The U.S. Department of Commerce Secretary Wilbur Ross recommended on Friday that the president impose taxes on steel and aluminum imports due to investigative findings about the impact of industry on national security. "I look forward to his decision on any potential course of action".
Trump has to make a decision on steel by April 11 and on aluminum by April 19. In the early afternoon, shares of United States Steel Corp. were up 10 percent, shares of AK Steel Holding Corp. were up more than 11 percent and shares of Century Aluminum Co. were up almost 7 percent.
The recent global excess capacity is 700 million tons, nearly 7 times the annual total of US steel consumption.
The recommendations unveiled by Secretary Wilbur Ross Friday are likely to escalate tensions with China and other US trading partners.
The proposed measures are meant to lift US production to 80 percent in both industries. The third option involves a quota on all products from all countries equal to 63 percent of their 2017 exports to the United States.
But Commerce said the goal of the measures is to boost domestic aluminium and steel production.More news: Real Madrid prepare for Champions League with thumping victory
"The continued rising levels of imports of foreign steel threaten to impair the national security by placing the USA steel industry at substantial risk of displacing the basic oxygen furnace and other steelmaking capacity", report stated. Any exclusions granted could result in changed tariffs or quotas for the remaining products to maintain the overall effect.
Aluminum: 7.7% tariff on all aluminum exports from all countries.
"For example, there is only one remaining US producer of the high-quality aluminum alloy needed for military aerospace", the report said.
In a report to President Donald Trump, Commerce Secretary Wilbur Ross includes among the options a almost 24 per cent tariff on all products from China, Russia and three other economies.
For aluminum, he recommended either a 7.7 per cent tariffs on the metal from all countries; a quota for all countries; or, perhaps the most shocking of all the options, a 23.6 per cent tariffs on imports of all products from China, Russia, Hong Kong, Vietnam and Venezuela. A quota on imports from all countries to a maximum of 86.7% of their 2017 exports to the U.S.
Each of the three proposals is meant to raise production of aluminum from the present 48% average capacity to 80%, a level that would provide the industry with long-term viability.