US commerce secretary Wilbur Ross on February 16 released a report on the investigation into the impact on national security from imports of steel mill products and from imports of wrought and unwrought aluminium. President Trump must now decide whether to impose tariffs –a move which would be sure to anger China.

“I am glad that we were able to provide this analysis and these recommendations to the president,” said secretary Ross. “I look forward to his decision on any potential course of action.”

The Department of Commerce found that the quantities and circumstances of steel and aluminium imports “threaten to impair the national security”.

The reports are currently under consideration by President Trump, and no final decisions have been made with regard to their contents. Trump is required to make a decision on the steel recommendations by April 11 2018, and on the aluminium recommendations by April 19 2018.

Key Findings of the Steel Report include: the United States is the world’s largest importer of steel, and its imports are nearly four times its exports; six basic oxygen furnaces and four electric furnaces have closed since 2000 and employment has dropped by 35% since 1998; world steelmaking capacity is 2.4 billion metric tonnes, up 127% from 2000, while steel demand grew at a slower rate.

Other key findings were: the recent global excess capacity is 700 million tonnes, almost seven times the annual total of US steel consumption. China is by far the largest producer and exporter of steel, and the largest source of excess steel capacity. Their excess capacity alone exceeds the total US steelmaking capacity; in an average month, China produces nearly as much steel as the US does in a year.

As of February 15 2018, the US had 169 antidumping and countervailing duty orders in place on steel, of which 29 are against China, and there are 25 ongoing investigations.

As a result of the findings, secretary Ross has recommended to the President that he consider the following alternative remedies to address the problem of steel imports:

A global tariff of at least 24% on all steel imports from all countries, or a tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or a quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.

Each of these remedies is intended to increase domestic steel production from its present 73% of capacity to approximately an 80% operating rate, the minimum rate needed for the long-term viability of the industry. Each remedy applies measures to all countries and all steel products to prevent circumvention. At the same time there was also an investigation into aluminium imports.

Secretary Ross has recommended to President Trump three alternative remedies for dealing with the excessive imports of aluminium. These would cover both aluminium ingots and a wide variety of aluminium products.

A tariff of at least 7.7% on all aluminium exports from all countries, or a tariff of 23.6% on all products from China, Hong Kong, Russia, Venezuela and Vietnam. All the other countries would be subject to quotas equal to 100% of their 2017 exports to the United States, or a quota on all imports from all countries equal to a maximum of 86.7% of their 2017 exports to the United States.

Each of the three proposals is intended to raise production of aluminium from the present 48% average capacity to 80%, a level that would provide the industry with long-term viability. Each remedy applies measures to all countries and all steel products to prevent circumvention.