Trading Partners, Industry Express Alarm Over 232 Recommendations
South Korea and China are reportedly signaling plans to challenge potential new tariffs or quotas on foreign steel and aluminum. Kang Sung-cheon, deputy minister of trade, told the local press that South Korea should not be on the list of 12 countries targeted for high U.S. tariffs, just because it imports steel from China. "Steel products imported from China are mostly used to satisfy domestic demand in the construction and shipbuilding sectors, while Korean steel shipped to the U.S. is (made up of) high-value added products for the automobile and energy industries," Kang said.
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China complained that the Commerce Department reports on possible responses to U.S. injury resulting from dumped steel and aluminum don't contain a factual basis for action, Bloomberg reported. Wang Hejun, chief of the trade remedy and investigation bureau at China’s Ministry of Commerce, said that “if the final decision impacts China’s interests, China will certainly take necessary measures to protect its own rights.” Commerce Secretary Wilbur Ross acknowledged that some international pushback is likely in response to any Section 232 report recommendations that are implemented (see 1802160020).
At the same time, many U.S. business interest leaders expressed concern about the tariffs, either because they fear their exports would be hurt by retaliation or because they believe it could raise their input costs. "Everyone agrees we need to hold our trading partners accountable, but taking unilateral action to raise tariffs often comes with harmful unintended consequences," Brian Kuehl, executive director of Farmers for Free Trade, said in a statement after the report's release. He said if the president levies tariffs on the imported metals it could put "U.S. agricultural exports in the cross-hairs."
Ross told reporters that he did not expect the tariffs to cause disruption in the auto industry, because, he said, metal is a very small proportion of the product's cost. The American Automotive Policy Council isn't so sanguine. "This would place the U.S. automotive industry, which supports more than 7 million American jobs, at a competitive disadvantage," American Automotive Policy Council President Matt Blunt said in a statement. The AAPC represents Ford, GM and Fiat Chrysler.
If the administration chooses quotas or tariffs on steel and aluminum products, U.S. buyers will have the opportunity to request exemptions if the products they buy are not available domestically. The U.S. Tire Manufacturers Association said the steel in tires is not available from domestic steel mills. "We strongly urge the Administration to exempt the tire industry from any such tariffs and quotas, or at the least commit to establishing a process for timely review of exemption applications," Anne Forristall Luke, CEO of the USTMA, said in a statement.
Retaliation is not the only problem these tariffs could create for the American economy, the Business Roundtable said after the reports were released. The organization warned that a Section 232 action " could embolden other countries to use ‘national security’ to restrict U.S. goods and services entering their markets. “We urge the President not to take Section 232 action and, instead, develop a different approach to address global overcapacity of steel and aluminum that does not put the U.S. economy at such high risk.”