axios said, citing unnamed administration sources.
Ross complained about steel imports as recently as Friday morning, accusing China of dumping its steel which sometimes finds its way via other markets to the U.S.
Shares of American steelmakers reacted to speculation that tariffs would boost domestic prices. Nucor Corp., the biggest U.S. steelmaker, rose as much as 1.6 percent, while U.S. Steel Corp. rose to an intraday peak of 3.3 percent, before declining.
Any tariffs would put pressure on the U.S. market, which is a net importer of steel. Trump promised during his election campaign to help revive America’s steel sector and said the U.S. can’t take chances by relying on imports of the metal for reasons of national and economic security.
Canada, South Korea and Brazil are the biggest sellers of steel to the U.S. Prime Minister Justin Trudeau said this week that Canada is a trusted trading and defense partner with the U.S. and called the idea that Canadian steel shipments threaten U.S. security “silly.”
Low End
The real target of tariffs could be China, considered the source of many of the world’s steel woes because of its huge excess capacity. U.S. imports from China have plunged in the past few years because of duties imposed by Washington, and the Asian nation only supplies about 4 percent of total imports.
When the Section 232 investigation was launched in April, Ross argued that China had failed to deliver on promises to reduce excess steel capacity, a situation that he said was hurting the U.S. steel industry. China has noted that its shipments to the U.S. are low-end products that local companies aren’t willing to make.
Trump will discuss U.S. trade policy at the Group of 20 summit in Hamburg next week, White House economic adviser Gary Cohn said on Thursday.
“On trade, no less than on alliances, America First does not mean America alone,” Cohn said. “We ask the G-20 economies to join us in this effort and to take concrete actions to solve these problems. But let us be clear: We will act to ensure a level playing field for all.”
Follow us on social media: