On Thursday, President Trump signed an executive order instructing the U.S. Commerce Department to start an investigation into claims that cheap steel imports kill the U.S. steel industry. The President is interested in finding out if the imports represent a national security risk and if they should be banned.
Steel ‘Critical’ for the U.S. Military
The president signed the order surrounded by several steel executives. The move comes months after ordering a military buildup as steel may affect defense. Trump described steel as a “critical” raw material for the U.S. economy and military. He added that the U.S. should not rely on foreign countries for the commodity.
Trump explained he took action for American workers, who also put him in the Oval Office. He reminded everyone that he has honored his campaign pledge to withdraw the U.S. from the Trans-Pacific Partnership.
The latest move is the first concrete action on trade since Trump took office. On the campaign trail, he complained “cheap imports” were killing U.S. economy.
On Thursday, Commerce Secretary Wilbur Ross underlined that a recent rise of 19.6% in steel imports had a negative impact on the country’s steel industry. Ross said the industry was affected despite 150 duty and antidumping orders on the metal. He said these measures failed to offset the negative impact of “unfairly traded imports” on the country’s steel industry.
He added that the U.S. has repeatedly asked other countries to fix excesses in steel supplies but to no avail. Cheap steel can undermine the U.S. industry as steel manufacturers are less likely to invest, conduct research and development, and hire skilled workers.
U.S. Eyes China
China’s steel industry currently produces nearly half of the world’s steel. During the 2016 presidential campaign, Trump criticized China for its cheap exports. At the time, the billionaire said that foreign countries including China were “dumping” steel across the U.S., which kills domestic steel companies and their workers.
U.S. steel makers accuse China of purportedly keeping prices down to gain a competitive edge against other countries, but the move is killing U.S. jobs across the industry.
In 2016, John Ferriola the head of a major steel company complained before Congress about China’s trade practices. Ferriola said the Asian country was, in fact, a company in the guise of a country that is actively engaged in an “economic warfare.”
According to the Commerce Department, the United States’ steel industry has lost 29% of its capacity since imports make up more than a quarter of the steel supply.
The recently-ordered investigation will be much exalted by Trump’s supporters, but it will surely stiffen relationships with China. Trump signed the latest order just days after he said China was not a “currency manipulator” as he had implied on the campaign trail.
Early this year, China slammed the U.S. for its “extreme” tariffs on Chinese products and complained about similar retaliatory trade measures from other countries in 2016. A Chinese official said trade disputes currently tend to have a political motivation, which leads to “extreme” measures and high tariff rates.
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