ASA: Potential Steel Tariffs Raise Potential for Retaliation against U.S. Soybeans

February 24, 2018

Following reports from Commerce Secretary Wilbur Ross that the department will recommend tariffs on imported steel and aluminum as a result of its ongoing investigation under Section 232 of the Trade Expansion Act of 1962, soybean farmers have voiced their concern about the potential for retaliation against U.S. soybean imports by the Chinese.

The American Soybean Association (ASA) has repeatedly noted the potential for retaliation by China, which purchases approximately one third of the soybeans grown in the United States at a value of more than $14 billion. ASA President and Iowa farmer John Heisdorffer issued the following statement:

“Today’s news from the Commerce Department is very concerning for soybean farmers. China is not only our largest customer, it purchases more than all our other customers combined. Add to that the sobering fact that our capable competitors in Brazil and Argentina are all too happy to pick up whatever slack we leave in supplying the Chinese market, and these potential tariffs have the potential to make life very hard for soybean farmers. In earlier conversations about potential tariffs under Section 232, the Chinese specifically identified U.S. soybeans as a target for retaliation, and the barriers that retaliation would create will add significant further injury to an already-hobbled farm economy. Prices are down 40 percent and farm income is down 50 percent, and we simply can’t afford for those numbers to get worse. Soybean farmers look to the White House to move forward with a China strategy that strengthens the competitiveness of our domestic industries while at the same time growing our export opportunities.”


The U.S. Department of Commerce is undergoing a Section 232 investigation regarding steel and aluminum. Section 232 investigations are initiated to determine the effects of imports of any articles on U.S. national security. In this case, the Commerce Department is determining the effect of steel imports on the national security. Generally, steel products fall into one of the following five categories (including but not limited to): Flat products, long products, pipe and tube products, semi-finished products, and stainless products. Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862) authorizes the Secretary of Commerce to conduct these comprehensive investigations. The Secretary initiated the investigation on steel imports in light of the large volumes of excess global steel production and capacity. Steel is used in a variety of commercial, infrastructure and defense applications. By law, the Secretary of Commerce has 270 days to present the Department’s findings and recommendations to the President. Within 90 days after receiving the report from the Secretary, if the Secretary finds that an import threatens to impair U.S. national security, the President shall determine whether he concurs with the Department’s finding and, if so, the nature and duration of the action that must be taken to “adjust” the imports of the article and its derivatives so that such imports will not threaten to impair the national security. Under Section 232, the President has broad power to impose trade remedies such as tariffs and quotas.

As reported in The Hagstrom Report, the proposed tariff levels from the Commerce Department are as follows:

On steel:
1. A global tariff of at least 24 percent on all steel imports from all countries, or;
2. A tariff of at least 53 percent 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 percent of their 2017 exports to the United States, or;
3. A quota on all steel products from all countries equal to 63 percent of each country’s 2017 exports to the United States.

On aluminum:
1. A tariff of at least 7.7 percent on all aluminum exports from all countries, or;
2. A tariff of 23.6 percent on all products from China, Hong Kong, Russia, Venezuela and Vietnam. All the other countries would be subject to quotas equal to 100 percent of their 2017 exports to the United States, or;
3. A quota on all imports from all countries equal to a maximum of 86.7 percent of their 2017 exports to the United States.

This blog post is brought to you by the South Dakota Soybean Association.