Do You Know about Section 232?

Originally titled 'Do You Know about Section 232? '

If you are not already familiar with Section 232, now is a good time to get informed about any impact it may have on tool steel and aluminum. Here are some key facts from the recent 232 Report in Coordination with White House.

After speaking with some tool steel suppliers at a recent industry conference, I was given some insight into the recent Section 232 Report that hit the desk of the President last week, which may impact moldmakers. Section 232 of the 1962 Trade Act allows the president to impose tariffs without congressional approval, which involves steel and aluminum imports.

Here are some key facts from the report you may want to consider: 

  1. State of global steel production: “The recent global excess capacity is 700 million tons, almost 7 times the annual total of U.S. steel consumption. China is by far the largest producer and exporter of steel, and the largest source of excess steel capacity. Their excess capacity alone exceeds the total U.S. steelmaking.” – Secretary Ross Releases Steel and Aluminum 232 Reports in Coordination with White House Feb | 16 | 2018
  2. Recommended remedies to address steel imports: (1) A global tariff of at least 24% on all steel imports from all countries, or (2) A tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or (3) A quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States. -Secretary Ross Releases Steel and Aluminum 232 Reports in Coordination with White House Feb | 16 | 2018
  3. Domestic steel production goal: “They (U.S. government) want to increase domestic steel production in this country from 73% to 80%. This is the level at which the steel industry can have long-term viability.” – Secretary Ross Releases Steel and Aluminum 232 Reports in Coordination with White House Feb | 16 | 2018

With these three key points in mind—and admitting that I do not have the answers—are these questions moldmakers should be asking?

  • Why are we not producing more steel and aluminum in the U.S.?
  • Will these proposed tariffs and quotas in Section 232, on which President Trump will “make a decision” by April 11, 2018, in any way affect the cost of steel and aluminum that is used to make a mold?
  • If it does, will moldmakers be able to pass that increased cost along or will it cut their profit margins?
  • I was told that domestic steel producers immediately raised their prices after the November tariffs because they could now compete at a higher price. Can we expect the same this time around?
  • Could all of this impact the reshoring of mold and die making that has been happening?

I recommend reading the attached reports and then calling your local representative to see if they are up to speed on this matter.


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