Trump sets off in­quiry into steel dump­ing

Coun­ters Ross, avoids di­rect blame on China

The Washington Times Daily - - FRONT PAGE - BY DAVE BOYER AND S.A. MILLER

Pres­i­dent Trump trig­gered an in­ves­ti­ga­tion of steel dump­ing Thurs­day to learn whether im­ports from China and other coun­tries threaten U.S. na­tional se­cu­rity, rais­ing the pos­si­bil­ity of new tar­iffs in his first trade move to de­fend a spe­cific in­dus­try.

Sur­rounded by U.S. steel ex­ec­u­tives in the Oval Of­fice, Mr. Trump signed a me­moran­dum or­der­ing the Com­merce De­part­ment to in­ves­ti­gate whether im­ported steel is hurting the pro­duc­tion ca­pac­ity of U.S. man­u­fac­tur­ers who are needed for a de­fense buildup.

“Steel is crit­i­cal to both our econ­omy and our mil­i­tary,” Mr. Trump said. “This is not an area where we can af­ford to be­come de­pen­dent on for­eign coun­tries.”

Even as they agreed on the need for ac­tion, the pres­i­dent and Com­merce Sec­re­tary Wil­bur L. Ross Jr. seemed to dis­agree about China’s role in steel dump­ing. Mr. Ross linked the in­ves­ti­ga­tion in part to a rise of Chi­nese steel im­ports, which now make up 26 per­cent of the U.S. mar­ket.

“Steel im­ports … have con­tin­ued to rise, de­spite re­peated Chi­nese claims that they were go­ing to

re­duce their steel ca­pac­ity, when in­stead they have ac­tu­ally been in­creas­ing it con­sis­tently,” Mr. Ross told re­porters. “In the first cou­ple months of this year alone, steel im­ports rose 19.6 per­cent. It’s a very se­ri­ous im­pact on the do­mes­tic in­dus­try.”

But Mr. Trump, asked by a re­porter whether the probe would com­pli­cate his ef­forts to get China’s help in curb­ing North Korea’s nu­clear weapons pro­gram, said the dump­ing in­ves­ti­ga­tion isn’t aimed at China.

“This has noth­ing to do with China,” Mr. Trump said. “This has to do with world­wide, what’s hap­pen­ing. The dump­ing prob­lem is a world­wide prob­lem.”

Ac­knowl­edg­ing that he was di­verg­ing from pre­pared re­marks, Mr. Trump re­ferred to his trip to Wis­con­sin on Tues­day and spoke out against Canada’s ac­tions un­der the North Amer­i­can Free Trade Agree­ment.

“What they’ve done to our dairy farm work­ers is a dis­grace. It’s a dis­grace,” Mr. Trump said, adding that it was a re­sult of the NAFTA deal that has been “a disas­ter for our coun­try.”

“We’ll be reporting back some­time over the next two weeks as to NAFTA and what we’re go­ing to do about it,” the pres­i­dent said.

“We can’t let Canada or any­body else take ad­van­tage and do what they did to our work­ers and to our farm­ers. So we’re go­ing to have to get to the ne­go­ti­at­ing ta­ble with Canada very, very quickly.”

Mr. Trump is seek­ing China’s help in pres­sur­ing North Korea to scale back its nu­clear weapons and bal­lis­tic mis­sile devel­op­ment, in­clud­ing a failed mis­sile launch last week­end. Mr. Trump an­nounced last week that his administration would not la­bel China as a currency ma­nip­u­la­tor de­spite prom­ises to do just that dur­ing his campaign.

Mr. Ross said currency ma­nip­u­la­tion has noth­ing to do with the ques­tion of steel ex­ports.

“Currency is a to­tally dif­fer­ent is­sue,” he said. “Steel is an im­por­tant fac­tor in our in­fra­struc­ture as it re­lates to na­tional de­fense. We have to make our de­ci­sion based on what’s im­por­tant to the United States and our se­cu­rity. The im­por­tant ques­tion is pro­tect­ing our de­fense needs.”

Administration of­fi­cials said the move sup­ports Mr. Trump’s campaign pledge to clamp down on for­eign steel dump­ing on the U.S. mar­ket that has un­der­cut U.S. jobs. The ac­tion sparked a rally of steel stocks in the U.S., and steel ex­ec­u­tives hailed the pres­i­dent’s move.

John Fer­riola, chair­man and pres­i­dent of steel pro­ducer Nu­cor Corp., said he had little doubt that coun­tries were illegally or un­fairly ex­port­ing steel to the U.S.

“What we would like to see this in­ves­ti­ga­tion lead to is a level play­ing field,” Mr. Fer­riola said. “We as a coun­try and every one of our com­pa­nies can very, very suc­cess­fully com­pete against any com­pany and any coun­try if we are given a level play­ing field.”

He at­tended the sign­ing cer­e­mony with a dozen other steel in­dus­try ex­ec­u­tives.

Mr. Fer­riola said he was “very im­pressed” with Mr. Trump’s fo­cus and at­ten­tion to de­tail on the steel is­sues and his drive to cre­ate U.S. jobs. He said he couldn’t com­pare the ex­pe­ri­ence with that of Mr. Trump’s pre­de­ces­sor.

“I’ve never met with Pres­i­dent Obama,” Mr. Fer­riola said. “I was never in­vited.”

