China Steel

BEIJING/MANILA (Reuters) – China’s steel output surged to a record in May as mills ramped up production to chase fat profit margins, with a strong outlook for demand likely to keep mills running at nearly full capacity for the rest of the year.

 

The increased output comes despite China’s efforts to limit production in key areas as part of its anti-pollution campaign and highlights Beijing’s challenge in tackling overcapacity in the world’s top steel producer.

China produced 81.13 million tonnes of crude steel last month, up 5.8 percent from the previous month and 8.9 percent from the same month last year, according to data from the National Bureau of Statistics. Year-to-date output rose 5.4 percent to 369.86 million tonnes.

To view a graphic on China’s Monthly Crude Steel Output, click: reut.rs/2MohKT6

 

Daily average output climbed 2.4 percent to 2.62 million tonnes in May from April, according to Reuters’ calculations based on the official data.

“Steel mills have been running full-load and adding scrap steel to increase output in order to cash in on strong margins,” said Zhuo Guiqiu, senior analyst at Jinrui Futures.

Given firm demand and smog-battling production curbs in areas including the key steelmaking hubs of Hebei and Jiangsu provinces, analysts say mills can earn up to 900 yuan ($141) by producing a ton of steel at present, not far from more than 1,000 yuan late last year.

The utilization rate at steel firms across the country was above 71 percent from late May, a level last seen before winter production curbs which kicked in in October and lasted through March.

Recent environmental inspections in some 10 regions have forced some mills to cut production. But analysts do not expect the curbs to last long, unless new environmental policies add to pressure on supplies.

“Demand from downstream sectors may be better than expected,” said Zhuo. “The market generally believes the infrastructure construction sector is more active in the second half than in the first half, which could lift demand for steel products.”

Underlining firm demand, steel stockpiles at both mills and traders declined in May despite rising output, Mysteel consultancy data showed.

To view a graphic on Steel products inventory at Chinese mills, click: reut.rs/2JKFm2H

 

China’s output has been increasing despite its closure of 255 million tonnes in steel production capacity in the past two years, including illegal induction furnaces.

That is part of Beijing’s vow to address overcapacity that has dogged its steel sector for years.

Outside China, Chinese steel companies have built or acquired 13.5 million tonnes of capacity and are building an additional 8.6 million tonnes over the next few years, Morgan Stanley analysts said.

 

Meili and Steelworkers call for pipeline expiry dates to create jobs and protect public safety

Today NDP Leader Ryan Meili and United Steelworkers Local 5890 President Mike Day called on the Sask. Party government to improve pipeline safety and create jobs by introducing expiry dates for pipelines.

“The tariffs Donald Trump is imposing on Canadian steel will have serious negative impacts on steel manufacturing jobs here in Saskatchewan,” said Meili. “We have more than 100,000 kilometers of pipelines and flowlines in Saskatchewan, and many are old and should be replaced. We saw with the Husky oil spill last year how costly spills can be, and it’s time for the provincial government to introduce expiry dates on pipelines to protect Saskatchewan water and land while also creating jobs. It’s all well and good for Scott Moe to go to Ottawa and Washington, but he needs to show leadership and help workers in Saskatchewan.”

Meili’s proposal would require different expiry date standards for pipe depending on the material and whether the pipe is near a body of water. New pipe manufactured at Evraz steel emits less carbon dioxide than pipe made at most other plants, and existing pipelines can be recycled to make new pipe after being replaced.

In Volume 1 of the 2018 Provincial Auditor’s Report, the auditor noted that there were ongoing problems in pipeline regulation in the province.

“Bringing in expiry dates for pipelines will help to protect good jobs here in Regina, and it will help create construction jobs out on worksites across the province,” said Day. “Steelworkers are concerned about how American tariffs will lead to lost jobs, and this proposal from the Saskatchewan NDP will help create extra demand for steel made right here in Regina.”

