UPDATE: Trump says he will impose across-the-board steel tariffs of 25 percent

NWI Times

President Donald Trump told steel executives Thursday he plans to impose 25 percent tariffs on foreign-made steel across the board after a Section 232 investigation found elevated levels of imports threatened America's steel industry and national security.

"Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world. We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE!" Trump tweeted.

The move potentially could have a huge impact on the fortunes of Northwest Indiana's steel mills. While more than 160 steel tariffs already are in place, they all target individual steel producers in particular countries, while the sweeping tariffs being proposed would affect any import of steel, making imports more expensive and locally made steel more competitive.

Ten blast furnaces, including a few at ArcelorMittal Indiana Harbor in East Chicago, have closed over the last two decades as imports have skyrocketed.

U.S. Rep. Pete Visclosky, D-Gary, said action on the tariffs is overdue.

"Twice in the last 16 days, the President of the United States has said he would act on the recommendations of the Section 232 investigation that was presented to him on Jan. 11," he said. "It is time the President acted. Every day that our country waits to take decisive action is another day that threatens damage to our steel production capabilities and the livelihoods of our steelworkers and their families."

Alliance for American Manufacturing President Scott Paul agreed.

"Now it's time to act on the Section 232 investigation," he said. "We're on the brink of a potentially historic rebalance of America's trade priorities. We are confident a robust steel trade action is good for our economy. A decision to restore sanity to global steel markets will help create domestic jobs and preserve our national security. But to achieve those results, the president's enforcement action must be broad, robust and comprehensive."

But industries that consume steel have objected to the tariffs on steel and aluminum, saying they will raise prices and hurt manufacturers and consumers.

“As major users of steel and aluminum, we have been proactive in explaining to the administration that the (heating, ventilation, air conditioning and refrigeration) and water heating industry would be negatively impacted by an increase in tariffs, as would the consumers that rely on the products we manufacture,” Air-Conditioning, Heating and Refrigeration Institute President and CEO Stephen Yurek said. “While we have been pleased with the Trump Administration’s enthusiastic support for manufacturing, we believe this step to be injurious, rather than helpful, to our efforts to increase American manufacturing and create jobs."

Roy Hardy, president of the Precision Metalforming Association, and Dave Tilstone, president of the National Tooling and Machining Association, warned tariffs could hurt manufacturing companies that use steel, which employ 6.5 million compared to the 80,000 who work for the steel industry.

"The tariffs will lead to the U.S. once again becoming an island of high steel prices resulting in our customers simply importing the finished part," they said in a joint statement. "The lost business to overseas competitors will threaten thousands of jobs across the United States in the steel consuming manufacturing sector, similar to our experience in 2002 when the U.S. last imposed tariffs on steel imports. Those '201' steel tariffs resulted in the loss of 200,000 American manufacturing jobs because of high steel prices due in large part to the tariffs. President Trump campaigned on the promise to protect manufacturing jobs but by ignoring warnings from a wide range of manufacturers, his plan to impose tariffs will cost manufacturing jobs across the country."

Japan, the second largest steel producer worldwide, warned tariffs might spark a trade war.

“The 25 percent across-the-board tariff on foreign steel is ill advised and naïve," Japan Steel Information Center Chairman Tadaaki Yamaguchi said. "Rather than saving American jobs it will destroy many tens of thousands of good, well-paying manufacturing jobs from steel consuming industries. It will inevitably invite retaliation from America’s most reliable allies, ultimately hurting American non-manufacturing industries as well.”

Indiana University professor Keith Belton, the director of the School of Public and Environmental Affairs’ Manufacturing Policy Initiative, said trade policy must always balance efficiency and equality. He said any protectionist measure would have great benefits for a specific industry while slightly raising prices for everyone else, in this case steel users and consumers.

"The benefits are highly concentrated, and the costs are diffused," he said.

Steelmakers, who have suffered for years because of near-record import levels, celebrated as they expected their financial fortunes to improve.

Chicago-based Zekelman Industries, North America’s largest independent steel pipe and tube manufacturer, told its 2,300 employees they would get a $1,000 annual bonus when the tariffs take effect and for as long as they remain in effect.

"The Section 232 investigation confirmed what we have known for decades: that the domestic steel industry has been victimized by unfairly traded and dumped foreign products and the resulting damage has been both massive and a threat to impair national security," CEO Barry Zekelman said in a letter to workers. "Together, we have sacrificed and worked hard to become the best pipe and tube manufacturer in the world. The policies announced today will have a tremendous positive impact on our ability to compete and thrive. The playing field is being leveled and we will win a fair fight."