Trade Cases

Commerce Recommends Section 232 Tariffs/Quotas on Steel Imports

February 18, 2018

In a press conference on Friday, Commerce Secretary Wilbur Ross said his Section 232 investigation has concluded that steel imports do pose a significant threat to U.S. national security and he is recommending three possible remedies to President Trump that call for tariffs or quotas on foreign steel.

Those alternatives include:

A global tariff of at least 24 percent on all steel imports from all countries, or
A tariff of at least 53 percent on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100 percent of their 2017 exports to the United States, or
A quota on all steel products from all countries equal to 63 percent of each country’s 2017 exports to the United States.

Each of these remedies is intended to increase domestic steel production from its present 73 percent of capacity to approximately an 80 percent operating rate, considered to be the minimum rate needed for the long-term viability of the industry. Each remedy applies measures to all countries and all steel products to prevent circumvention, Ross said.

The tariffs and quotas would be in addition to any duties already in place. The report recommends that a process be put in place to allow the secretary to grant requests from U.S. companies to exclude specific products if the U.S. lacks sufficient domestic capacity or for national security considerations.

Responding to reporters’ questions, Ross acknowledged there is no language in the Commerce recommendations that would specifically exclude Canada or Mexico from trade action. But the president could opt to give special consideration to the NAFTA trading partners.

Ross said he would not be surprised if Section 232 is challenged in court, or by other World Trade Organization members, “but we believe this is a perfectly valid interpretation of national security” allowed under a WTO exception.

He downplayed the potential for steel tariffs to raise the price of consumer goods, using automotive as an example. Steel represents a small portion of the cost of a car, and the small percentage increase a tariff might cause would have little effect on the final price tag of the vehicle, he said.

He declined more than once to predict what President Trump may do with the Commerce Department’s recommendations. “He is the sole judge of that; it is not for me to speculate. He is not bound by these exact recommendations. He could do something totally different or do nothing if he so chooses,” Ross said.