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American Shipper

Labor, lawmakers slam metal tariffs

The Trump administration’s decision to drop EU, Canada and Mexico exemptions from tariffs on steel and aluminum sparked chorus of opposition.

   Outside of the Trump administration, Thursday’s White House announcement that the U.S. would drop an exemption of Canada, Mexico and the EU from global tariffs on steel and aluminum drew widespread criticism as the EU moved forward with a World Trade Organization (WTO) complaint about the United States’ decision.
   The WTO on Friday received the EU’s request for consultations on U.S. duties imposed on steel and aluminum imports pursuant to Section 232 of the Trade Expansion Act of 1962, according to a WTO official.
   Even some parties that are usually skeptical of trade liberalization voiced opposition to the tariffs, including the United Steelworkers (USW).
   “The decision not to exempt Canada ignores the fact that Canada’s steel and aluminum exports to the United States are fairly traded and that Canada has shown its willingness to strengthen its laws as well as its cooperation with the United States to fight unfair trade,” that group said in a statement.
   USW represents about 850,000 workers in North America, including about 225,000 in Canada.
   Commerce Secretary Wilbur Ross during a May Senate hearing said U.S. steel trade with NAFTA partners is mostly balanced.
   The Commerce Department didn’t respond to questions about what ultimately informed the executive branch’s decision to follow through on 25 percent steel tariffs and 10 percent aluminum tariffs for Mexico and Canada.
   The Aluminum Association, House Ways and Means Committee ranking member Richard Neal, D-Mass., and Senate Finance Committee Ron Wyden, D-Ore., were among those joining the chorus of opposition to the tariffs after the White House announcement.
   “The administration’s trade remedies should specifically target structural aluminum overcapacity in China, which is caused by rampant, illegal government subsidies in that country,” Aluminum Association CEO Heidi Brock said in a statement. “Tackling overcapacity is the best way for the aluminum industry to thrive in the U.S., addressing the national security concerns identified by the Commerce Department in its Section 232 investigation.”
   Neal characterized the decision to subject the EU, Canada and Mexico to the metal tariffs as a “smoke screen for the Trump administration’s capitulation to China.” In a statement, he singled out China as dedicating extensive resources to building significant steel and aluminum capacity, and noted that those practices have driven producers in the United States and other market economies out of business.
   The Section 232 steel and aluminum tariffs apply to China. The only countries currently exempted are Argentina and Australia from both steel and aluminum tariffs and Brazil and South Korea from only the steel tariffs.
   The American Institute for International Steel (AIIS) was also among those that decried the tariffs. AIIS President Richard Chriss said he was “deeply disappointed” by Thursday’s actions and noted that member manufacturers — even those that only use steel and aluminum produced in the United States — have already seen price increases and longer lead times for steel and aluminum inputs they use in finished products.
   The American Iron and Steel Institute (AISI), however, voiced its support for the tariff action, as AISI CEO Thomas Gibson said that NAFTA discussions should continue and can be a basis to ensure “use of more NAFTA steel while achieving the objectives of the Section 232 remedies.”
   Gibson continued, “The president’s trade actions have already begun putting steelworkers back to work in Ohio and Illinois, and we are grateful for the administration’s commitment to the nearly 2 million jobs supported by the domestic steel industry.”
   Although it is unclear how, if at all, various tariffs implemented and proposed by the Trump administration are impacting U.S. job performance, supporters of the Section 232 metals tariffs could be buoyed by Friday’s Labor Department announcement that U.S. unemployment fell from 3.9 percent in April to 3.8 percent in May as the economy added 223,000 jobs.
   It’s the lowest nationwide unemployment percentage since April 2000, which was the only other time since 1969 that unemployment dropped to 3.8 percent.

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