NDP GETS UNANIMOUS CONSENT IN HOUSE TO SUPPORT MOTION

 

OTTAWA – Today, NDP International Trade Critic Tracey Ramsey (Essex) received unanimous consent for her motion calling on all Members of the House of Commons to support the following:

 

That the House: (a) recognize the importance of Canada’s long-standing, mutually beneficial trading relationship with the United States of America; (b) stand with Canadian workers and communities that directly or indirectly depend on this trading relationship; (c) strongly oppose the illegitimate tariffs imposed by the U.S. government against Canadian steel and aluminum workers; (d) stand in solidarity with the Government of Canada in its decision to impose retaliatory tariffs; (e) remain united in support of Canadian farmers and supply management, which is integral for dairy, chicken, turkey, and egg farming; and (f) reject disparaging ad hominem statements by U.S. officials which do a disservice to bilateral relations and work against efforts to resolve this trade dispute.

 

“I believe this was an important step to show the solidarity and united front of Canada’s Parliament against the deliberately divisive actions of the President of the United States after his visit to Canada and the G7 meetings this weekend,” stated Ramsey. “Thousands of Canadian workers and communities rely upon trade with our closest neighbour and ally, and it is incumbent for the entirety of Parliament to show stabilty and a united front, in these turbulent times.”

 

U.S., as well as Canada, will be hurt by Trump’s tariffs on steel and aluminum, C.D Howe study finds

Canada will sustain the most damage from U.S. tariffs on steel and aluminum, but jobs will be eliminated in the United States and gross domestic product in that country will be reduced.

Those are among the conclusions of a study done by the C.D. Howe Institute on the 25-per-cent and 10-per-cent tariffs on steel and aluminum, respectively, that the United States has imposed on imports of the metals from Canada, Mexico, the European Union and other countries.

About 6,000 jobs will be shed in the Canadian economy and GDP in this country will take a hit of 0.11 per cent. The tariffs will lead to approximately 22,700 job losses in the United States and reduce GDP by 0.06 per cent, says a forthcoming paper on the study written by economist Dan Ciuriak and Jingliang Xiao, a research associate.

But if the real aim of U.S. President Donald Trump’s belligerent new trade policy is China, it will miss the target with the steel and aluminum tariffs. Continue reading U.S., as well as Canada, will be hurt by Trump’s tariffs on steel and aluminum, C.D Howe study finds

An insult to Canada U.S. tariffs will damage Pennsylvania’s economy, and America’s and Canada’s, too

 

As consul general of Canada to Pennsylvania, I have traveled across the commonwealth and my team and I have engaged with business executives, politicians and labor leaders from Pittsburgh to Philadelphia and all points in between.

Everywhere I go, my message is the same: Canada is the United States’ largest trading partner and most steadfast ally. Canadian soldiers have served alongside Americans in difficult places around the world. We have fought and died together.

That is why the decision by the U.S. administration to impose tariffs on Canadian aluminum and steel, citing national security concerns, is so perplexing and hurtful to Canadians. The idea that Canada could be considered a national security threat by selling goods to the United States is, as Prime Minister Justin Trudeau put it, quite frankly, insulting.

The facts are clear: The United States has a $2 billion surplus in steel trade with Canada. Canada buys more American steel than any other country in the world, representing half of all U.S. steel exports. Canada is working directly with the United States to prevent unfairly priced foreign steel and aluminum from flooding the North American market. U.S. tariffs on Canadian metal products will be harmful to industry and workers on both sides of the border, disrupting supply chains that have made North American steel and aluminum more competitive around the world.

Nowhere in the United States will this be felt more acutely than in Pennsylvania. The economies of Canada and the commonwealth are too intertwined for this decision not to significantly affect families and communities across the state, as it will across America.

The decision to levy tariffs on Canadian steel and aluminum does nothing to address the very real problem of foreign steel and aluminum overcapacity and dumping. Instead, it will hit American consumers with higher costs and spark retaliation, which will drive up prices and harm both our economies.

In my travels across this great state, I have met with many companies that rely on Canada as both a provider and a consumer of steel and aluminum. Our trade is integrated, fair and balanced.

The relationship between Canada and the United States is deep, multifaceted and, yes, complicated. But one thing is clear: For the past 150 years, it has been powered by a spirit of partnership unparalleled around the world. Targeting Canada for tariffs runs completely counter to the dynamic that has underpinned the economic prosperity and success of the U.S.-Canadian relationship for the last century.

