25 U.S. steel executives sent President Donald Trump a letter last week urging him halt damaging steel imports that are “undermining the viability of the U.S. steel industry.”
“The sustained surge of steel imports … has hollowed out much of the domestic steel industry and threatens our ability to meet national security needs,” wrote the steel leaders to Trump last Wednesday.
The Trump administration ordered the 232 investigation in April to see if steel imports pose a national security threat.
“Commerce Secretary Wilbur Ross has flagged possible tariffs, quotas or both to limit imports on grounds of national security under the seldom-used Section 232 of the Trade Expansion Act,” writes Bloomberg.
“While potential curbs on both steel and aluminum have pushed up producers’ shares in the U.S., they have also drawn warnings from top economists including Former Federal Reserve chairman Ben Bernanke as well as buyers of metal products from Caterpillar Inc. to Coca-Cola Co. that a crackdown on imports could push up costs and squeeze margins.”
The investigation originally had a June deadline, but Trump told The Wall Street Journal that other matters like health care and tax reform have to be handled before the steel dumping measures are discussed in further detail.
Now in late August, steel executives are now urging “immediate action.”
“The need for action is urgent. Immediate action must meaningfully adjust imports to restore healthy levels of capacity utilization and profitability to the domestic industry over a sustained period,” said the letter. “The US industry continues to suffer the consequences of foreign government inaction. Under your bold leadership, Mr. President, with your vision for ‘America First,’ this can and must change.”
The U.S. Commerce Department has until January 2018 to prep the steel import policy. Trump then has 90 days to make recommendations and then 15 days to finalize the policy.
Lourenco Goncalves, CEO of Cliffs Natural Resources Inc. and one of the signers of the joint letter, has pointed out that as buyers shy away from import steel, U.S. producers have been pushed to increase prices on domestic metal.
“We are seeing that happening right now,” said Goncalves to Bloomberg. “Right now there’s a lot of people who are scared.”
Goncalves and the other CEOs are worried that this could start a trade war, but are optimistic that Trump will take appropriate swift action.
“Trump is too smart, politically, to miss the idea that he needs to do something based on 232 at some point, or else he is definitely hurting his ability to be re-elected,” said Goncalves.
Editor’s note: Trump has promised fair trade and America first. The steel CEO’s are holding him to it. There is no doubt that other countries have taken advantage of our conciliatory trade policies.