President Trump signed a Presidential Memorandum prioritizing an investigation of the harm caused to the national security of the US from steel imports on April 20.
This comes as Trump is ordering new ships, planes, and tanks to be built.
“Maintaining the production of American steel is extremely important to our national security and our defense industrial base. Steel is critical to both our economy and our military. This is not an area where we can afford to become dependent on foreign countries. We have a product where we actually need foreign countries to be nice to us in order to fight for our people,” he said.
The investigation is being conducted under section 232 of the Trade Expansion Act of 1962. The law gives the president authority to restrict imports if they are determined to be harmful to U.S. security interests.
It also requires the investigation to be concluded and a report submitted within 270 days. Commerce Secretary Wilbur Ross, who is leading the investigation, says the process will be faster than that.
Based on the report, the president will determine and issue necessary actions, including possible tariffs to ensure that steel imports no longer threaten U.S. national industry.
The report will examine unfair foreign trade practices such as dumping.
“Dumping is a tremendous problem in this country. They’re dumping vast amounts of steel in our country, and they’re really hurting not only our country, but our companies. Their targeting of American industry and other foreign strategies designed to undermine American industry as a whole,” said Trump.
He added that the problem is not limited to China.
“This has nothing to do with China. This has to do with worldwide, what’s happening. The dumping problem is a worldwide problem,” said Trump.
However, the investigation comes as U.S. steel imports from China are on the rise.
“In the first couple months of this year alone, steel imports rose 19.6 percent year over year, and are now more than 26 percent of the entire U.S. marketplace. So it’s a very serious impact on the domestic industry,” said Ross.
“Steel imports, despite the activities that we’ve already had in countervailing duties and anti-dumping, have continued to rise, and they’ve continued to rise despite repeated Chinese claims that they were going to reduce their steel capacity when instead they have actually been increasing it consistently,” said Ross.
China has over 1 billion tons in steel production capacity. It uses 700 million tons at home and exports 100 million tons. The exported amount alone is about the total U.S. consumption.
In contrast, American-made steel once accounted for roughly 20 percent of global production, but had slipped to less than 5 percent by 2015, according to the Belgium-based World Steel Association.