US steel-users, lawmakers seek more tariff exclusions

Pittsburgh (Platts)--8 Mar 2018 1045 pm EST/345 GMT

While the tariffs on steel signed by US President Donald Trump on Thursday were less aggressive than the 25% blanket tax on all imports announced last week, steel users and lawmakers continue to voice concerns about the sweeping scope of the order.

Trump on Thursday said that Canada and Mexico would not be included initially in the 25% tariff on steel imports and 10% tariff on aluminum imports, and left the door open to other potential exceptions following an approval process set up by the administration.

"Clearly President Trump has listened to Congress and job-creators all over America by improving the original proposal to create a path to allow fairly traded steel and aluminum to be excluded country-by-country and business-by-business," House Ways and Means Committee Chairman Kevin Brady said in a statement.

Related feature: Trump's steel and aluminum import tariffs

Brady and 106 of his fellow Republicans from the House of Representatives sent a letter to Trump just a day earlier urging him to rethink his plan for implementing tariffs.

"Exempting Canada and Mexico is a good first step, and I urge the White House to go further to narrow these tariffs so they hit the intended target and not US workers, businesses, and families."

In a joint statement, Roy Hardy, president of the Precision Metalforming Association, and Dave Tilstone, president of the National Tooling and Machining Association, said their groups continue to oppose the tariffs on steel and aluminum announced Thursday.

"These tariffs will damage downstream US steel and aluminum consuming companies, as the US will become an island of high steel prices that will result in our customers simply sourcing our products from our overseas competitors and importing them into the US tariff-free," they said. "We continue to encourage the President to consider the entire manufacturing sector -- both upstream and downstream companies."

Leading up to Thursday's announcement, pipeline companies have argued that tariffs would be a detriment to their industry as the large diameter, thick-walled steel used for natural gas transmission lines is a specialty product with limited domestic capacity. "It is too early to say whether our members will seek exemptions or what effect exemptions may have on line pipe availability," said Don Santa, president and CEO of the Interstate Natural Gas Association of America.

"Much of the imported pipeline steel comes from America's allies," he added, noting that about 65% of high-strength plate/coil imports and large-diameter line pipe imports are from NATO countries.

The proportion grows to about 80% when adding treaty nations, such as Japan and South Korea, he added. The Center for Liquefied Natural Gas said it was "deeply disappointed" by the action Thursday.

"When imposed, these tariffs will place over $100 billion dollars of investment in US LNG in jeopardy, kill jobs and damage valuable trade relationships with allies," said Charlie Riedl, executive director of the trade group.

In addition to the steel needed for large pipelines to supply natural gas to LNG export terminals, he said steel is an essential component to the LNG projects themselves, and some of the specialty steel is not made in the US.

The automotive industry also reiterated its concerns regarding steel tariffs.

"Our position on tariffs is clear: Tariffs will be detrimental to the jobs that the motor vehicle parts supplier industry created," the Motor & Equipment Manufacturers Association said in a statement.

"While we support the administration's focus on strong domestic steel and aluminum markets, tariffs will limit access to necessary specialty products, raise the cost of motor vehicles to consumers, and impair the industry's ability to successfully compete globally.

"While the exclusion of Canada and Mexico may help mitigate negative effects in the short term, tariffs on steel and aluminum would hurt the largest sector of manufacturing jobs in the U.S., putting the well-being of many Americans -- and the nation's economic security -- at risk. We are disappointed that President Trump chose to disregard our message and sign a proclamation today allowing these tariffs to take effect."

Even with limited exemptions, the tariffs on steel will raise the sale prices of new vehicles, Cody Lusk, president and CEO of the American International Automobile Dealers Association, said in a statement.

"Dealers remain concerned that any new tariffs could trigger a tit-for-tat trade war, crippling an already flat auto sales market ... While the possibility of exemptions is a positive sign that trade dialogue is ongoing within the Trump administration, America's international nameplate auto dealers and their 577,000 employees are hopeful for a tariff-free resolution that will allow their businesses to grow."

--Justine Coyne,

--Edited by Lisa Miller,

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