February 23, 2018 / 2:00 AM / 10 months ago

U.S. defence department says prefers targeted steel, aluminium tariffs

FILE PHOTO: A worker helps load steel bars onto a truck at warehouse in Tangshan in China's Hebei Province August 3, 2015. REUTERS/Damir Sagolj/File Photo

WASHINGTON (Reuters) - The U.S. Defense Department has voiced support for the Trump administration’s bid to impose national security restrictions on imports of steel and aluminium, although it would prefer a system of targeted tariffs and a delay for import curbs on aluminium.

The Commerce Department on Feb. 16 recommended that President Donald 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.

U.S. Defense Secretary James Mattis said he was concerned about the potential impact of the proposed measures on U.S. 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 posted on Thursday on the Commerce Department website.

In the memo, which referenced a December interagency review of the commerce recommendations, he said that since direct defence needs account for only about 3 percent of U.S. production, the proposed curbs would not damage the Pentagon’s ability to get steel and aluminium to meet national defence requirements.

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

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

Commerce Secretary Wilbur Ross said last week that Trump would have the final say on what measures to adopt.

Reporting by David Lawder and David Chance; Editing by Sandra Maler and Clarence Fernandez

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