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US Commerce Department proposes global tariffs on steel, aluminum

The U.S. Department of Commerce has recommended to the White House a series of tariffs on steel and aluminum imports, after a monthslong national security investigation.

On aluminum, Secretary Wilbur Ross proposed that President Donald Trump consider the following options: a tariff of at least 7.7% on all aluminum exports from all countries; a tariff of at least 23.6% on all products from China, Hong Kong, Russia, Venezuela and Vietnam, with all unlisted countries being subject to a quota equal to 100% of their 2017 exports to the United States; a quota of all imports from all countries equal to a maximum of 86.7% of global 2017 exports to the United States.

On steel, the secretary recommended these actions: a global tariff of at least 24% on all steel imports from all countries; a tariff of at least 53% on all steel imports from Brazil, China, Costa Rica, Egypt, India, Malaysia, South Korea, Russia, South Africa, Thailand, Turkey and Vietnam, with unlisted countries facing a quota by product equal to 100% of their 2017 steel exports to the United States; a quota on steel products from all countries equal to 63% of each individual country's 2017 exports to the U.S.

President Donald Trump has until April 11 to make a final decision on the steel recommendations and until April 19 with regard to aluminum. Trade experts have suggested that the use of the national security review — under Section 232 of the Trade Expansion Act of 1962 — to impose restrictions could harm international relationships.

Ross told reporters that the objective of the proposed tariffs is to raise domestic production for each industry in the U.S. to roughly 80% of its capacity, a move the secretary contends would provide each industry with "long-term viability." Ross noted that domestic steel production currently amounts to 73% of operating capacity.

"We believe, and our counsel believes, that this is a perfectly valid interpretation of national security the way that it's used in Section 232, which is much broader than you might think in terms of usual parlance," Ross said when asked if the decision could be used to address perceived unsatisfactory decisions reached in anti-dumping cases and if the department is concerned about retaliation. "As to whether there will be a challenge, it wouldn't surprise us if there were. Any time you do something that affects a number of countries, the likelihood is that they will bring a WTO action and/or take other measures."

Ross also said that parties contemplating challenges at the World Trade Organization would have to wait until both Trump and the WTO had rendered decisions before seeking action from the trade body. He also told reporters that there is no specific scheduled termination date for any of the actions, should Trump elect to follow through on the recommendations.

Ross said the department's recommendations were not written to explicitly exclude NATO allies from any tariffs, even though Turkey is the only NATO member listed as a tariff target.