US eyes 24pc tariffs on China and Russia to counter steel and aluminium glut

PUBLISHED : Saturday, 17 February, 2018, 1:56am
UPDATED : Friday, 23 March, 2018, 12:05pm

The US Commerce Department has recommended imposing tariffs on China, Russia and other countries to counter a global glut in steel and aluminium which it says threatens national security.

In a report to US President Donald Trump, Commerce Secretary Wilbur Ross includes among the options a nearly 24 per cent tariff on all products from China, Russia, Hong Kong, Vietnam and Venezuela.

Other options would impose high tariffs or quotas on steel and aluminium imports.

News of the move pushed steel stocks up on Friday morning, with US Steep up 8.5 per cent, AK Steel up 9.1 per cent, and Nucor gaining 4.2 per cent. The S&P 1500 steel index was up 4.2 per cent

The department said Ross will not announce Trump’s decision on how to deal with the surge in steel and aluminium imports, which US producers have said are unfairly hurting them.

Trump was presented with reports last month following parallel “Section 232” investigations into whether import restrictions on steel and aluminium are needed to protect national security.

The investigations were authorised in April last year under a 1962 trade law that has not been invoked since 2001.

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Trump met a bipartisan group of US senators and representatives at the White House last week, signalling he would take at least some action to restrict imports of the two metals.

“What we’re talking about is tariffs and or quotas,” Trump told the group.

“Part of the options would be tariffs coming in. As they dump steel, they pay tariffs, substantial tariffs, which means the United States would actually make a lot of money.”

Trump has until around April 11 to decide whether to impose steel import curbs and April 20 to decide on aluminium restrictions. 

Some lawmakers and steel and aluminium users have urged caution in any restrictions to avoid disruptions or price spikes in the raw materials, used in everything from autos to appliances and aircraft and construction.

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Investors have been closely watching for potential protective measures for the industry since Trump’s November 2016 election win, with stocks often rising or falling along with prospects for such actions.

Since Trump’s election, the steel index has gone up about 47 per cent, along with a 28 per cent rise for the overall S&P 500.