Trump weighs tariffs, quotas on U.S. steel, aluminium imports

Global Stock Markets

U.S. President Donald Trump said on Tuesday he was considering a range of options to address steel and aluminium 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 aluminium plants in their states, but others urged caution because higher prices would hurt downstream manufacturers that consume steel and aluminium.

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 aluminium are needed to protect national security. The probes were authorized under a 1962 trade law that has not been invoked since 2001.

Trump said that the steel and aluminium industries were being “decimated by dumping” and talked about the empty steel mills he saw on the campaign trail in 2016.

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 aluminium 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 transhipping 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. 

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.

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.

Steel and aluminium 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 aluminium die castings.