Our disagreement is not with the American people; it is with this particular government policy.

I remain optimistic that, with the support our partners in Pennsylvania and across the United States, common sense will prevail.

PHYLLIS YAFFE, consul general of Canada to Pennsylvania

USW warns against renewed flood of dumped Asian steel this summer

Canada should brace for a renewed flood of dumped Asian steel this summer, say the United Steelworkers. Cabinet yesterday promised new measures to block the transshipment of unfairly-priced steel imports through Canada to the U.S.

“We need to act quickly,” said Mark Rowlinson, assistant to the Canadian national director of the Steelworkers’ union. The U.S. has proposed a 25 percent tariff on steel imports. Rowlinson said the industry expects Asian mills to divert shipments through Canada.

“We have every reason to believe we’ll start to see the impacts this summer,” said Rowlinson. “If you are a producer of dumped, subsidized steel or aluminum in China or anywhere else, where are you going to look? You’re going to look to dump it into Canada, and that poses a real threat to Canadian jobs.”

Continue reading USW warns against renewed flood of dumped Asian steel this summer

Canada acts to further prevent trans-shipment and diversion of steel and aluminum to protect North American workers against unfair trade

The trans-shipment and diversion of unfairly cheap foreign steel and aluminum is a threat to Canadian jobs and the North American market.

Canada already has one of the toughest enforcement regimes in the world to combat this practice. We currently have 71 trade remedy measures in force on steel and aluminum imports alone. And we are strengthening enforcement further, to stop foreign exporters from avoiding duties meant to level the playing field.

The following regulatory changes will be brought forward and be subject to a 15-day consultation period through the Canada Gazette:

Continue reading Canada acts to further prevent trans-shipment and diversion of steel and aluminum to protect North American workers against unfair trade

NAFTA

U.S. President Donald Trump has put new pressure on Nafta negotiations with an order saying he’ll impose steel and aluminum tariffs on Canada and Mexico on May 1 if he’s not satisfied with talks.

Trump’s presidential proclamation Thursday sets tariffs for some countries as of Friday while excluding others such as Canada and Mexico. The document specifies for the first time when those exclusions will run out, adding to pressure for a deal to be reached on the North American Free Trade Agreement around the same time.

A White House statement said Trump will decide by May 1 “whether to continue to exempt these countries from tariffs, based on the status of discussions.” Mexico has said it needs a deal by the end of April, or that talks might as well stretch past the country’s summer election, and then U.S. midterm elections this fall. Canada and Mexico continue to push for permanent exemptions from the tariffs, which have been set at 25 percent for steel and 10 percent for aluminum. Canada is the leading source of U.S. imports of steel and aluminum. Steel is closely tied to the auto sector, one of the core disputes in Nafta. Continue reading NAFTA

Trudeau tells Hamilton Canada won’t become a steel and aluminum dumping ground

Ships loaded with cheap offshore steel are believed to be headed for Canada, but the government will work to make sure it does not become a back door for producers trying to enter the U.S. market, Prime Minister Justin Trudeau said Tuesday on his tour of Canadian steel and aluminum producing regions.

“That’s a concern that we share with the Americans,” Mr. Trudeau said in Hamilton, the second stop on a journey that began Monday in Quebec and will take him to Sault Ste. Marie, Ont., and Regina this week.

The trip comes after Canada won an exemption from tariffs

Continue reading Trudeau tells Hamilton Canada won’t become a steel and aluminum dumping ground

Permanent Tariff Exemption Needed for Canadian Steel, Aluminum: Steelworkers

TORONTO, MONTREAL, 8 March 2018 – Canada’s steel and aluminum producers must be permanently exempted from U.S. tariffs, the United Steelworkers (USW) says.

 

“The evidence is clear and overwhelming. Canadian steel and aluminum exports are not part of the problem that the U.S. administration is trying to address through its tariff measures,” said USW National Director Ken Neumann said today.

