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International Relations

US to impose tariffs on steel and aluminum imports, Trump says

China in crosshairs of measure addressing national security concerns

A laborer works at a steel plant of Shandong Iron & Steel Group in China's Shandong Province in July 2017.   © Reuters

WASHINGTON/BEIJING -- President Donald Trump said Thursday that the U.S. will impose import tariffs of 25% on steel and 10% on aluminum.

The duties, brought up at a meeting with industry leaders, are expected to cover a wide range of products made abroad. Global steelmakers will be affected, although imports from China are seen as the main target. An official announcement will come next week.

The imports have been deemed a threat to national security, a basis for imposing restrictions under Section 232 of the Trade Expansion Act of 1962. This marks the provision's first use since the U.S. banned oil imports from Libya in 1982.

The Commerce Department said in February that increased imports of steel and aluminum are weakening the economy and already pose a security risk, given that the metals are used in sensitive fields like defense.

U.S. Trade Representative Robert Lighthizer wrote in a report Wednesday that "China has appeared to be moving further away from market principles in recent years" and that "as a sovereign nation, China is free to pursue whatever trade policy it prefers." But the U.S., "as a sovereign nation, is free to respond," he added.

"Under President Trump's leadership, we will use all available tools to discourage China -- or any country that emulates its policies -- from undermining true market competition," Lighthizer warned.

Trump chimed in Thursday morning on Twitter. "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," he tweeted.

U.S. President Donald Trump announced the tariffs on steel and aluminum imports during a meeting at the White House.   © Reuters

The tariff announcement comes as Trump tries to rally his base ahead of this fall's midterm congressional elections by making good on promises to protect American industry and create jobs. He has the final say on what import restrictions are put in place.

Although unilateral restrictions on imports are prohibited by the World Trade Organization, measures in the name of national security are an exception. Yet few countries have imposed them, in light of potential abuse.

China, meanwhile, has made a last-ditch effort to ease the trade tensions by dispatching top officials to Washington.

President Xi Jinping sent top economic adviser Liu He to visit Washington for five days to Saturday, ahead of China's annual National People's Congress meeting opening this coming Monday.

Liu He, Chinese President Xi Jinping's top economic adviser, has been sent to Washington to kick-start the bilateral economic dialogue.   © Reuters

Liu was promoted to the 25-member Politburo in October and is a top candidate for vice premier of financial and industrial policy. In that capacity, he would also likely be in charge of China's economic relations with the U.S. and other countries.

The timing of Liu's trip is unusual, since it forced him to miss part of the Communist Party's three-day third plenary session from Monday to Wednesday this week. State Councilor Yang Jiechi was also in the U.S. in early February. Chinese media noted the rarity of two top officials visiting America in one month.

Liu's trip aims to resume the comprehensive bilateral economic dialogue, according to diplomatic sources in Beijing. The talks, originally begun in July, yielded little fruit and have essentially stopped. Liu hoped to ease trade frictions by reviving the dialogue, but Washington has expressed little interest.

White House officials said Trump met with Yang but will not meet with Liu, who is expected to talk only with Treasury Secretary Steve Mnuchin and Lighthizer.

Chinese anxiety stems from an economic dependence on foreign demand. Real growth accelerated for the first time in seven years to 6.9% in 2017, thanks largely to brisk demand from abroad. But rapid growth is not anticipated in domestic investment or consumption this year, and China is ill-prepared for a major economic slowdown.

China and the U.S. are competing in more domains as the Chinese industrial structure improves, said Jin Canrong, a professor at Renmin University of China, explaining why trade friction is intensifying.

Should Washington maintain its hard line, experts say Beijing is almost certain to retaliate and could target a variety of areas, including automobiles, airplanes and such agricultural products as soybeans.

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