In an undated memo from the Department of Defense (DoD) to the Department of Commerce that was released last night, DoD concurred with Commerce’s recent Section 232 reports on steel and aluminum that have been submitted to President Trump for review. DoD agreed that “imports of foreign steel and aluminum based on unfair trading practices impair the national security” but noted that U.S. military requirements for steel and aluminum only represent approximately 3 percent of U.S. production and would not impact DoD’s ability to acquire necessary product to meet national defense demands.

Overall, DoD focused on the potential “negative impact” of Commerce’s recommendations (i.e., tariffs and quotas) on key allies. DoD recommended that an inter-agency working group be convened to “further refine the targeted tariffs, so as to create incentives for trade partners to work with the U.S. on addressing the underlying issue of Chinese transshipment.” If the president takes action on steel, DoD suggested “waiting before taking further steps on aluminum.” The delayed action on aluminum “may be sufficient to coerce improved behavior of bad actors.” DoD emphasized that the United States needed to “reinforce to our key allies that these actions are focused on correcting Chinese overproduction and countering their attempts to circumvent existing antidumping tariffs – not the bilateral U.S. relationship.”