Congressman Rick Nolan

Representing the 8th District of Minnesota
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U.S. moving to impose tariffs on imported steel

Feb 21, 2018
In The News

In a move that should help bolster U.S. steelmakers and the Minnesota taconite iron ore mines that supply them, the U.S. Commerce Department on Friday called for steep tariffs on all steel shipments coming into the U.S.

Commerce Secretary Wilbur Ross announced the steel tariffs along with a duty on aluminum imports.

President Donald Trump, who asked for a plan to thwart foreign imports, is expected to decide on the details by April.

The move comes after domestic producers cried foul over what they call illegal steel "dumping'' into the U.S. — foreign-made steel subsidized by foreign governments and sold here at below cost.

Trump instructed the Commerce Department last year to probe whether imports of steel and aluminum represent a threat to U.S. national security under Section 232 of the Trade Expansion Act of 1962.

Minnesota Sens. Amy Klobuchar and Tina Smith and Rep. Rick Nolan have been calling for Sec. 232 action for months.

"In the interest of our nation's steel industry and the jobs it supports, we urge you to take swift and decisive action in response to the Department of Commerce findings in its Section 232 investigation,'' the lawmakers wrote to Trump in a letter last month.

But imposing tariffs on such widely used commodities may trigger retaliatory measures from China, the world's biggest producer of steel and aluminum. It could also increase manufacturing and consumer prices in the U.S., and inflame tensions with allies such as Japan, India, Germany and Canada. Several nations have warned that steel tariffs could set off a trade war.

Ross also outlined the following alternatives for the president to consider:

• A global 24 percent tariff on all imported steel and 7.7 percent on aluminum.

• At least a 53 percent tariff on steel imports from Brazil, China, Costa Rica, Egypt, India, Malaysia, Korea, Russia, South Africa, Thailand, Turkey, Vietnam, with a quota by product on steel imports from all other countries equal to 100 percent of their 2017 exports to the U.S.

• A quota on steel imports from all countries up to 63 percent of their 2017 exports to the U.S.

• For aluminum, a 23.6 percent tariff on metal when it comes from China, Russia, Venezuela and Vietnam and Hong Kong.

• An aluminum quota of 86.7 percent of 2017 exports.

The recommendations come less than a month after the Trump administration imposed tariffs on foreign solar panels and washing machines.

Trump is facing resistance to tariffs from lawmakers in his own party. At a meeting earlier this week at the White House, at least seven Republican lawmakers argued against any action that might set off a tit-for-tat response from China or other countries.

But Trump said the U.S. steel and aluminum industries "are being decimated by dumping and from many countries." The administration is now considering "all options, and part of the options would be tariffs," he told lawmakers at the meeting. That should encourage steel and aluminum producers to come back to the U.S., he said. Some companies in the steel industry, as well as unions such as United Steelworkers, have been pushing the president to come down hard on imports.

Experts agree China sells steel in the United States at unfairly low prices, because it can produce industrial steel on the cheap. Hundreds of U.S. sanctions, including several by the Obama administration, have helped reduce Chinese steel imports in recent years. China is no longer among the top 10 steel exporters to the U.S., although officials say China appears to be shipping its steel through Vietnam, although Vietnam isn't in the top 10 either. Canada, Brazil, South Korea, Mexico and Russia are the top steel exporters to the U.S.

Speculation about possible U.S. action has roiled the metals industry. Imports of steel increased last year on anticipation that new tariffs would elevate costs. On Friday shares of most U.S.-based steel and aluminum producers jumped, some with double digit increases.