Repub­li­can con­gres­sional lead­ers praised the pres­i­dent’s move, and some Demo­cratic law­mak­ers gave Mr. Trump grudg­ing sup­port. Rep. Rosa L. DeLauro, Con­necti­cut Demo­crat, called the in­ves­ti­ga­tion “a step for­ward” but added that Mr. Trump has backed off prom­ises to use only U.S.-made steel in the Key­stone XL pipe­line and to la­bel China a currency ma­nip­u­la­tor.

“Our work­ers have been crushed by the Chi­nese steel over­ca­pac­ity dumped into Amer­i­can mar­kets, and mil­lions of good-pay­ing jobs have been lost,” Ms. DeLauro said. “The hun­dreds of thou­sands of work­ers and com­mu­ni­ties in Amer­ica who de­pend upon the steel in­dus­try de­serve real en­force­ment of our laws to hold bad actors ac­count­able.”

Sen. Rob Port­man, Ohio Repub­li­can, said world­wide steel over­ca­pac­ity is par­tic­u­larly hurting his state, where more than 1,500 steel­work­ers have been laid off over the past two years. He said Congress and the administration must “pro­tect Ohio jobs and stop trade cheats from un­fairly trad­ing steel into the U.S. mar­ket.”

While administration of­fi­cials wouldn’t dis­cuss the like­li­hood of new tar­iffs on steel im­ports, House Ways and Means Com­mit­tee Chair­man Kevin Brady, Texas Repub­li­can, said the pend­ing re­port would give the administration and law­mak­ers a tool “to re­spond in an ef­fec­tive and ap­pro­pri­ate way.”

Un­der a 1962 trade law, the administration has the author­ity to as­sess the do­mes­tic pro­duc­tion needed for pro­jected na­tional de­fense re­quire­ments, the do­mes­tic in­dus­try’s ca­pac­ity to meet those re­quire­ments and the “close re­la­tion of na­tional eco­nomic welfare to U.S. na­tional se­cu­rity.” The pro­vi­sion, known as Sec­tion 232, has been used only 14 times, most re­cently by Pres­i­dent Ge­orge W. Bush in 2001 to ex­am­ine the im­pact of iron ore and steel im­ports.

One an­a­lyst on Sec­tion 232 trade in­ves­ti­ga­tions said the administration will have a tough time mak­ing its case based on the need for do­mes­tic steel for na­tional se­cu­rity pur­poses. Jeff Bia­los, a part­ner at Ever­sheds Sutherland in Wash­ing­ton who served in top posts at the Pen­tagon and Com­merce De­part­ment in the Rea­gan administration, said the 2001 case on steel im­ports found that the De­fense De­part­ment’s de­mand for steel for weapons sys­tems was less than the 0.3 per­cent of the do­mes­tic steel in­dus­try’s to­tal an­nual out­put.

“Whether or not there’s a steel im­port prob­lem, it’s go­ing to be very dif­fi­cult to make this into a na­tional se­cu­rity prob­lem,” Mr. Bia­los said. “It’s hard to see how the stan­dard [threat­en­ing na­tional se­cu­rity] would be met for an af­fir­ma­tive find­ing.”

Re­cent re­ports by the U.S. In­ter­na­tional Trade Com­mis­sion have found that the do­mes­tic steel in­dus­try is in­jured by im­ports, in­clud­ing harm from na­tions that ex­port steel to the U.S. and un­fairly sub­si­dize those prod­ucts or sell them at ar­ti­fi­cially low prices.

Mr. Trump signed an ex­ec­u­tive me­moran­dum in the Oval Of­fice on Thurs­day morn­ing to for­mally ini­ti­ate the in­ves­ti­ga­tion. By law, the Com­merce De­part­ment in­ves­ti­ga­tion must be con­cluded and re­port sub­mit­ted within 270 days. Mr. Ross said he ex­pects the re­port to be com­pleted much sooner.

Al­liance for Amer­i­can Man­u­fac­tur­ing Pres­i­dent Scott Paul said the Sec­tion 232 trade ac­tion will “safe­guard our do­mes­tic steel in­dus­try’s abil­ity to pro­tect our na­tional se­cu­rity.”

“China’s over­ca­pac­ity in a va­ri­ety of in­dus­trial sec­tors, cou­pled with its per­sis­tent unfair trade prac­tices, put Amer­i­can jobs and in­dus­try at risk,” Mr. Paul said in a state­ment. “That’s what makes this Sec­tion 232 in­ves­ti­ga­tion so im­por­tant: It’s an un­der­uti­lized tool that should be deployed in de­fense of the do­mes­tic steel in­dus­try and its work­ers.”

The Com­merce De­part­ment has im­posed 152 penal­ties for steel dump­ing in its his­tory, with 25 more cases pend­ing. Mr. Ross said those cases have lacked an over­all im­pact and that too many loop­holes al­low vi­o­la­tors to con­tinue evad­ing trade laws.

“The prob­lem with those coun­ter­vail­ing duty and anti-dump­ing cases is that they’re very lim­ited in na­ture, to a very, very spe­cific prod­uct from one spe­cific coun­try,” Mr. Ross said. “It doesn’t solve the whole prob­lem. So we’re grop­ing here to see whether the facts war­rant a more com­pre­hen­sive solution to deal with a wide range of steel prod­ucts from a wide range of coun­tries.”

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