October 2017 Steel Shorts

Trump a ‘Total Paper Tiger’ on Trade, Schumer Says

Democrats are trying to pressure President Donald Trump to impose tariffs on steel imports.

Protectionism – especially for the steel industry – was a key part of Trump’s “America First” campaign and figured prominently in his early months in the White House, with an April directive launching a Section 232 investigation of the impact of steel imports on national security. The inquiry – which had been expected to be completed by June – still is not done, and Trump said in July that his administration would focus on other issues, such as health care and tax reform, before addressing trade.

As a result, Senate Minority Leader Chuck Schumer, D-N.Y., announced in late October that he would block two nominations to the Commerce Department until Trump acts to shield American steel manufacturers from imports.

“They’ve just dragged their feet and delayed and delayed,” Schumer told The New York Times. “The bottom line is the president has been a total paper tiger on this issue.”

Schumer and eight other Democratic senators wrote to Trump and Commerce Secretary Wilbur Ross on Oct. 26 to urge them to wrap up the investigation and release the report, arguing that, “our aluminum and steel workers are suffering due to the Administration’s inaction.”

“Previous statements by the President and administration officials indicating the imminent conclusion of these investigations has caused a surge in imports,” they wrote in the letter. “This surge, manufactured by the administration’s delays, has resulted in the closure of a factory and has put additional American jobs at risk. We urge you to complete these investigations as soon as possible, regardless of the legislative process on tax reform.”

Congressional Steel Caucus Urges Completion of Section 232 Investigation

The Congressional Steel Caucus is urging President Donald Trump to release a report on the impact of steel imports “as expeditiously as possible so that action can be taken to protect the American steel industry and defend our national security.”

President Donald Trump on April 20 issued a presidential memorandum directing the secretary of commerce to conduct a Section 232 investigation “to determine the effects on national security of steel imports.” While there had been indications that the investigation would be completed by June, no report has been released yet.

Lawmakers from steel-producing states have grown frustrated as Trump’s tough talk on trade has not led to concrete actions, and as his administration appears to have become more focused on other priorities.

“Without American steel, the Department of Defense would be forced to rely on foreign imports, which could become extremely dangerous during a national emergency or military conflict,” members of the caucus wrote in the Oct. 27 letter. “Therefore, a robust domestic steel industry is absolutely critical to our national security. … Each day that passes is another day that the domestic steel industry faces an onslaught of imports and the deeply harmful effects of unfair trade practices, which is why we believe the investigation must be completed as soon as possible.”

Since the investigation was announced, AIIS has engaged in an ambitious campaign to educate lawmakers, regulators, the media and the public about the benefits of steel imports and the damage that can be done by protectionist policies. Attorney Gary Horlick, for example, spoke on behalf of AIIS at a May 24 Commerce Department hearing on the issue, where he noted that “Section 232 was not intended to provide overall protection for U.S. industry,” and warned of “the certainty that other countries will retaliate against U.S. exports” if protectionist measures are implemented.

U.S. Seeks to Include Steel Requirements in NAFTA

The United States is reportedly seeking to have NAFTA require the use of steel from North America in automobiles.

Negotiations to revise the North American Free Trade Agreement (NAFTA) have been underway for several months amid threats from the Trump administration that it may simply pull out of the pact. One of the latest proposals from the United States, according to published reports, would add steel and certain other raw materials to NAFTA’s “tracing list” for auto parts. This would require automobile manufacturers seeking NAFTA’s tariff-free benefits to use steel that originates in the United States, Canada or Mexico.

In addition, the United States reportedly wants to increase the amount of overall content within an automobile that must be sourced from NAFTA countries to 85 percent, up from the current 62.5 percent, with 50 percent having to come from the United States.

Some analysts have suggested that, if added to NAFTA, these requirements could backfire for the United States, since manufacturers could choose to buy less expensive materials overseas and pay the United States’ 2.5 percent tariff on passenger vehicles.

Commerce Department Initiates Investigations of Imports of Forged Steel Fittings

The Commerce Department has initiated antidumping duty investigations of imports of forged steel fittings from China, Italy and Taiwan and a countervailing duty investigation of imports of those fittings from China.

The Commerce Department reported the dumping margins to be 18.66 to 80.2 percent for Italy, 116.17 percent for Taiwan, and 142.72 percent for China.

The subsidy rate for China is above de minimis, according to the agency.

The department is expected to issue its preliminary determinations in the antidumping investigations by Dec. 29 and in the countervailing duty investigation by March 14. Preliminary determinations in all of the cases from the International Trade Commission are expected by Nov. 20.

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