Commerce Department Recommended Steep Tariffs or Quotas on Steel and Aluminum

Published on: 20 Feb, 2018

The recommendation of imposing heavy tariffs or quotas on foreign producers of steel and aluminum, and investigating imports in the interest of national security, was made by the Commerce Department on Friday (Feb. 16).

President Donald Trump and his administration announced the investigation into steel and aluminum importation in April, to see if the imports posed a threat to the country’s national security.

U.S. steel stocks started to decline immediately after the Commerce Department report.

There is no doubt that overcapacity of steel is existing in the world. “China is the culprit, China is the country that causes the most overcapacity.” Said Max Baucus, the former U.S. ambassador to China, to CNBC.

Steel and aluminum are widely used in industrial applications including cars and infrastructure, and the U.S. is the world’s largest steel importing country. The top exporter shipping steel into the U.S. is Canada, and other exporters are American allies such as South Korea and Japan. According to the Commerce Department, however, China was not among the top 10 sources during January to September 2017.

South Korea’s trade ministry has said in a statement that it had met with executives from steelmakers, and agreed to make outreach efforts until Washington reaches a final decision. In addition, Seoul also plans to take a dispute to the World Trade Organization against the United States for imposing high anti-dumping duties in the country’s steel products in 2016.

Of course President Trump could determine that certain countries could be exempted from the proposed quotas or tariff, based on the economic or security interests of the United States.


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