After thousands of steelworker layoffs across the country, the U.S. government is acting to impose some of the biggest tariffs in recent years on steel imports from seven countries, including massive 266 percent duties against Chinese cold-rolled steel.
That's the largest steel tariff in some time, even eclipsing the 235.66 percent the federal government is looking at imposing on hot-rolled coil from China.
U.S. Steel stock rose 23 percent by afternoon in trading Wednesday on the New York Stock Exchange. ArcelorMittal stock was up 13 percent.
The United States Department of Commerce this week preliminarily found that Brazil, China, India, Japan, Korea, Russia and the United Kingdom have all been dumping cold-rolled steel or selling it for less than its fair-market value. Final determinations are expected in May for China and Japan, and in July for the remaining countries.
"Today's decision comes as welcome news to the steelworkers at American steel mills who produce the cold-rolled flat steel products,” USW International President Leo Gerard said. "It is one step forward in the fight by USW-represented members and the companies to make our nation's trade policies work better for working Americans."
A J.P. Morgan analyst called it a "win" for domestic steel stocks. U.S. Steel stock, which had been trading at a 100-year low in January, rose to over $11 a share in Wednesday trading. It had traded below $7 per share at times in January. ArcelorMittal stock, which has traded for as little as $2.93 a share over the past year, jumped to more than $4.50 a share.
The U.S. Department of Commerce found Brazilian steelmakers should face tariffs of up to 38.93 percent, Chinese steelmakers up to 265.79 percent and Indiana steelmakers up to 71.35 percent. Japan faces duties of up to 6.78 percent, Korea up to 6.89 percent, Russia up to 16.89 percent and the United Kingdom of up to 28.03 percent.
Anyone trying to import cold-rolled steel from those countries will have to pay cash upfront for the tariffs to the U.S. Customs and Border Protection.
Back in July, ArcelorMittal, U.S. Steel, AK Steel, Steel Dynamics and Nucor petitioned for the tariffs on cold-rolled steel, alleging it was being dumped for less than it's market value. They've also filed trade cases against hot-rolled and corrosion-resistant steel.
They say that as a result of unprecedented imports more than 12,000 steelworkers have been laid off or could be laid off from plants in Northwest Indiana, Ohio, Michigan, Minnesota, Pennsylvania, Alabama and Kentucky.
"In addition to steelworkers, the steel import crisis hurts families, communities, and our national economic security," Gerard said. "Steel has literally been the backbone of our great nation from the railroads that span America to the iron girders that support our office buildings, schools and bridges. Today’s ruling is just one step in the fight to restore fair trade conditions for American-made cold-rolled steel products."
The USW said the record 29 percent market share for imports last year was the result of failed trade policies, and weak enforcement.
"Multiple steel producing countries are taking nearly one-third of the domestic market," USW International Vice President Tom Conway said. "Instead of making steel in an improved economy, American steelworkers and iron ore miners are on extended layoffs and our companies are losing market share with idled facilities."