There’s no denying the facts: U.S. steel imports were up 19.4% in the first 10 months of 2017, compared to last year’s figures (according to the American Iron and Steel Institute). And according to a recent article in the new York Times, President Trump’s failure to follow through on his promise to revive the U.S.steel industry has had unintentional consequences – the big surge of imports are hurting U.S steel makers who were already struggling with the influx of cheap Chinese steel.
The NYT article leads with ArcelorMittal’s plan to lay off 150 of 207 workers at a mill on the outskirts of Philadelphia. ArcelorMittal blamed the steel imports, as well as low demand for steel for bridges and military equipment. A spokesman for the Commerce Department, James Rockas, told the New York Times the administration was “aware of the plight of American steelworkers and will continue working to halt unfair trade practices that harm our economy and kill American jobs.”
Earlier in the year, tariffs on steel imports seemed imminent when Trump vowed to stop the dumping of imported steel. It’s believed by many that foreign steel makers have rushed to get their product into the United States before tariffs start or other barriers are imposed. While the tariffs, quotas, or other means to control or block imports have yet to happen, last spring, Trump ordered an investigation into imports of steel and aluminum under the little-used Section 232 of the Trade Expansion Act of 1962. This law “authorizes the Secretary of Commerce to conduct comprehensive investigations to determine the effects of imports of any article on the national security of the United States.” (Learn more about Section 232 here.) The results could include recommendations that the U.S. levy broad tariffs on the steel and aluminum industries. Once the results of the probe are released in mid-January, the president will then have 90 days to decide what to do.
The New York Times surmises the lack of action “appears to be caused partly by internal divisions within the White House.” While some officials wanted to go forward with the tariffs, others worried about possible repercussions. Companies that use steel in their manufacturing (like automakers) feel that tariffs would drive up their costs and cause them to have to sacrifice more jobs than the tariffs would save. The United Steelworkers union has defended Trump’s trade agenda, while some prominent economists urged the president not to impose steel tariffs, stating in a letter (see Former CEA Chairs Urge President not to Impose Steel Tariffs ):
The United States already has over 150 countervailing and antidumping duties on steel imports, including some as high as 266 percent. We import steel from over 110 countries and territories, but the top source countries are important allies like Canada, Brazil, South Korea, and Mexico. Additional tariffs would likely do harm to our relations with these friendly nations; officials from Canada, United Kingdom, the European Union, Germany, and the Netherlands have already voiced concern.
But it’s important to note that while these tariffs have started to limit direct imports from China (down 6% year over year), imports from other foreign countries have been on the rise, more than offsetting the slight decline from China.
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