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Thread: US Steel & Aluminum Tariffs

  1. #1
    Former Staff Senior Contributor Ironduke's Avatar
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    US Steel & Aluminum Tariffs

    Trump says he's going to implement a tariffs of 25% on steel and 10% on aluminum next week. Meanwhile the EU, Canada, and China and several other countries are considering retaliation.

    The law Trump is using to implement these tariffs is Section 232 of the Trade Expansion Act.

    Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862) authorizes the Secretary of Commerce to conduct comprehensive investigations to determine the effects of imports of any article on the national security of the United States. Section 232 investigations include consideration of:

    • domestic production needed for projected national defense requirements;
    • domestic industry’s capacity to meet those requirements;
    • related human and material resources;
    • the importation of goods in terms of their quantities and use;
    • the close relation of national economic welfare to U.S. national security;
    • loss of skills or investment, substantial unemployment and decrease in government revenue; and
    • the impact of foreign competition on specific domestic industries and the impact of displacement of any domestic products by excessive imports.

    Section 232 requires that the Secretary notify the Secretary of Defense that an investigation has been initiated. The Secretary also consults with the Secretary of Defense regarding methodological and policy questions raised in the investigation and can seek information and advice from other government agencies.

    The Secretary’s report to the President, prepared within 270 days of initiation, focuses on whether the importation of the article in question is in such quantities or under such circumstances as to threaten to impair the national security. The President can concur or not with the Secretary's recommendations, and, if necessary, take action to “adjust the imports of an article and its derivatives.” In addition, the Secretary can recommend, and the President can take, other lawful non-trade related actions necessary to address the threat.
    The Dow sank 420 points the day the tariffs were announced.

    Reactions from around the world:
    Last edited by Ironduke; 02 Mar 18, at 11:50.

  2. #2
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    Quote Originally Posted by Ironduke View Post
    Trump says he's going to implement a tariffs of 25% on steel and 10% on aluminum next week. Meanwhile the EU, Canada, and China and several other countries are considering retaliation
    Sounds like a brilliant businessman making brilliant decisions.
    Far better it is to dare mighty things, than to take rank with those poor, timid spirits who know neither victory nor defeat ~ Theodore Roosevelt

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    Quote Originally Posted by Ironduke View Post
    Article is from wednesday, Juncker announced yesterday that the EU will retaliate.

    http://europa.eu/rapid/press-release...18-1484_en.htm
    European Commission - Statement
    European Commission responds to the US restrictions on steel and aluminium affecting the EU

    Brussels, 1 March 2018

    The European Commission takes note of the announcement by the President of the United States of the imposition of restrictions in the form of an import surcharge on EU exports to the US of steel and aluminium.

    President of the European Commission, Jean-Claude Juncker said: "We strongly regret this step, which appears to represent a blatant intervention to protect US domestic industry and not to be based on any national security justification. Protectionism cannot be the answer to our common problem in the steel sector. Instead of providing a solution, this move can only aggravate matters. The EU has been a close security ally of the US for decades. We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk. I had the occasion to say that the EU would react adequately and that's what we will do. The EU will react firmly and commensurately to defend our interests. The Commission will bring forward in the next few days a proposal for WTO-compatible countermeasures against the US to rebalance the situation."

    Commissioner for Trade Cecilia Malmström added: "These US measures will have a negative impact on transatlantic relations and on global markets. In addition, they will raise costs and reduce choice for US consumers of steel and aluminium, including industries that import these commodities. The EU will seek dispute settlement consultations with the US in Geneva at the earliest opportunity. The Commission will monitor market developments and if necessary will propose WTO-compatible safeguard action to preserve the stability of the EU market. The root cause of problems in these two sectors is global overcapacity caused by non-market based production. This can only be addressed at the source and by working with the key countries involved. This go-it-alone action by the US will not help."

    Background

    On 1 March, President Trump announced the imposition of additional import duties on EU exports of steel and aluminium to the United States. The import duties are set at 25% on steel and 10% on aluminium. Similar restrictions will also be imposed on exports from other suppliers.

    This action follows investigations undertaken between April 2017 and January 2018 by the US Department of Commerce under Section 232 of the US Trade Expansion Act of 1962. These reports concluded that steel and aluminium imports threatened US national security and recommended the imposition of trade restrictions.

    However, in essence, these measures are primarily intended to protect the US domestic industry from import competition. Any national security justification appears very weak: the US Secretary of Defence has stated publicly that US military requirements represent no more than 3% of US production and that the Department of Defence is able to acquire the steel and aluminium it needs for US national defence requirements.
    (bolded part for emphasis)

  4. #4
    Former Staff Senior Contributor Ironduke's Avatar
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    Reminiscent of the 2003 tariffs the EU undertook in response to Bush's steel tariffs.

    https://www.politico.eu/article/eu-o...ump-are-ready/
    EU: Our countermeasures against Trump are ready

    Brussels insisted today it had already drawn up countermeasures to hit back against steel tariffs from U.S. President Donald Trump and that commissioners would discuss them on Wednesday.

    “The Commission has countermeasures ready against the U.S. to rebalance the situation and this is something which the College is going to discuss next week,” spokesman Alexander Winterstein said.

    France and Germany are in contact with Brussels and say the EU has prepared measures to punch back quickly, but are waiting to see whether Trump follows through on his announcement, two officials said. The EU would wait for confirmation “because of the way the White House works right now,” one of them added.

    The retaliation would likely hit products from politically sensitive Republican-run states such as Harley-Davidson motorbikes from Wisconsin, orange juice from Florida and whiskey from Kentucky, home state of the Senate majority leader.

