Trade remedies for steel and aluminum are long overdue
Senior Economist and Director of Trade and Manufacturing Policy Research, Economic Policy Institute
The Commerce Department today released public summaries of the reports on its investigations into the impact on national security from imports of steel and aluminum products. The Department found that steel and aluminum imports “threaten to impair the national security.” The reports recommend alternative remedies that can be used to return domestic steel and aluminum industries to full health (with 80 percent operating capacity), in each case.
The United States should impose strong restrictions on imports of steel and aluminum, and should work with other nations to develop coordinated responses to excess capacity and unfair trade in these products.
Each report recommends three alternative sets of remedies to help restore domestic production and employment, ranging from global tariffs, to a mix of tariffs targeted on countries responsible for excess capacity and unfair trade (e.g. China, Brazil, India, Korea, Turkey, Vietnam, and others in steel) and quotas for other countries, and finally, global quotas on imports. These remedies are long overdue. President Trump promised quick action when these studies were ordered nearly one year ago. Delays have heightened the import crisis for thousands of U.S. steel and aluminum industry workers.
These reports are under review by the president, who must make final decisions about steel and aluminum trade remedies by April 11 and April 19, 2018, respectively. The president may take a range of actions, may modify the proposed actions, or take no action at all.
The crisis in steel and aluminum trade is driven by the development of massive amounts of excess production capacity, resulting in import dumping originating in China and a limited number of other countries that are singled out for higher tariffs in the reports’ most aggressive remedy proposal. In remarks to the press on release of these reports, Commerce Secretary Wilbur Ross indicated that the release of the reports was designed to encourage other countries to join the United States in coming up with stronger measures to force China to curb its overcapacity.
The United States should use the opportunity provided by the release of these reports to develop a common, multinational response to the problems of excess capacity in steel and aluminum. The United States should take the lead in setting strong, effective restrictions on steel and aluminum imports, especially from unfair trading countries, and it should work with other nations to enact similar restrictions on a cooperative basis.
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Reposted from the EPI
