Trade Cases

Trump Tweets Plan to Double Tariffs on Turkey

August 13, 2018

In a surprising tweet on Friday, President Trump announced his intentions to double the Section 232 tariffs on steel and aluminum from Turkey, raising the tax on imports to 50 percent for steel and 20 percent for aluminum. No word on when the change would take effect.

“I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!” the president tweeted.

“Since the imposition of the Section 232 tariff in March, exports to the United States have declined and domestic capacity utilization has increased, but not to levels sufficient to remove the threat to national security,” said Secretary of Commerce Wilbur Ross in a statement following the president’s announcement. “Doubling the tariff on imports of steel from Turkey will further reduce these imports that the department found threaten to impair national security as defined in Section 232.”

Turkey is the world’s eighth-largest steel exporter, with exports totaling 16.2 million metric tons in 2017. The United States received the largest share of Turkey’s steel exports last year at 1.7 million metric tons, according to International Trade Administration data.

Mills and traders handling Turkish steel are “in a state of shock,” said one Steel Market Update source, a Turkish trader. No one will buy Turkish steel going forward, he said. There could be as many as 10 vessels with steel cargoes on the water headed for the United States. The importers of record who must pay the duties are scrambling to determine what to do with the material already on route, as well as orders on the books. “This is very dangerous for the U.S. market,” he added.

Relations between the United States and Turkey have been strained. In retaliation for the original U.S. tariffs on steel and aluminum earlier this year, Turkey imposed tariffs on $1.78 billion worth of U.S. imports. Tensions between the two countries worsened when the U.S. imposed sanctions on Turkish ministers over the jailing of an American pastor on espionage charges related to an attempted coup in July 2016.

President Trump’s tweet cites the dramatic weakening of the Turkish lira, which puts American exports at a disadvantage and makes Turkish goods cheaper in the U.S. But perhaps he also sees an opportunity to pressure Turkey to release an innocent American citizen. Opponents of the president’s action will no doubt call it illegal, claiming that currency fluctuations and hostage negotiations stray too far from the original intent of Section 232, which is to safeguard national security.