U.S. defense department says prefers targeted steel, aluminum tariffs

Workers arrange steel rims for export at a wheel factory in Lianyungang, Jiangsu province, China November 22, 2017. China Daily via REUTERS

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 aluminum, although it would prefer a system of targeted tariffs and a delay for import curbs on aluminum.

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 defense 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 aluminum to meet national defense requirements.

But 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.

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