WASHINGTON -- The U.S. Commerce Department on Friday recommended that President Donald Trump impose a range of tariffs and quotas on imported aluminum and steel.
In a briefing with reporters over the results of his department’s investigation, Commerce Secretary Wilbur Ross proposed a 24 percent global tariff on steel shipments coming into the U.S. and a 7.7 percent duty on aluminum imports. Trump has the latitude to choose between these types of options or even enter talks with producers to find solutions.
Shares in Ford Motor Co. and General Motors fell on the news. GM dropped 1.8 percent to close at $41.09 while Ford slipped 1.4 percent to $10.61.
Expectations for pricier raw materials contributed to Ford’s forecast in January that profit will decline this year. The automaker made a big bet a few years ago on aluminum by choosing to use the lighter-weight metal for the bodies of its lucrative F-series pickups and biggest SUVs. GM has projected 2018 adjusted earnings per share will be in line with last year’s result.
Trump instructed the Commerce Department last year to probe whether imports of steel and aluminum represent a threat to U.S. national security. The investigation took place under the seldom-used Section 232 of the Trade Expansion Act of 1962. Ross last month submitted his department’s final reports to Trump on steel and aluminum. The president now has until about mid-April to decide on any potential action.
Imposing tariffs on such widely used commodities may trigger retaliatory measures from China, the world’s biggest producer of steel and aluminum. It could also inflate manufacturing and consumer prices in the U.S., and inflame tensions with allies such as Japan, India, Germany and Canada. Group of 20 economies have pushed back against the threat of steel tariffs, warning that such a move could set off a trade war.
Ross also outlined the following alternatives for the president to consider:
-- At least a 53 percent tariff on steel imports from Brazil, China, Costa Rica, Egypt, India, Malaysia, Korea, Russia, South Africa, Thailand, Turkey and Vietnam with a quota by product on steel imports from all other countries equal to 100 percent of their 2017 exports to the U.S.
-- Quota on steel imports from all countries up to 63 percent of their 2017 exports to the U.S.
-- For aluminum, a 23.6 percent tariff on metal when it comes from China, Russia, Venezuela, Vietnam and Hong Kong.
-- An aluminum quota of 86.7 percent of 2017 exports.
Trump is facing resistance to tariffs from lawmakers in his own party. At a meeting this week at the White House, at least seven Republican lawmakers argued against any action that might set off a tit-for-tat response from China or other countries.
Trump said the U.S. steel and aluminum industries “are being decimated by dumping and from many countries.” The administration is now considering “all options, and part of the options would be tariffs,” he told lawmakers at the meeting. Such measures would encourage steel and aluminum producers to come back to the U.S., he said. Some companies in the steel industry, as well as unions such as United Steelworkers, have been pushing the president to come down hard on imports.
Speculation about possible U.S. action has roiled the metals industry. Imports of steel increased last year on anticipation that new tariffs would elevate costs.