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US defense department prefers targeted tariffs

MALLEABLE POWER:US Secretary of Defense James Mattis is urging the US president to use restrictions on aluminum to coerce better behavior from ‘bad’ states

Reuters, WASHINGTON

The US Department of Defense (DOD) has voiced support for US President Donald Trump administration’s bid to impose national security restrictions on imports of steel and aluminum, although it would prefer a system of targeted tariffs and a delay for import curbs on aluminum.

The US Department of Commerce on Feb. 16 recommended that Trump impose stiff curbs on steel imports from China and other countries and offered the three options to the president, who has yet to make a decision.

US Secretary of Defense James Mattis said he was concerned about the potential effect of the proposed measures on US allies, adding that was the reason he preferred targeted tariffs.

“DOD believes that the systematic use of unfair trade practices to intentionally erode our innovation and manufacturing industrial bases poses a risk to our national security,” Mattis wrote in an undated memorandum on the commerce department Web site on Thursday.

In the memo he said that since direct defense needs to account for only about 3 percent of US production, the proposed curbs would not damage the Pentagon’s ability to get steel and aluminum to meet national defense requirements.

However, while Mattis recommended that the tariffs on steel should proceed, the administration should wait before pressing ahead with the measures on aluminum.

“The prospect of trade action on aluminum may be sufficient to coerce improved behavior of bad actors,” the department said.

US Secretary of Commerce Wilbur Ross on Thursday said he expects Trump to take a thoughtful approach to deciding on possible restrictions for steel and aluminum imports. Trump has to make a decision on those recommendations for steel imports by April 11 and on aluminum by April 19.

Commerce’s range of recommendations included a 24 percent global steel tariff or a 53 percent charge on steel from a dozen nations, while capping other countries at last year’s import levels. It also proposed a 7.7 percent tariff on aluminum imports, or a 23.6 percent charge on aluminum from five places including China and Russia, while limiting other countries at last year’s import levels.

Additional reporting by Bloomberg

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