Continue reading Permanent Tariff Exemption Needed for Canadian Steel, Aluminum: Steelworkers

NDP STATEMENT ON STEEL AND ALUMINUM TARIFFS TEMPORARY EXEMPTION

NDP International Trade Critic, Tracey Ramsey, made the following statement: 

 

“New Democrats, together with industry stakeholders and workers, cautiously welcome President Trump’s announcement today that the proposed steel and aluminum tariffs will be delayed. President Donald Trump has caused Canadian workers a great deal of anxiety over the past week and as the Member of Parliament for an area in which jobs are reliant upon most of these major industries, it certainly has caused sleepless nights.

Continue reading NDP STATEMENT ON STEEL AND ALUMINUM TARIFFS TEMPORARY EXEMPTION

Trump uses tariff exemption to leverage NAFTA outcome

U.S. President Donald Trump has exempted Canada and Mexico from his steel and aluminum tariffs pending the renegotiation of NAFTA, simultaneously offering his continental trading partners a welcome reprieve and tightening the vise on them at the bargaining table.

Mr. Trump unveiled details on Thursday of his tariffs of 25 per cent on steel and 10 per cent on aluminum, which will take effect in 15 days. For now, only Canada and Mexico will escape the levies; other countries will have to negotiate for exemptions.

The President is citing national security – the need to secure a domestic supply of metal for military equipment – as the reason for applying the duties under an obscure 1962 law. Continue reading Trump uses tariff exemption to leverage NAFTA outcome

Prime Minister Tour on Tariffs.

OTTAWA — Justin Trudeau intends next week to tour regions of the country that are heavily reliant on the steel and aluminum industries in a show of solidarity for those who would be hurt the most by the imposition of stiff U.S. tariffs.

Prime ministerial spokesman Cameron Ahmad says Trudeau plans to meet with workers, business leaders, industry leaders and union leaders to demonstrate his support for those who may be affected by the tariffs.

Ahmad would not speculate on whether Trudeau’s tour will proceed if Canada wins an exemption.

The tour is to begin Monday in Alma, Que., home to one of Rio Tinto’s seven aluminum smelters in the province.

On Tuesday, he is to visit Hamilton, where the head of Steeltown’s chamber of commerce has predicted the tariffs could put 40,000 jobs in jeopardy, and Sault Ste. Marie, where Algoma Steel is the city’s largest employer.

He is to head Wednesday to Regina, where Evraz Steel — which bills itself as the largest steel company in western Canada —  has operations.

U.S. President Donald Trump has vowed to impose a 25 per cent tariff on steel imports and a 10 per cent tariff on aluminum imports, with details expected to be unveiled Thursday.

The Trudeau government has been lobbying aggressively for Canada to be excluded from the tariffs, but there have been conflicting signals from the White House about the possibility of any exemptions. Trump himself has said an exemption for Canada and Mexico is possible if negotiations to modernize the North American Free Trade Agreement are concluded to his satisfaction.

Canada is the biggest supplier of steel imported by the U.S. each year. But Canada is also the biggest foreign buyer of American steel.

The Canadian Steel Producers Association says trade in steel between Canada and the U.S. was worth $12 billion in 2017 and was “evenly balanced” between the two countries.

 

Possible Tariff Exemption

President Trump is planning to offer Canada and Mexico a temporary exemption from new tariffs on steel and aluminum imports, reversing his original insistence that the measures apply to U.S. allies as well as nations like China, administration officials said Wednesday.

One version of the plan, which was still being finalized ahead of an expected announcement on Thursday, would give Canada and Mexico a 30-day exemption from the tariffs, the officials said. The exemptions could be extended based on progress in renegotiating the North American Free Trade Agreement.

The move comes as the White House signaled a new flexibility after a six-day drama that has roiled relations with the country’s closest allies, triggered the resignation of National Economic Council chief Gary Cohn and spooked investors. Republicans in Congress have been urging the president to narrow his proposed global tariffs to avoid boomeranging on U.S. businesses and consumers.

Peter K. Navarro, the director of the White House’s Trade and Manufacturing Policy office, said Wednesday night on Fox Business that the president would meet Thursday at 3:30 p.m. with steel union workers and “sign the proclamations.

