European Union, others exempt from tariffs on steel, aluminum,
Excluded countries accounted for half of imports to U.S. last year
The tariffs President Donald Trump is imposing on steel and aluminum imports won’t be so sweeping after all.
U.S. Trade Rep. Robert Lighthizer told members of the Senate Finance Committee on Thursday that countries in the European Union as well as South Korea, Australia, Argentina and Brazil will be exempted for the time being from the 25 percent penalties on steel imports and 10 percent penalties on aluminum imports.
Canadian and Mexican steel were excluded from the tariffs earlier. The tariffs take effect Friday. So far, countries covered by exclusions accounted for more than half of the 34.6 million metric tons of steel that the U.S. imported last year, according to the U.S. International Trade Administration.
The White House’s policy of excluding many of the major sources of steel imports is expected to blunt the impact the steel and aluminum tariffs will have on the U.S. economy. It is also expected to provide less import relief than some domestic steelmakers were expecting.
Steel stocks moved lower after the announcement, with U.S. Steel shares closing at $34.50, off $4.26 or 11 percent. The broad market was already lower because of investor fears that Mr. Trump’s plan to impose up to $60 billion in penalties on Chinese imports, announced Thursday, will elevate trade tensions and
damage the global economy.
The president of an industry and union coalition backing the steel tariffs said he was not concerned about additional companies being excluded for the time being.
“I don’t think they’re blank checks,” said Alliance for American Manufacturing president Scott Paul. “I think the administration will be expecting a lot from the countries that have at least to this point been cleared for a provisional exemption.”
Mr. Paul said penalties could be imposed on those countries in the future if they do not support U.S. efforts to get China to reduce steel and aluminum production. Steel and aluminum producers say China’s overcapacity in the two industries is a major cause of the harm that imports cause to the U.S. economy.
Meanwhile, the president of two Mercer County plants operated by Russian steel producer NLMK said his company also wants to be excluded from the penalties.
Bob Miller, president of NLMK’s Pennsylvania operations, said in an email that the company could ask the U.S. Commerce Department as early as Thursday to exclude the imported semifinished steel slabs that the company’s Farrell and Sharon plants convert to sheet steel. The import penalties jeopardize the jobs of the plants’ 800 workers, he said.
Allegheny Technologies, a Pittsburgh specialty metals producer, declined to comment on whether it will seek exemptions for stainless steel slabs that it will import from Indonesia as part of a joint venture with China’s Tsingshan Group. The joint venture is expected to create 100 jobs at Allegheny Technologies mills in Brackenridge and Midland.
In an emailed statement, Pittsburgh aluminum producer Alcoa said it supports excluding Canada and Mexico from the penalties and welcomes exclusions for countries with which the U.S. has fairtrading relationships.
U.S. Steel did not respond to a request for comments on Mr. Lighthizer’s testimony.
His comments angered Japanese steel producers. Tadaaki Yamagichi, chairman of the Japan Steel Information Center, said excluding Brazil and South Korea but not Japan “is an outrage and a travesty.”
“Our products do not harm U.S, producers because U.S. mills cannot compete with us on quality, sophistication, durability and reliability,” he said in a statement.
Mr. Trump announced the steel and aluminum tariffs March 8, invoking a seldom used federal law that gives the White House authority to impose penalties on imports if they threaten national security. Based on his order, the Commerce Department is allowing U.S. individuals and companies to seek exclusions from the penalties.
The agency began accepting such requests Monday.
Once an exclusion request is made public, other parties have 30 days to object. The Commerce Department is expected to take 60 days after that to make a decision.
The agency is expected to be deluged with requests. Harbor Aluminum, an Austin, Texas, research firm, said countries that could be excluded from penalties on aluminum imports include the United Arab Emirates, Australia, India, Japan, Argentina and Brazil.