President Donald Trump launched an investigation Thursday into foreign steel entering the U.S. markets, and whether the practice threatens national security, opening the door for new tariffs.
It’s the latest step in Trump’s “Buy American” campaign promise, and the first action of the new administration to curb the illegal steel dumping that devastated the industry in 2015. The order comes after Trump met with Chinese President Xi Jinping earlier this month, when The New York Times first reported an executive order targeting steel dumping was in the works.
“Maintaining the production of American steel is extremely important to our national security and our defense industrial base,” Trump said. “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.”
Commerce Secretary Wilbur Ross will make recommendations to the White House based on results of the investigation, which come as soon as 50 days or as late as 270 days. Ross said Thursday that Chinese steel exports have continued to rise and are having “a very serious impact on domestic industry.”
Congressman Rick Nolan, D-Minn., praised the investigation, while expressing concerns over what concessions the administration was planning with China. Nolan worked with the Obama administration to stamp tariffs as high as 500 percent on imports, boosting the steel industry in 2016 and early 2017, after a steep downturn in 2015.
“We need a commitment from President Trump that he will continue to hold China accountable for their illegal steel dumping practices. Absolutely no concessions can be made when it comes to ensuring the strength of our U.S. iron ore and steel industry,” Nolan said in a statement. “The connection between a strong U.S. iron ore and steel industry and our national security is clear. These industries not only directly and indirectly support millions of good paying jobs; they provide the foundation for our military defense and infrastructure … We cannot permit foreign steel to weaken or destroy our iron ore and steel industries — period.”
News of the move triggered a rally for steel stocks, according to Reuters, including Steel Dynamics Inc, AK Steel, U.S. Steel, Nucor, Cliffs Natural Resources and Allegheny Technologies.
The American Iron and Steel Institute, which lobbies on behalf of the industry, said it supports the White House move.
“Massive global steel overcapacity has resulted in record levels of dumped and subsidized foreign steel coming into the U.S. and the loss of nearly 14,000 steel jobs,” said institute President Thomas Gibson in a statement. “The administration launching this investigation is an impactful way to help address the serious threat posed by these unfair foreign trade practices.”
Steel companies also applauded the move.
“For too long, China and other nations have been conducting economic warfare against the American steel industry by subsidizing their steel industries, distorting global markets, and dumping excess steel into the United States,” U.S. Steel said in a news release. “The effects have been staggering. Tens of thousands of workers in the American steel industry, the industry’s supply chain and the communities in which our industry operates have lost their jobs due to unfair and illegal practices by foreign producers. We have offered the Commerce Department our full cooperation during its investigation.”
Cliffs Natural Resources echoed those sentiments.
“We applaud the Trump administration’s efforts to eliminate the presence of illegally traded steel in the American marketplace. Cliffs continues to believe that illegal imports threaten the ability of the domestic steel industry to fulfill its role as an important part of the Defense system of the United States,” said Lourenco Goncalves, Cliffs’ chairman, president and CEO “We also believe that Section 232 might provide the administration with more powerful instruments to address the, so far, unpunished behavior of the ones that play both sides of their mouths, and continue to insist on being the recipients, within the American territory, of illegally traded steel into our country.”
U.S. Sen. Amy Klobuchar, D-Minn, called the order a step in the right direction.
“Steel dumping has harmed our domestic industry and left many workers on the Iron Range without a job to support their families. I have long called for tougher actions to address the dumping of Chinese steel on our shores,” Klobuchar said. “Launching this investigation signals that the administration is willing to consider every tool we have to crackdown on unfair steel imports and help get our miners back to work.”
U.S. Sen. Al Franken agreed.
“Illegal steel dumping by foreign countries have cost us jobs and hurt the economy of the Iron Range, which is why I have consistently pressed our trade negotiators for tougher action,” Franken said. “This recent announcement by the Trump administration is a step in the right direction, and as the administration investigates this issue, I urge them to pay particular attention to the impact of illegal dumping on the Iron Range and to take corrective action to remedy this wrong.”