US to Up Steel Duties to 25%

· Aluminium may be Hiked to 10%

· National Security Cited as Ground for Proposed Action under Sec.262 of Trade Expansion Act, 1962

· EU Upset as Steel from China may be Diverted to its Ports

President Donald Trump on announced he would impose steep tariffs on imported steel and aluminum, sparking outraged threats of reprisals from countries around the world. Republican lawmakers, and fears of massive job losses across the rest of the U.S. economy.

Trump said after a White House meeting with steel and aluminum executives that he plans to impose next week the toughest of the three remedies proposed by the Commerce Department, a 25 percent tariff on steel imports and 10 percent on aluminum. The recommendations came after the department found that the underperforming U.S. steel and aluminum sector posed a threat to national security.

The decision to embrace a tough, protectionist trade policy fulfills a campaign pledge to steelworkers who’d grown frustrated with the slow pace of protection. But it also comes at a time when the embattled president, beset by personnel departures at the White House and intensifying investigations into his possible collusion with Russia, is lashing out.

Many inside the administration advised against the measures, which will make manufactured products more expensive for all Americans and which could lead to big job losses. William Dudley, the president of the Federal Reserve of New York, made a last-ditch appeal for free trade in a speech in Brazil early Thursday.

“Although protectionism can have a siren-like appeal because of its potential to provide short-term benefits to particular segments of the economy, in the longer term it would almost certainly be destructive,” he said.

China Threatens Retaliation

China’s foreign ministry criticized the “unreasonable and excessive” use of trade remedies, and said Beijing “will take necessary measures to safeguard its legitimate rights and interests.” When Trump earlier slapped tariffs on solar panels and washing machines, China retaliated by threatening U.S. sorghum exports; many fear U.S. soybean exports to China will be next in the crosshairs.

U.S. allies were equally upset. “We strongly regret this step, which appears to represent a blatant intervention to protect U.S. domestic industry and not to be based on any national security justification,” said European Commission President Jean-Claude Juncker. (The United States uses about 3 percent of its domestic steel production for defense purposes, and most of what it does import it gets from allies, making the national security justification for tariffs far-fetched for most trade experts.)

Juncker promised quick European action to punish U.S. exports in response.

“We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk,” he said. “The EU will react firmly and commensurately to defend our interests,” with both retaliatory tariffs on U.S. exports and safeguards to ensure that metal pushed out of the American market doesn’t flood Europe.

India May not be Affected??

India does not expect any immediate impact from US President Donald Trump's decision to impose curbs on steel imports, the Steel Ministry's top bureaucrat said on Friday. Trump announced on Thursday he would impose hefty tariffs on imported steel and aluminium to protect US producers, risking retaliation from major trade partners including China, Europe and neighbouring Canada.

“We have only 2 per cent of our exports to US so no immediate dent, but validity of Section 232 is stretched to be used as tariff barrier,” Steel Secretary Aruna Sharma told Reuters, referring to the US trade clause being invoked. The Trade Expansion Act of 1962, Section 232(b) gives the US the ability to investigate whether certain imports, or high levels of certain imports, pose a threat to national security.