Other countries would be subject to a quota limiting their tariff-free access equal to their 2017 steel exports to the United States. Stepped-up foreign production of steel and aluminum, especially by China, has driven down prices and hurt American producers.
The President is required to make a decision on the steel recommendations by April 11, 2018, and on the aluminum recommendations by April 19, 2018. U.S. Steel and AK Steel spiked 10%, while Alcoa rallied 3% and Century Aluminum climbed 7%. Such measures would encourage steel and aluminum producers to come back to the USA, he said.
The reports are now under consideration by the President, and no final decisions have been made with regard to their contents.
The measures would cover not only finished products but also semifinished goods such as blooms, billets and slabs, Ross told American Metal Market during a conference call with reporters on Friday February 16. More than two dozen USA steel and steel-related companies and associations wrote Trump a letter on February 2 urging "strong action" to support domestic steel. Our imports are almost four times our exports.
Department's goal is to increase demand for American-made metals. "Adopting any of these recommendations would create uncertainty of supply for all users, limit growth, and put aluminum products like cansheet at risk".
The measures would be in addition to any duties now in place. "There is a higher level of precision needed than a blanket tariff because depending on the product spread, it could for instance knock out one product, and do little to nothing for another". America now imports 90 percent of its primary aluminum.
The department notes that employment in the aluminum industry fell by 58 percent between 2013 and 2016, while employment in the steel industry dropped 35 percent in the last 20 years. And only one company in the country produces the high-quality aluminum alloy used for military aerospace purposes. Aluminum is vital to our national security.
Commerce noted that as of Thursday, the USA had two antidumping and countervailing duty orders in place on aluminum, both against China, and there are four ongoing investigations against China. Market participants want to know what the remedy will be because the uncertainty surrounding the outcome of the investigations has made it hard to make business decisions. These would cover both aluminum ingots and a wide variety of aluminum products. The department also proposed an aluminum quota of 86.7 percent of 2017 exports, they said, requesting anonymity because the recommendations aren't public. Ross also suggested a 23.5% tariff on aluminum products from China, Hong Kong, Russia, Venezuela and Vietnam.
Each of the three proposals is meant to raise production of aluminum from the present 48% average capacity to 80%, a level that would provide the industry with long-term viability.