Trade Cases

Trump to Finally Act on 232, Plans 25% Tariff on Steel

Written by Tim Triplett

President Trump says he will sign a measure next week calling for a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports under Section 232 because they pose a threat to the domestic industries and thus national security.

Trump had looked set to make the trade action official today, even calling industry executives to a meeting at the White House, but reportedly delayed the action amid disagreement with his trade advisors.

Steel executives meeting with the president expressed the expected support. “We have to get this done,” said David Burritt, U.S. Steel President and CEO. “As someone with global views who believes in fair trade, we know when it’s completely unfair. We are not protectionists. We want a level playing field for our employees and customers. It’s time for the Whack-a-Mole game [of transshipments] to end. It’s time for some fairness. It’s past time.”

“We believe very strongly that it’s time for decisive and meaningful action to stem the flow of illegally traded imports into this country. And we are counting on the administration to fulfill the promises that were made and to give us that level playing field to compete. What we are asking for today is fast action and action that will last, said John Ferriola, chairman, president and CEO of Nucor.

Asked about the tariffs, President Trump stated: “It’s 25 percent for steel. It will be 10 percent for aluminum. And it will be for a long period of time,” but he offered no other detail, leaving it unclear at this point whether the 25 percent duties will be on all steel imports or just those from certain countries. Among the three options recommended by the Commerce Department in its Section 232 report was a 24 percent global tariff.

The announcement of Trump’s intentions raised cries of alarm from manufacturing interests that have been warning of the likely harmful effects of higher steel prices on the U.S. economy.

The Precision Metalforming Association and the National Tooling and Machining Association issued a joint statement opposing the tariff: “The steep tariffs on steel and aluminum that President Trump announced will be imposed next week imperils the U.S. manufacturing sector, and particularly downstream U.S. steel and aluminum consuming companies. The tariffs will lead to the U.S. once again becoming an island of high steel prices resulting in our customers simply importing the finished part. The lost business to overseas competitors will threaten thousands of jobs across the United States in the steel consuming manufacturing sector, similar to our experience in 2002 when the U.S. last imposed tariffs on steel imports. Those “201” steel tariffs resulted in the loss of 200,000 American manufacturing jobs (more than employed by the entire domestic steel industry) because of high steel prices due in large part to the tariffs. President Trump campaigned on the promise to protect manufacturing jobs but by ignoring warnings from a wide range of manufacturers, his plan to impose tariffs will cost manufacturing jobs across the country.”

The Alliance for American Manufacturing, on the other hand, expressed support for Trump’s tariffs. “We’re on the brink of a potentially historic rebalance of America’s trade priorities. We are confident a robust steel trade action is good for our economy. A decision to restore sanity to global steel markets will help create domestic jobs and preserve our national security,” said AAM President Scott Paul.

The president’s support is mixed even among members of his own party. Senator Sherrod Brown (D-OH) said: “This welcome action is long overdue for shuttered steel plants across Ohio and steelworkers who live in fear that their jobs will be the next victims of Chinese cheating. President Trump must follow through on his commitment to save American steel jobs and stop Chinese steel overcapacity from continuing to infect global markets. If we fail to stand up for steel jobs today, China will come after other jobs up and down the supply chain tomorrow.”

But Nebraska Senator Ben Sasse commented in a statement: “Let’s be clear: The president is proposing a massive tax increase on American families. Protectionism is weak, not strong. You’d expect a policy this bad from a leftist administration, not a supposedly Republican one.”

President Trump will be imposing tariffs against the recommendations of some of his top advisors, including his chief of staff, defense secretary and national security adviser. The Defense Department has even expressed concern about how such trade action will affect key allies.

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