And within about 15 to 30 days, the tariffs go into effect. The proclamation will have a clause that does not impose these tariffs immediately on Canada and Mexico.” Other officials said the timing of the announcement and details of the plan remained fluid and subject to change.

In advance of the meeting, Trump tweeted that it was important to “protect” the U.S. steel and aluminum industries, while also offering concessions to “real friends.” 

But Trump also revisited the idea of using tariffs as leverage in trade bargaining and other talks — without specifically mentioning NAFTA. Trump wrote that flexibility is extended only to countries that “treat us fairly in both trade and the military.”

The White House shift came after Defense Secretary Jim Mattis and Secretary of State Rex Tillerson made a last-minute appeal for flexibility, saying that overly broad tariffs would damage key security ties with U.S. allies.

On Capitol Hill, Republican lawmakers accelerated their efforts to pull the president back from a potentially costly trade war that he has insisted would be “easy to win.”

Rep. Kevin Brady (R-Tex.), the chairman of the House Ways and Means Committee, released a letter signed by 107 House Republicans that urges the president “to tailor” the tariffs to address market distortions caused by Chinese surplus production depressing global metals prices.

“We urge you to reconsider the idea of broad tariffs to avoid unintended negative consequences to the U.S. economy and its workers,” the letter read. “Because tariffs are taxes that make U.S. businesses less competitive and U.S. consumers poorer, any tariffs that are imposed should be designed to address specific distortions caused by unfair trade practices in a targeted way while minimizing negative consequences on American businesses and consumers.”

The party’s extraordinary internal split was underscored when the Republican Study Committee, representing more than half of House Republicans, released a statement defending free trade and labeling tariffs a “tax on American consumers and businesses.”

Rep. Mark Meadows (R-N.C.), the chairman of the Freedom Caucus and one of Trump’s most trusted allies in Congress, has spoken with the president multiple times over the past week in opposition to the tariffs, said three people briefed on his efforts who were not authorized to speak publicly.

“I’ve never seen anything like this. ‘Chaos’ doesn’t really do it justice,” said Claude Barfield, a resident scholar at the right-leaning American Enterprise Institute.

Government lawyers have struggled in recent days to reconcile Trump’s public comments with the legal provisions they have been told to enforce. For example, Trump is trying to use the tariff threats to force Canada and Mexico to offer unrelated concessions in NAFTA. By publicly acknowledging this, he has potentially spoiled the legal standing of the tariffs, a senior administration official said, making it harder for them to design the prohibitions.

Earlier in the week, Trump suggested that he would exclude Canada and Mexico from the new levies only if they made concessions in negotiations aimed at reaching a new NAFTA deal. Officials from both countries rejected the demand, with Canadian Prime Minister Justin Trudeau calling the new tariffs “absolutely unacceptable.”

Major business groups that are normally allied with the Republican Party joined the anti-tariffs chorus.

“These new tariffs would directly harm American manufacturers, provoke widespread retaliation from our trading partners, and leave virtually untouched the true problem of Chinese steel and aluminum overcapacity,” said Tom Donohue, president of the U.S. Chamber of Commerce.

“Alienating our strongest global allies amid high-stakes trade negotiations is not the path to long-term American leadership.”

The Grocery Manufacturers Association warned that the import taxes would disrupt global supply chains and raise costs for consumers, while the Beer Institute chimed in with predictions of 20,000 job cuts by its members.

The American Institute of Architects said the import levies would “drastically increase” the cost of building materials, threatening the viability of the president’s infrastructure proposal.

Republican lawmakers also want the president to establish a “robust exclusion process” when he announces the tariffs so that businesses can apply for waivers to import products that cannot be obtained from domestic sources.

The president may sign the official tariff order as soon as Thursday, but details of additional exclusions may not be ready for 30 days, according to one former U.S. trade official.

When the U.S. last imposed tariffs on imported steel in 2002, George W. Bush’s administration had a waiver process in place six months before the tariffs took effect.

“In the short term, it’s going to be chaotic,” said William Reinsch, a former Commerce Department official now at the Center for Strategic and International Studies.

The situation left lobbyists and economists alike unsure of the road ahead. By themselves, the tariffs are likely to have little impact on a $20 trillion economy that is already at full employment.