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    They've also been talking about potatoes and tomatoes.

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    Former Staff Senior Contributor Ironduke's Avatar
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    Quote Originally Posted by kato View Post
    They've also been talking about potatoes and tomatoes.
    Targeting Idaho and Florida. If the EU is looking to target red states the hardest, for potatoes and tomatoes there's going to be a collateral hit on blue states, with California producing as many tomatoes as Florida, and Washington producing nearly as many potatoes as Idaho. The potatoes in Washington though are principally produced in Republican-held districts. No idea where tomatoes are produced in CA.

    So right now it looks we're basically heading to a situation like that in 2002-03. I suppose next week we'll find out if things look like they're going to go further.

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    Senior Contributor DOR's Avatar
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    Quote Originally Posted by TopHatter View Post
    Sounds like a brilliant businessman making brilliant decisions.
    "Stable genius" businessman just jacked up the cost of Made in America.
    Trust me?
    I'm an economist!

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    You guys sick of winning yet?


    Win nervously lose tragically - Reds C C

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    Bourbon, Levi's and Harley Davidson explicitly mentioned by Juncker last evening.

  11. #11
    Former Staff Senior Contributor Ironduke's Avatar
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    Quote Originally Posted by Bigfella View Post
    You guys sick of winning yet?
    We need a Donald Trump version of this:
    https://www.youtube.com/watch?v=9QS0...t=33s%E2%80%9D
    Last edited by Ironduke; 03 Mar 18, at 11:29.

  12. #12
    Former Staff Senior Contributor Ironduke's Avatar
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    From the Washington Post:
    https://www.washingtonpost.com/news/...elated-stocks/

    Shortly before Trump announced tariffs, his former adviser dumped millions in steel-related stocks

    President Trump’s decision Thursday to impose crippling tariffs on the imports of steel and aluminum took many by surprise — particularly investors, as the Dow Jones Industrial Average closed the day’s trading down more than 400 points, or 1.7 percent, at 24,608.

    But one billionaire investor and former Trump adviser, Carl Icahn, was seemingly unvexed, having dumped a million shares tied to the steel industry a week before the president announced 25 percent tariffs for foreign-made steel.

    A Feb. 22 SEC filing shows Icahn sold off his $31.3 million stake in the Manitowoc Company, which is a leading global manufacturer of cranes for heavy construction based in Manitowoc, Wis., according to the company’s website. Since Trump’s announcement Thursday, Manitowoc’s stock has plummeted to about $26. Icahn — who has had majority interest in several companies including Motorola, Xerox, Family Dollar and Pep Boys — had sold his shares for about $32 to $34 each, according to the filing.

    Icahn had not actively traded any Manitowoc stock since January 2015, according to regulatory filings.
    Stock market reactions from around the world:

    UK: FTSE 100 sinks to 14-month low, rattled by trade war fears
    Germany: DAX sinks 2.3% as Trump tariffs spark trade-war worries
    Japan: Nikkei down 543 points on steel tariff fears

    From the IBD:
    Trump Steel Tariffs Will Miss China And Hit Canada, Wall Street And You

    The first big shot in the trade war that President Trump promises to launch next week by imposing a 25% tariff on steel imports would be aimed at China but score a direct hit on Canada.

    Canada is the biggest steel exporter to the U.S., shipping 5.8 million metric tons in 2017, or about 16% of total steel imports. Yet Canada is also, far and away, the largest export market for U.S. steelmakers. Through the first three quarters of 2017, the U.S. ran a relatively minor trade deficit with Canada of about a half-million metric tons
    , according to Department of Commerce data.

    Mexico, although it's the No. 4 source of U.S. imports of steel, actually imported more steel from the U.S. than it sent here through the first three quarters of 2017.

    On the other hand, China, which the Commerce Department characterizes as by far the worst offender, accounting for about half of global steel overcapacity, only provides about 2% of U.S. imports, so it won't feel much direct impact from a 25% tariff.

    In other words, it's hard to imagine a clumsier, more ham-handed way of seeking to redress unfair trade practices than a 25% tariff on global steel imports. The collateral damage may include workers from Ford (F) and General Motors (GM), along with American car buyers and — if the Dow Jones industrial average's 420-point dive on Thursday is any indication — U.S. stock investors.

    By the time foreign trade partners hit back with reprisals, the tariffs may boomerang on Harley-Davidson (HOG), Jack Daniels and soybean farmers, and the list may get a lot longer.

    All of that could mean lost jobs in other industries and higher costs for consumers on a wide range of goods.

    "You'll have protection for a long time," President Trump on Thursday told executives of U.S. Steel (X) and Nucor (NUE), among others, saying he'll make 25% steel tariffs and 10% aluminum tariffs official next week.
    https://www.investors.com/news/econo...treet-and-you/
    Last edited by Ironduke; 03 Mar 18, at 14:56.

  13. #13
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    Was it supposed to be aimed at China? If it was the guy is positively certifiable. I believe the EU is second largest supplier of steel to the US market after Canada. I assumed he was just doing Moscow's bidding.

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    Former Staff Senior Contributor Ironduke's Avatar
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    Quote Originally Posted by snapper View Post
    Was it supposed to be aimed at China?
    Yeah, I think so. He probably think it would hurt them the worst.

  15. #15
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    Funny that this Icahn dumped stock in metals at end of last month... so did Deripaska; https://www.cnbc.com/2018/02/23/russ...president.html

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