The White House says it will impose tariffs of 25 percent on steel and 10 percent on aluminum. The news came after President Donald Trump hosted more than a dozen executives from the steel and aluminum industries at the White House this morning.
Here’s what you need to know as this story develops:
It’s true that the U.S. steel and aluminum industries have been hurt by imports. Imports make up about one-third of the 100 million tons of steel consumed by U.S. automakers, appliance manufacturers and other industries annually. Imported aluminum is even more pervasive: More than 90 percent of the 5.5 million tons of aluminum used in the United States is imported.
Overcapacity in China is a problem. China’s excess steel capacity exceeds the total U.S. steelmaking capacity, according to the Commerce Department. Globally, steelmaking capacity has grown 127 percent since 2000 — far faster than demand for steel.
But China is not the main source of U.S. imports. China is not a top 10 supplier of either steel or aluminum. Canadian aluminum made up more than half of American imports of the metal in 2016. Canada also made up the largest share of American steel imports in 2016 — 17 percent.
Whether this is a matter of national security is up for debate. The Commerce Department concluded in a recent report that imports of steel and aluminum “threaten to impair the national security.” The Department of Defense, though, points out that most U.S. imports are produced by U.S. allies, including South Korea, and Turkey, which would be hurt by broad tariffs. The U.S. military requires only about 3 percent each of U.S. production of steel and aluminum.
Anyway, the horse may have left the barn on this one. Experts say U.S. domestic production could not be ramped up nearly enough to eliminate imports. And far more people work in industries that consume steel, as opposed to producing it. In 2015, steel mills employed about 140,000 Americans, according to 2015 census data. But manufacturers who make things using steel employ 6.5 million Americans.
There are real economic risks to broad tariffs. Some trade experts argue that the tariffs would be illegal under international law. And other nations already are threatening retaliatory tariffs, which would make U.S. exports more expensive to consumers overseas.