What ‘national security threat’ really means
Trump’s point is that U.S. can’t produce enough steel in case of an emergency
Let’s at least be honest with ourselves about U.S. President Donald Trump’s tariffs and levies on imported Canadian aluminum and steel.
Prime Minister Justin Trudeau and other Canadians profess to be insulted by Trump labelling Canada a “national security threat” to justify the trade actions.
But the reality is, Trudeau and company are either missing or deliberating misconstruing the reasons underpinning Trump’s move.
Trump isn’t saying Canada is a national security threat to the U.S. He’s arguing that declining American steel production in the face of increasing imports, including Canadian, is threatening his country’s national security.
Whether you buy the argument or not isn’t the point. Rightly or wrongly, that’s where Trump is coming from.
For decades various U.S. governments have identified domestic steel production as essential to America’s national security. Steel is considered critical for meeting its extensive defence requirements — the making of weapons and related products — and for key infrastructure systems ranging from communications to transportation.
But over the years a flood of lowerpriced foreign steel has resulted in the closure or idling of numerous U.S. steel mills, reducing the country’s self-sufficiency. Thus the perceived threat to national security.
All this is spelled out in a 2018 U.S. Department of Commerce investigation into the issue under Section 231 of the Trade Expansion Act, the same section Trump is now using to threaten auto tariffs on Canada.
According to the report, over the last couple of decades the U.S. has lost 25 per cent of its basic oxygen furnace facilities, seen the closure of several electric arc furnace facilities, and is down to one producer of electrical steel needed for crucial power distribution transformers.
The report says a further reduction in primary steelmaking would put the U.S. at serious risk of becoming dependent on foreign steel to support its critical industries and defence requirements.
“This is not a hypothetical situation,” the report declares. “The Department of Defence already finds itself without domestic suppliers for some particular types of steel used in defence products including tire rod steel used in military vehicles and trucks.”
The report states that while the U.S. has many allies that produce steel, “relying on foreign owned facilities located outside the United States introduces significant risk and potential delay for the development of new steel technologies and production of needed steel products, particularly in times of emergency.”
Ominously, the report notes that the government’s authority to mandatorily place military orders ahead of commercial orders does not extend to foreign owned facilities outside the U.S. How serious is the concern? Well, if the U.S. required a sudden boost in steel production as it has in previous national emergencies, domestic production may not be up to the task. For example, in the lead-up to and during the Second World War, the U.S. increased pig iron and ferroalloy production 217 per cent and the production of steel ingots and castings by 210 per cent.
“But if the U.S. were to experience a conflict requiring the production increase seen during the Second World War, the existing domestic steel production capacity would be unable to meet national security requirements,” the report says.
In other words, the massive industrial might the U.S. unleashed to save the world from Nazi fascism and Japanese militarism no longer exists. In fact, its present steelmaking capacity may even be “slightly insufficient” to meet the ramped-up requirements needed to fight the Vietnam War.
The report winds up noting America’s “surge capacity” to quickly shift production from commercial manufacturing to defence and critical infrastructure during an unexpected or extended conflict or emergency is now at “serious risk.” Trump may be incapable of articulating what that signifies to a superpower looking over its shoulder at an ascending China, which can produce as much steel as the rest of the world combined. But that’s his ostensible justification for the trade actions. It’s a perspective the political class and commentariat on both sides of the border have largely brushed off.
Whether tariffs will have any impact on restoring American domestic steel production is an open question. Certainly quotas and tariffs by previous administrations suggest it won’t. But rather than dismissing Trump’s national security concerns, perhaps Trudeau and his affronted colleagues in Ottawa might be better employed considering how to diplomatically help alleviate them.