Steel, Aluminum Stocks Soar On Trump Tariff, Quota Recommendations

Robyn Valdez
February 17, 2018

The Commerce Department on Friday recommended setting strict new limits on imported steel and aluminum, saying action is needed to shore up US industries vital to national security.

Commerce Secretary Wilbur Ross told reporters on Friday that he has presented several options to the president.

The targeted quota would include a quota by product on steel imports from other countries that would be equal to 100 percent of their 2017 exports to the USA, according to the report.

"The Commerce Department's recommendations today we hope are the beginning of efforts by this administration to finally get tough on China and help level the playing field for American steel and aluminum producers and workers", Schumer said in a statement. The Commerce Department recommended a tariff of at least 24 percent on steel imports from all countries or a 53 percent tariff on steel imports from 12 countries, including Brazil, China, Russia and Turkey.

Trump eyes tariffs, quotas on United States steel, aluminum imports
Steel (X) rose 3.6%, AK Steel (AKS) 4.4%, Steel Dynamics (STLD) 2.1%, and Nucor (NUE) 1% on the stock market today . Trump is mulling whether to takes steps to limit steel and aluminium imports seen as damaging to US businesses.

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. "And part of the options would be tariffs coming in", Trump said.

Steel stocks soared on the recommendations, with U.S. Steel up 9.7 percent, AK Steel up 9.9 percent and the broader S&P 1500 steel index up 4 percent.

In a statement in response to the Commerce report, the group continued to stress that it believes any action should address Chinese overcapacity, not interfere with trading relationships between the USA and countries such as Canada and the European Union, and avoid unintended consequences for USA production and jobs, including for the downstream industry. However, he says he won't be revealing the President's decision on retaliatory tariffs.

The recommendations released Friday also include aluminum. The President may take a range of actions, or no action, based on the analysis and recommendations provided in the reports. China was noted as the "largest source of excess steel capacity", which in itself exceeds the total USA steel-making capacity. The American Automotive Policy Council, a Washington-based trade group that represents GM, Ford and Fiat Chrysler Automobiles NV, warned in May that import restrictions would hurt the auto industry and its workers.

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The 10-month investigation determined that the quantities and circumstance of steel and aluminum imports "threaten to impair the national security".

The recommendations could boost the USA steel industry.

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.

The department suggests a variety of ways the United States could act to restrict imports.

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Vice President Pence is leading the USA delegation in Pyeongchang and has said he is open to meeting with North Korean officials. South Korean tours to the resort were closed after a South Korean tourist was shot by a North Korean guard there in 2008.

Other reports by Info About Network

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