But with the European Union, Canada and China vowing retaliation, there is a danger that a costly global conflict could erupt, said Jim O’Sullivan, chief U.S. economist for High Frequency Economics, who expects the economy to expand by 2.9 percent this year.

“My fairly positive forecast for the economy assumes it does not turn into a major confidence-sapping trade war, with equities plunging etc.,” O’Sullivan said via email. “I think the equity market will be an important signaling device here.”

For now, the stock market — after plunging by 586 points when the tariffs were announced — appears sanguine. The Dow Jones industrial average fell by less than 1 percent on Wednesday and remains higher than on March 1, when Trump first disclosed his tariff plan.

The president signaled in a pair of tweets that his attention may soon shift to China. “The U.S. is acting swiftly on Intellectual Property theft. We cannot allow this to happen as it has for many years!” he wrote.

The administration has been considering for weeks various measures intended to punish China for compelling foreign companies to surrender their trade secrets in return for access to the world’s second-largest economy.

Among the options under review are tariffs on a variety of Chinese products and new restrictions on Chinese investment in the United States, according to individuals familiar with the discussions.

The most radical steps would attempt to unwind existing Chinese investments, not just limit new ones, but that would raise legal questions, they said.

The debate follows Trump’s request in August for Robert E. Lighthizer, the U.S. trade representative, to examine whether China’s intellectual property policies unfairly discriminated against U.S. companies. That probe could continue until August, but a decision is expected by the end of this month, according to a former U.S. trade negotiator.

In striking at China, the administration can expect more uniform backing from corporate leaders, who have grown frustrated with the country’s less welcoming stance under President Xi Jinping.

Earlier in the day, the president also tweeted inaccurately about the overall trade balance between the United States and China.

“China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!” the president wrote.

In fact, China last year had a $375 billion trade surplus with the United States. Reducing it by $1 billion would have no appreciable economic consequences.

The overall U.S. trade deficit rose to $56.6 billion in January, the highest monthly figure in more than nine years, the Commerce Department said.

Steel industry leaders are split over whether to exclude Canada. The United Steelworkers union, which has numerous members in Canada, is urging the administration to exclude Canada, arguing that America’s northern neighbor trades fairly.

“There’s no rational reason to have Canada sanctioned, because Canada never broke the rules,” said Leo Gerard, international president of the USW. “We want to encourage the administration to go after the cheaters.”

But steel executives are more leery of an exemption for Canada, the largest source of imported steel. The country’s mills could become an even larger source as companies in the United States scramble to find new suppliers if the tariff goes into effect only on Asia and Europe.

Trump should do a “fixed tariff across the board,” said Dan DiMicco, chairman emeritus of Nucor, one of the largest U.S. steel producers. “If I had my way, we’d be doing a 50 percent tariff on the really bad actors and 20 percent on the rest.”

Bush exempted Canada and Mexico from his steel tariffs in 2002. At the time, Bush’s advisers felt it wouldn’t be fair to put the tariff on such close allies and free trading partners. However, economists say there were still negative impacts on the economy, even with the carve-out for Canada and a handful of other nations and products.

“I don’t think it’s a game changer to get Canada excluded from tariffs,” said Doug Holtz-Eakin, who has advised GOP candidates for president. “We did that under Bush. It was still the case that domestic harm to steel-consuming industries outweighed the gains to steel producers.”

david.lynch@washpost.com

heather.long@washpost.com

damian.paletta@washpost.com

Erica Werner, Robert Costa, Josh Dawsey and Brian Murphy contributed to this report.

U.S Anti Dumping Case

WASHINGTON, March 5 (Reuters) – The U.S. International Trade Commission on Monday voted to continue anti-dumping and subsidy investigations into imports of large-diameter welded pipe from Canada, China, Greece, India, South Korea and Turkey, it said in a statement.

The U.S. Commerce Department said last month it was examining whether manufacturers from those countries are selling the pipe in the United States at below-market rates or are being unfairly subsidized by their governments.

