White House offers alternatives aimed at curbing imports

Analysis triggered by seldom-used 1962 law

Pittsburgh Post-Gazette

U.S. Department of Commerce Secretary Wilbur Ross on Friday outlined three courses of action the agency has recommended to President Donald Trump for targeting steel and aluminum imports that threaten national security.

The recommendations — which range from applying penalties on all imports to imposing import quotas on all countries — are designed to enable domestic steel and aluminum producers to operate at 80 percent of capacity, a level necessary to make each industry viable, Mr. Ross said.

The Commerce Department submitted the recommendation to Mr. Trump in January.

The analysis was triggered by a seldom-used 1962 law that permits the White House to take action in cases where imports endanger national security.

The law requires Mr. Trump to make a decision on what to do about steel imports by April 11 and on aluminum imports no later than April 19.

U.S. steel producers hailed the recommendations, saying the actions would provide import relief the industry sorely needs.

Manufacturers who rely on imports to manufacture products or supply domestic steel users say the sanctions would make them less competitive and threaten jobs in those industries.

Steel stocks jumped on the news, with U.S. Steel shares closing at $44.75, up $5.76.

Mr. Ross cited the closure of 10 domestic steelmaking furnaces since 2000 and a 35 percent drop in industry employment since 1998 as a justification for findings that the nation needs a more viable steel industry.

The report targeted China as the largest reason for a 700-million ton excess of global steelmaking capacity. China makes nearly as much steel in the average month as U.S. producers make in a year, he said. Of the 169 cases where the U.S. government has placed penalties on unfair imports, 29 of them involve China, the report stated.

On the aluminum end, the agency’s report notes six U.S. smelters have closed since 2013 and only two of the five remaining ones are operating at capacity. Employment in the industry has dropped 58 percent over that period.

Mr. Ross’ report recommended three alternatives for curbing steel imports: a 24 percent tariff on all imports; penalties of at least 53 percent on imports from China, Russia and 10 other countries, and limiting imports from other countries to 100 percent of their 2017 shipments; or quotas on all countries that would limit shipments to 63 percent of 2017 levels.

Mr. Trump could accept the recommendations as is, modify them, or take no action at all.

The latter is unlikely given Mr. Trump’s campaign promises and remarks he made earlier this week.

The Steel Manufacturers Association said the recommendations “have the potential to be meaningful and effective to address the threat the industry faces in light of global excess capacity and relentless steel imports.”

The agency’s recommendations “would curtail widespread dumping by China and other foreign competitors,” according to Todd Leebow, president and CEO of Majestic Steel USA, a Cleveland steel processor and distributor.

A spokesman for a Japanese steel group opposed the proposals.

“The ultimate imposition of this naive regime would be a disaster for American manufacturing and the good, well-paying jobs it supports,” Japan Steel Information Center chairman Tadaaki Yamaguchi said in a statement.

Industry groups representing the tooling and metalforming industries said the sanctions would threaten steel consuming companies that employ 6.5 million Americans to cater to the 80,000 workers employed by U.S. steel producers.

“The last time the U.S. imposed steel tariffs in 2002, more than 200,000 American jobs were lost because of high steel prices due in large part to the tariffs,” their joint statement said.