Thirty-one steel executives from 25 U.S. steel and steel-related companies urged President Donald Trump to take immediate and decisive action under Section 232 of the Trade Expansion Act of 1962 to curb “surging” steel imports. In a letter dated Aug. 23, executives said efforts to combat overcapacity through mechanisms like the G-20 and the Organization for Economic Cooperation and Development haven’t worked. “Under your bold leadership, Mr. President, with your vision for ‘America First,’ this can and must change,” they wrote. “In June, steel imports hit their highest monthly total in more than two years by capturing 30% of the U.S. market. Immediate action must meaningfully adjust imports to restore healthy levels of capacity utilization and profitability to the domestic industry over a sustained period.”
President Donald Trump on Aug. 14 issued a memorandum directing U.S. Trade Representative Robert Lighthizer to determine whether to investigate Chinese “laws, policies, practices, or actions” that might be harming U.S. intellectual property rights, innovation or technological development. The memo pointed to language in the Trade Act of 1974 that requires the Office of the U.S. Trade Representative to undertake several requirements in self-initiating an investigation under Section 301 of that law. Section 301 gives the president broad authority, including import duties, to retaliate against restrictions found to “burden or restrict” U.S. commerce.
A mix of “creative cases” is needed to remedy trade violations created by Chinese industrial overcapacity, including Section 301 investigations and self-initiating antidumping and countervailing duty cases, Gilbert Kaplan, President Donald Trump’s nominee to be under secretary of Commerce for international trade, told the Senate Finance Committee Aug. 3. “I think it’s time maybe to dust off … Section 301,” he said. Section 301 of the Trade Act of 1974 allows the president to take all "appropriate and feasible steps" to eliminate “unreasonable restrictions” of countries found to “burden or restrict” U.S. commerce. The statute authorizes the executive branch to retaliate against these restrictions as well as anti-competitive subsidies through duties, other import restrictions and withholding trade agreement benefits.
Twenty-three House lawmakers signed a letter this week to President Donald Trump urging him to exempt tinplate steel and aluminum for food packaging in any import restrictions initiated to the administration’s ongoing Section 232 national security reviews of steel and aluminum imports, the office of Rep. Don Bacon, R-Neb., announced. “The domestic canned food supply chain and flexible packaging industry generates more than $100 billion in total economic activity in the U.S. and employs tens of thousands of American workers,” Bacon said in a statement. “This industry provides some of the safest, most affordable food available to consumers today. We will continue to keep pressing for what we believe is right for America and our constituents.” Tinplate steel composes about 60 percent of the cost of a can, meaning a tariff even as low as 5 percent would raise the cost of goods by 4.2 cents each, “inevitably” passing along higher expenses to consumers, the announcement says.
United Steelworkers (USW) in a statement urged the Trump administration to hurry up in taking Section 232 action against steel imports, after “news reports” indicated that the executive branch is delaying the conclusion of its ongoing investigation. "Delay is devastating,” USW International President Leo Gerard said in a statement. “Since the President announced an investigation in April, attacks on the U.S. steel sector have skyrocketed, with imports up 18%. Trading partners have targeted the U.S. market for fear that the United States will finally stand up for its producers and workers and protect our national security.” Gerard said enough “time, attention, and investigation” have passed for the administration to “know what needs to be done.” Started in April, the Commerce Department-led investigation could result in tariffs and/or quotas if it finds steel imports threaten national security.
The July 19 U.S.-China Comprehensive Economic Dialogue ended with no bilateral joint statement and canceled press conferences by both countries, a Commerce Department spokesman confirmed. Such bilateral dialogues usually produce a joint statement of commitments by both countries. The last iteration of U.S.-China economic dialogues, dubbed the U.S.-China Strategic & Economic Dialogue, under the Obama administration in 2016 ended in a joint fact sheet stating China’s agreement not to initiate new efforts to boost steel capacity (see 1606080041).
Nine domestic industry groups urged Commerce Secretary Wilbur Ross on July 18 to persevere with the Trump administration’s Section 232 investigations on steel and aluminum, despite “vague speculation” about trade retaliation. “Global trade has been nonreciprocal, in part, because past administrations have wrongly viewed enforcement of trade rules as protectionism even as other countries made full use of those rules,” the groups said in a July 18 letter (here). The 1994 General Agreement on Tariffs and Trade allows countries to protect national security, and the World Trade Organization system prevents any “uncontrollable trade retaliation” for using the provision. There have been no such retaliatory countermeasures leveled against nations that assess trade measures based on national security, the groups wrote.
International Trade Today is providing readers with some of the top stories for July 10-14 in case they were missed.
President Donald Trump this week said he might level tariffs and quotas on steel imports, apparently referring to the ongoing Commerce Department-led Section 232 investigation on imports of the metal, according to a White House transcript of remarks to reporters aboard Air Force One released July 13. Trump said “there are two ways” to stop dumped steel imports from China and elsewhere. “Maybe I’ll do both,” he said. “They're dumping steel. Not only China, but others. We're like a dumping ground, OK? They're dumping steel and destroying our steel industry; they've been doing it for decades, and I'm stopping it. It'll stop.” Trump said he has been “going a little bit easier” on any trade-related measures against China “because I’d like to have their help.”
Fifteen former chairpersons of the President’s Council of Economic Advisers sent a letter (here) to President Donald Trump on July 12 urging his administration not to impose tariffs on steel pursuant to the ongoing Commerce Department-led Section 232 investigation into steel imports. “Among us are Republicans and Democrats alike, and we have disagreements on a number of policy issues,” they said. “But on some policies there is near universal agreement. One such issue is the harm of imposing tariffs on steel imports.” The former officials cited “media reports” indicating Trump is considering using his Section 232 authority to impose tariffs on steel because of a “putative threat to national security.” Top source steel countries are allies, including Canada, Mexico, South Korea and Brazil, and higher tariffs would likely harm U.S. relations with “these friendly nations,” after Canadian, United Kingdom, EU, German and Dutch officials have already expressed concerns about possible results of the probe, they said.