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Purdue research helped determine amount of steel tariffs
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Purdue research helped determine amount of steel tariffs

Indiana has been the nation's top steel-producing state for decades, and a university in Indiana did research that was used to determine protectionist measures for the U.S. steel industry.

Purdue University research was used to calculate the amount of the 25 percent, nearly worldwide steel tariffs. The tariffs have been widely controversial and resulted in retaliatory tariffs from China but they initially gave the steel industry a much-needed boost after years of struggle.

The U.S. Department of Commerce's Section 232 report cites the work of Purdue's Global Trade Analysis Project, a 25-year-old initiative that conducts quantitative analysis on global economic issues. Researchers from around the world have contributed to the West Lafayette, Ind.-based scholarly project, which also has been extensively cited by the Intergovernmental Panel on Climate Change and the Millennium Round of Multilateral Trade in Geneva in the late 1990s.

"Similar to what is anticipated under a quota, according to the Global Trade Analysis Project (GTAP) Model, produced by Purdue University, a 24 percent tariff on all steel imports would be expected to reduce imports by 37 percent (i.e., a reduction of 13.3 million metric tons from 2017 levels of 36.0 million metric tons)," the U.S. Department of Commerce stated in its Section 232 study. "This tariff rate would thus result in imports equaling about 22.7 million metric tons, which will enable an 80 percent capacity utilization rate at 2017 demand levels (including exports)."

The report cites Purdue's research six times before recommending a 24 percent steel tariff on foreign-made steel from around the world. The Trump administration ultimately decided on a 25 percent steel tariff, but then decided to exempt Canada, Mexico, the European Union, Argentina, Brazil, South Korea and Australia.

The exclusion of so many exporters, including some of the top exporters to the United States, has sent once-surging steelmaker stocks tumbling in recent days.

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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.

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