The trade case comes amidst global trade jitters after U.S. President Donald Trump said last week he would impose broad tariffs on imports of steel and aluminum to protect U.S. national security under a Cold War-era trade law, a move that could raise consumer prices and ignite a trade war. Imports of the welded steel pipe, used to build oil and gas pipelines, in 2016 totaled $441.4 million from the six countries, department data show.

The probe was launched after a petition from a group of privately held U.S. producers and covers welded carbon and alloy steel pipe larger than 16 inches (406.4 mm) in diameter.

The pipe can be used to transport oil, gas, slurry, steam or other fluids, liquids or gases.

The investigation is one of around 100 the Trump administration has opened since taking office, which it says are aimed at protecting U.S. manufacturers in global markets.

The Commerce Department estimated that in 2016 imports of large-diameter welded pipe from Canada had a value of $66 million, China $139 million, India $26 million, Greece $70 million, South Korea $150.3 million and Turkey $116.1 million.

It estimated dumping margins at 50.89 percent for Canada, 120.84 percent to 132.63 percent for China, 41.04 percent for Greece, 37.94 percent for India, 16.18 percent and 20.39 percent for South Korea and 66.09 percent for Turkey.

“Dumping” is the practice of selling goods below market price.

The Commerce Department is scheduled to make its preliminary subsidy decision by April 16 and its preliminary dumping determination by June 29.

Trump campaigned on a platform of restoring a level playing field to trade relations, in particular with China. Even before the steel and aluminum tariff proposals, his administration was accused of courting a trade war by vetoing new appeals judges at the World Trade Organization, hobbling the trade dispute settlement system and running the risk that trade friction will explode into tit-for-tat actions.

 

Steel Tariffs

TORONTO: Canada’s steel sector could be wounded by US tariffs even if the country is exempt from the 25 percent duty promised by President Donald Trump, as cheap steel previously sold south of the border floods into Canada, industry leaders said on Friday. Canadian officials are trying to secure an exemption from potential US tariffs on steel and have threatened retaliation if the plan goes ahead. But even a deal that protects exports from Canada, the biggest steel supplier to the United States, would not solve all of the industry’s problems. “It would significantly harm Canadian producers in our home market, just swamping the marketplace with that imported steel,” said Canadian Steel Producers Association President Joseph Galimberti on the proposed tariff. A letter from nine Canadian steel executives sent to Prime Minister Justin Trudeau and other government ministers on Thursday warned that the tariff could displace 13 million tonnes of steel currently sold in the United States. The letter, seen by Reuters, called for targeted trade cases and also raised the possibility of new legislation to defend the industry. Galimberti said the Canada Border Services Agency would need more resources to quickly investigate and enforce trade rules, including rules against dumping.

Speculation in Washington about possible ‘adjustments’ to steel tariffs

WASHINGTON — The Trump administration is coming under political pressure at home to exclude Canada from global tariffs on steel and aluminum, and while stating its preference for a hard line it’s leaving the door open just the tiniest crack to the possibility of adjustments.

Lawmakers, businesses, and hosts on the Sunday political talk-shows all challenged the logic of slapping a national-security tariff on a peaceful next-door neighbour, pushing the administration to justify its move.

The administration says a final announcement is coming next week. On Sunday, it signalled that President Donald Trump is leaning toward a no-exceptions-for-anyone attitude  but then added some potential asterisks.

In the midst of an internal tug-of-war within the White House the administration was represented on the talk shows by two of its most prominent trade hawks, Trump advisor Peter Navarro and Commerce Secretary Wilbur Ross.

Both appeared to suggest the decision is close to final.

While no countries will be excluded, Navarro said some industries could get exemptions. This is of keen interest to Canada’s auto sector, which is a leading supplier of steel and aluminum to the U.S.: “There’ll be an exemption procedure for particular cases where we need to have exemptions so business can move forward,” Navarro said on CNN.

Ross held out the slim prospect of some changes: “We shall see,” he told NBC’s “Meet The Press.”

“(Trump) has made a decision at this point,” he said of the 25 per cent tariff for steel and 10 per cent tariff for aluminum. “If he for some reason should change his mind, then it’ll change. I have no reason to believe he’s going to change his mind.”

