Trump signed a presidential memorandum for the Commerce Department to start the investigation under a little-used law, Section 232 of the Trade Expansion Act, which invokes national defense reasons to protect U.S. production.
President Donald Trump signs an executive memorandum on investigation of steel imports, Thursday, April 20, 2017, in the Oval Office of the White House in Washington.
“If the U.S. severely punished the Chinese steel industry, which is absolutely warranted on economic grounds for China dumping overcapacity on the world market for 15 years, how are they going to affect the demand for Australian iron ore?”
“There are far more American jobs at stake in the steel consuming sector than there are in domestic steel production and this action will put many American jobs at risk because prices will rise and competition will decline”, he said.
Trump promised as a candidate to revitalize the American steel industry, the decline of which has been especially hard on states like Pennsylvania that were crucial to his victory.
He said if the USA steel industry is deemed to be suffering from too much steel imports, he will recommend retaliatory steps that could include tariffs. Nucor’s shares were up 3.4% in midday trading, while shares for U.S. Steel and AK Steel Holding Corp. were up more than 7%. In some cases, it’s just impossible to avoid buying foreign steel because certain products and grades are not produced in the US, or supply is limited.
The current patchwork of steel-related cases brought under the World Trade Organization are “very, very limited in nature to a very, very specific product from a very, very specific country”, Ross said Thursday.
Just earlier this month, for example, U.S. Steel fell more than 9 percent, marking its worst day since June 2016.
Enter Section 232, part of Trade Expansion Act of 1962 – arguably one of the most powerful trade-restriction arrows in the quiver, but not without its limitations.
“Foreign nations are dumping vast amounts of steel all over the United States which is essentially killing our steel workers and steel companies”, Trump said on the campaign trail.
Newport added that the president’s actions will bolster the competitiveness of American steel makers and preserve domestic jobs.
Hufbauer, who served as a senior Treasury Department official under former President Jimmy Carter, said the probe reflects the thinking of Commerce Secretary Ross, a billionaire investor with close ties to the steel industry.
If the answer is yes – that this country’s defense could be jeopardized by deficiencies in its steelmaking capacity or skills – the United States could try to impose tariffs on imports. He also tweeted that China might get a better trade deal if the country helped ease tension with North Korea.
During the election, Mr Trump railed against China for “illegal export subsidies” for its steel mills and other heavy industries. “It may take an extraordinary measure, like Section 232, to make some progress and to prod China along as well”, Paul said.
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