US Commerce Secretary Wilbur Ross said President Donald Trump and his administration are considering massive across-the-board tariffs and restrictive quotas following the department's Section 232 investigations into steel and aluminium imports.
The measures would cover not only finished products but also semifinished goods such as blooms, billets and slabs, Ross told American Metal Market during a conference call with reporters on Friday February 16.
Ross said there was no timeline for how long the measures might remain in place, if implemented. And he declined to speculate on what action the president might take.
“He is the sole judge to that. ... And he will decide what he's going to do. It’s not for me to speculate what action he might take," Ross said. He noted that the president could modify the recommendations or even choose to take no action at all.
The secretary outlined three potential measures aimed at limiting steel and aluminium imports on national security grounds: a blanket tariff, targeted tariffs and quotas, or blanket quotas.
On the steel side, they include:
- A global tariff of at least 24% on steel imports from all countries
- A more targeted tariff of at least 53% on steel imports from 12 countries - Brazil, China, Costa Rica, Egypt, India, Malaysia, South Korea, Russia, South Africa, Thailand, Turkey and Vietnam; and a quota on all countries equal to their 2017 exports to the US
The US imported 34.5 million tonnes of steel in 2016, according to Commerce Department figures. Of that amount, 63% would equal 21.7 million tonnes. Import levels have not been that low since the US imported approximately 21.7 million tonnes in 2010 following the 2008-2009 recession.
- A quota on steel imports from all countries equal to 63% of their total exports to the US in 2017
On the aluminium side, Ross recommended:
- A tariff of at least 7.7% on all aluminium imports
- A tariff of 23.6% on aluminium imports from China, Hong Kong, Russia, Venezuela and Vietnam, with all other countries subject to export quotas equal to their 2017 shipments to the US
Since last year, Section 232 remedies have been rumored to include a mix of tariffs and quotas.
- A blanket quota on all countries equal to 86.7% of their 2017 aluminium shipments to the US
Trump has until April 11 to decide which course of action to take in the steel investigation and until April 19 to decide on a remedy in the aluminium probe, Ross said. The goal of the measures is to return each industry to a capacity utilization rate of approximately 80%, he said.
Commerce initiated the Section 232 investigations in April 2017. The steel industry has urged the president to take swift action.
The steel and aluminium industries have been fixated on the cases for nearly a year. Market participants want to know what the remedy will be because the uncertainty surrounding the outcome of the investigations has made it difficult to make business decisions.
Ross noted that individual companies could request exemption for specific products. He also acknowledged that the measures could invite retaliation from other countries, including challenges at the World Trade Organization.
The blanket options do not exclude exemptions for the United States' North American Free Trade Agreement partners - Canada and Mexico - or its North Atlantic Treaty Organization allies. The targeted measures would hit Turkey, which is a NATO ally.