President Trump to Commerce Dept: Steel Trade Investigation a Matter of National Security

President Trump to Commerce Dept: Steel Trade Investigation a Matter of National Security

Susan Walsh/Associated Press

by Michelle Moons20 Apr 2017Washington, D.C.0

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WASHINGTON, D.C. — President Donald Trump issued a memorandum on Thursday calling for an investigation into domestic and foreign steel production and, in part, its impact on defense.

“For decades, America has lost our jobs and our factories to unfair foreign trade. And one steel mill after another has been shut down, abandoned, and closed, and we’re going to reverse that,” said President Trump as he moved to sign the memorandum.

The President continued:

Today, I’m directing the Department of Commerce to immediately prioritize the investigation that began yesterday and really long before that — because Wilbur and I have been working on this for a long time — into foreign steel arriving into our markets, and to submit a report on the effects of these foreign steel products on the national security of the United States. It’s not just the pricing, it’s not just employment, it also has to do with the national security of our country, which people never talk about. I talked about it.

Leo Gerard of United Steelworkers addressed the President:

Mr. President, on behalf of the workers in the industry — President of the Steelworkers Union — I have worked a long time with Wilbur, and we’ve been fighting this unfair trade for more than 30 years. Hopefully, this executive order will give us the tools we need to grow our companies back and put people back to work. And I have lots of faith that Secretary Wilbur Ross will help make that happen.”

President Trump responded, “I have to say, the unions have been working with us very closely, and they’ve been great. So I appreciate that. Thank you very much.”

The White House announced on Thursday that with steel import rising, the need to examine foreign practices is urgent. The President is also seeking to put America’s steel industry first, a complement to his Buy American, Hire American executive order signed earlier this week. The White House made clear that this is in line with promises the now President made during his 2016 presidential campaign.

In a briefing ahead of the signing of the memorandum, U.S. Secretary of Commerce Wilbur Ross informed reporters that on Wednesday night the Department of Commerce initiated an investigation under section 232 of the Trade Expansion Act of 1962, 19USC1962. Ross explained that this “authorizes the Secretary of Commerce to conduct comprehensive investigations to determine the effects of imports of any particular item into the United States on the security of the country.” He said this has been invoked before, notably in regards to the Arab Oil Crisis.

He listed the areas the investigation will look at: domestic production needed to meet national defense requirements, the industry’s capacity to meet such requirements, related human and material resources, importation of quantity and use of goods, close relation of national economic welfare to national security, loss of skills and investment, substantial unemployment, decrease in government revenue and impact of foreign competition on specific domestic industries and impact of displacement by excessive imports.

Anti-dumping and countervailing duty cases present a problem according to Ross. They are “very, very limited in nature to a very, very specific product from a very, very specific country.” However, the Trump Administration wants to see if facts warrant a more comprehensive solution to deal with a very wide range of steel products and very wide range of countries.

Ross quoted Trump’s remarks from back during the 2016 presidential campaign, “Foreign nations are dumping vast amounts of steel all over the united states which essentially is killing our steelworkers and steel companies. We will put new American steel into the spine of this country. We’re going to use American steel, we’re going to use American labor, we’re gonna come first in all deals.”

“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.

The investigation is required to be completed within 270 days, but Ross expects the completion to come a lot sooner. One or more public hearings will be held over the course of carrying out the memorandum.

The memorandum in its entirety reads as follows:

MEMORANDUM FOR THE SECRETARY OF COMMERCE

SUBJECT: Steel Imports and Threats to National Security

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Trade Expansion Act of 1962, it is hereby directed as follows:

Section 1. Policy. Core industries such as steel (including specialty steel unique to defense applications), aluminum, vehicles, aircraft, shipbuilding, and semiconductors are critical elements of our manufacturing and defense industrial bases, which we must defend against unfair trade practices and other abuses. In the case of steel, both the United States and global markets for steel products are distorted by large volumes of excess capacity ‑‑ much of which results from foreign government subsidies and other unfair practices.

The United States has placed more than 150 antidumping and countervailing duty orders on steel products, but they have not substantially alleviated the negative effects that unfairly traded imports have had on the United States steel industry. Repeated efforts by the United States to encourage other countries to reduce and address the underlying causes of excess capacity in the steel market have had little meaningful effect.

The artificially low prices caused by excess capacity and unfairly traded imports suppress profits in the American steel industry, which discourages long-term investment in the industry and hinders efforts by American steel producers to research and develop new and better grades of steel. If the present situation continues, it may place the American steel industry at risk by undermining the ability of American steel producers to continue investment and research and development, and by reducing or eliminating the jobs needed to maintain a pool of skilled workers essential for the continued development of advanced steel manufacturing.

Sec. 2. Investigation. The Secretary of Commerce (Secretary) has initiated an investigation under section 232(b)(1)(A) of the Trade Expansion Act of 1962 (the “Act”) (19 U.S.C. 1862(b)(1)(A)) to determine the effects on national security of steel imports. In conducting this investigation, and in accordance with section 232(d) of the Act (19 U.S.C. 1862(d)), the Secretary shall, as appropriate and consistent with law:

(a) consider the domestic production of steel needed for projected national defense requirements; the capacity of domestic industries to meet such requirements; the existing and anticipated availabilities of the human resources, products, raw materials, and other supplies and services essential to the national defense; the requirements of growth of such industries and such supplies and services, including the investment, exploration, and development necessary to assure such growth; and the importation of goods in terms of their quantities, availabilities, character, and use as those affect such industries and the capacity of the United States to meet national security requirements;

(b) recognize the close relation of the Nation’s economic welfare to our national security, and consider the effect of foreign competition in the steel industry on the economic welfare of domestic industries;

(c) consider any substantial unemployment, decrease in government revenues, loss of skills or investment, or other serious effects resulting from the displacement of any domestic products by excessive steel imports; and

(d) consider the status and likely effectiveness of efforts of the United States to negotiate a reduction in the levels of excess steel capacity worldwide.

Sec. 3. Submit Report and Provide Recommendations.

(a) The Secretary shall, consistent with applicable law, proceed expeditiously in conducting the investigation described in section 2 of this memorandum and shall submit to the President a report on the findings.

(b) Pursuant to section 232(b) of the Act (19 U.S.C. 1862(b)), if the Secretary finds that steel is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security, the Secretary shall, in the report submitted under subsection (a) of this section, recommend actions and steps that should be taken to adjust steel imports so that they will not threaten to impair the national security.

Sec. 4. General Provisions.

(a) Nothing in this memorandum shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

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Big Government, Economics, National Security, Department of Commerce, Donald Trump, national security, steel, Steel Imports, Wilbur Ross

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