SAN FRANCISCO (Reuters) - Shares of steel makers rallied on Wednesday after a rocky start to U.S.-China economic talks raised expectations that President Donald Trump would impose tariffs on steel imports. The S&P 1500 steel index .SPCOMSTEEL jumped 2.3 percent to its highest level since early May. U.S. Steel (X.N) rose 4.9 percent, AK Steel (AKS.N) gained 3.6 percent and Nucor (NUE.N) climbed 2.2 percent.    In opening remarks at an annual summer dialogue between Washington and Beijing, U.S. Commerce Secretary Wilbur Ross criticized China’s $347 billion trade surplus with the United States.      Ross’s comments heightened expectations on Wall Street that Trump would follow through on threats to apply new tariffs to remedy a “big problem” of steel dumping from China and others. “Investors are essentially handicapping a probability that Trump will announce a broad-based anti-dumping measure on steel imports,” said Longbow Research analyst Christopher Olin. Honoring a promise made in the 2016 election campaign, in April this year Trump initiated a “Section 232” review of the steel industry, a provision in the Trade Expansion Act of 1962 allowing for the imposition of tariffs or quotas on imports if  national security is threatened.  Steel producers in the United States, like U.S. Steel Corp and AK Steel, stand to benefit from protectionist tariffs which would enable them to raise their prices. But such tariffs would hurt U.S. manufacturers who buy steel. KeyBanc Capital Markets analyst Philip Gibbs said speculation that the Commerce Department would soon release its section 232 report was helping steel stocks. He added that potential U.S. tariffs on steel could be found illegal by the World Trade Organization. 