The administration is being deluged with demands from its own political allies to relax its policy. The same two top Republican lawmakers who shepherded Trump’s tax-cut achievement through Congress, Kevin Brady and Orrin Hatch, have pleaded for revisions.

A senator of a border state said he’s already hearing from businesses at home. Angus King, an Independent senator from Maine, compared Trump’s plan to the devastating U.S. tariffs of the 1930s. He said companies in his state fear price increases for steel.

King said any trade actions should be targeted to discourage Chinese dumping  not hit the entire world.

“You want to do these kinds of things with a scalpel  not a chainsaw,” King told NBC.

To apply the tariffs, the U.S. is invoking a rarely used clause in a 1962 trade law that allows the president to declare tariffs if required by national security. The White House argues that the wording is broad, and that national security also could include employment and economic stability of the domestic steel industry.

“I don’t think we need to block Canadian steel in the name of national security. They’re annoying. You know, they’re too nice. But we don’t fear a war with Canada,” King said.

Every host of the big weekly U.S. talk shows raised the Canada angle.

Fox News’s Chris Wallace asked how the White House can possibly justify using a national security excuse for imposing tariffs on a close NATO partner, and legal member of the U.S. military-industrial complex.

CNN’s Jake Tapper asked Navarro to imagine how Canada might see this: “From the perspective of Canada … Canada would say, ‘National security exemption? We fight with you in every war. Our soldiers are right next to your soldiers in every conflict. What possible scenario could you envision where we wouldn’t supply you with steel and aluminum?’”

But the general response from Trump officials was that everyone should prepare for tariffs. When Navarro was asked on Fox whether Trump would exclude anyone, he responded in the negative.

“That’s not his decision,” Navarro replied.

“As soon as he starts exempting countries he has to raise tariffs on everybody else. As soon as he exempts one country his phone starts ringing from the heads of state of other countries.”

He added more details in an interview with CNN: “Canada’s 40 per cent of the (American aluminum) market. If you exempt Canada, then you have to put big, big tariffs on everybody else. So this is a measured, targeted approach.”

He was repeatedly pressed on the Canada issue in these interviews. Navarro did leave out the possibility of certain industries being exempted.

The issue has sparked a ferocious debate within the White House. Last week, it appeared Trump had frozen out the free-traders in his office and made this announcement with the support of hawks like Navarro.

American press reports have also described the president feeling angry and isolated in recent days. His administration has been hit with resignations, infighting and conflict-of-interest allegations involving the president’s own son-in-law, Jared Kushner.

A South Carolina Republican called it folly.

Sen. Lindsey Graham mentioned the Volkswagen and BMW plants in his state and expressed fear of how a trade war might affect jobs there. He said there’s reason to pursue China for intellectual-property theft and product dumping, but this is hitting all the wrong targets.

He addressed Trump directly in his interview on CBS’s “Face The Nation.”

“You’re letting China off the hook,” Graham said.

“You’re punishing the American consumer and our allies. You’re making a huge mistake here. Go after China  not the rest of the world.”

 

 

Statement by Canada on steel and aluminum

From Global Affairs Canada

March 1, 2018 – Ottawa, Ontario – Global Affairs Canada

The Honourable Chrystia Freeland, Minister of Foreign Affairs, today issued the following statement:

“As a key NORAD and NATO ally, and as the number one customer of American steel, Canada would view any trade restrictions on Canadian steel and aluminum as absolutely unacceptable.

“Any restrictions would harm workers, the industry and manufacturers on both sides of the border. The steel and aluminum industry is highly integrated and supports critical North American manufacturing supply chains. The Canadian government will continue to make this point directly with the American administration at all levels.

“Canada is a safe and secure supplier of steel and aluminum for U.S. defence and security.  Canada is recognized in U.S. law as a part of the U.S. National Technology and Industrial Base related to national defence.

“The United States has a $2-billion surplus in steel trade with Canada. Canada buys more American steel than any other country in the world, accounting for 50% of U.S. exports.

“It is entirely inappropriate to view any trade with Canada as a national security threat to the United States.  We will always stand up for Canadian workers and Canadian businesses.  Should restrictions be imposed on Canadian steel and aluminum products, Canada will take responsive measures to defend its trade interests and workers.”