You are here

UPDATE 4-Trump weighs tariffs, quotas on U.S. steel, aluminum imports

(Adds Chinese Foreign Ministry comment)

By Roberta Rampton and David Lawder

WASHINGTON, Feb 13 (Reuters) - U.S. President Donald Trump
said on Tuesday he was considering a range of options to address
steel and aluminum imports that he said were unfairly hurting
U.S. producers, including tariffs and quotas.

Trump's comments - his strongest signal in months that he
will take at least some action to restrict imports of the two
metals - came in a meeting with a bipartisan group of U.S.
senators and representatives at the White House. Reporters were
present for part of the meeting.

Some of the lawmakers urged him to act decisively to save
steel and aluminum plants in their states, but others urged
caution because higher prices would hurt downstream
manufacturers that consume steel and aluminum.

Trump is weighing options presented last month by the U.S.
Commerce Department in parallel "Section 232" investigations
into whether import restrictions on steel and aluminum are
needed to protect national security. The probes were authorized
under a 1962 trade law that has not been invoked since 2001.

"What we're talking about is tariffs and/or quotas," Trump
said to 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 said that the steel and aluminum industries were being
"decimated by dumping" and talked about the empty steel mills
he saw on the campaign trail in 2016.

"I look at it two ways: I want to keep prices down, but I
also want to make sure that we have a steel industry and an
aluminum industry, and we do need that for national defense,"
Trump said.

U.S. steel stocks rose broadly after the comments, with the
S&P 1500 steel index closing up 1.1 percent and
outperforming the broader market. Alcoa Inc shares ended
1.4 percent higher, with Century Aluminum up 0.5 percent.

Trump now has until around April 11 to decide whether to
impose steel import curbs and April 20 to decide on aluminum
restrictions. The Commerce Department has not revealed its
recommendations in the probes launched last spring.

But Commerce Secretary Wilbur Ross told the lawmakers that
Section 232 powers "can be applied in a much more surgical way"
that could lead to tariffs on imports from certain countries and
quotas from other nations suspected of transshipping products.

Some lawmakers came away from the meeting with the
impression that Trump would impose some restrictions but
understood the need for a balanced approach.

"My belief is he'll take some action, but he was truly open
to seeking input at the meeting today," Senator Roy Blunt, a
Missouri Republican, told reporters at the Capitol.

Blunt, who said Missouri industries both make and consume
steel and aluminum, told Trump in the meeting: "I think we do
need to be careful here that we don't start a reciprocal battle
on tariffs."

STEEL USED IN ENERGY INDUSTRIES

Several lawmakers cited the need to maintain U.S. energy
independence and the electrical grid. They urged steps to
protect U.S. producers of oil drilling and transport pipe and
noted AK Steel is the last American producer of
electrical steel for electric transformers.

Senator Rob Portman, a Republican from steel-intensive Ohio,
told Trump that without relief from imports, AK Steel is "going
to pull out of this business, so we won't have the steel that
goes into our transformers and our grid."

Republican Senator Pat Toomey of Pennsylvania cautioned that
it would be difficult for Trump to justify a national security
ruling when defense products consume only 3 percent of domestic
steel output.

"So I think it's implausible to believe that we're not able
to meet the needs of our defense industry, which is absolutely
essential," he said.

Steelmakers recently urged Trump to take broad action to
reduce steel imports to curb global excess steel production
capacity, largely in China..

Asked about Trump's steel comments, Chinese Foreign Ministry
spokesman Geng Shuang said the world economy was recovering and
all parties should cherish the momentum and send signals of
cooperation and mutual benefit.

At this time, any unilateral or protectionist moves would
harm countries and damage the trade environment, Geng told
reporters in Beijing.

"All parties should make an all-out effort to avoid this."

A Chinese government think-tank warned earlier that
"unreasonable" U.S. trade actions on steel will be met with
"countermeasures" under World Trade Organization
rules.

Steel and aluminum users, meanwhile, 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.

The Motor and Equipment Manufacturers Association,
representing auto parts makers with 871,000 U.S. employees,
urged Trump in a letter on Tuesday to exclude an extensive list
of products from import restrictions, from tire cord steel to
high-pressure aluminum die castings.
(Reporting by Roberta Rampton, Makini Brice, Susan Heavey and
David Lawder; Additional reporting by Michael Martina in
BEIJING; Editing by Chizu Nomiyama, Tom Brown and Cynthia
Osterman)

© Copyright Thomson Reuters 2018. Click For Restrictions - http://about.reuters.com/fulllegal.asp

Read more about

Talk in Marketing

Most Recent Poll

What best describes your approach to farmland right now?