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Steel 232 details unlikely to be public at first

Jan 09, 2018 | 04:36 PM | Michael Cowden

CHICAGO — A key moment in the Trump administration’s Section 232 investigation into steel imports could come next week with little fanfare, steel lobbying groups said.

The Commerce Department is expected to send a report to the White House on Tuesday January 16, concluding whether imports pose a threat to national security, Thomas J. Gibson, chief executive officer of the American Iron and Steel Institute (AISI), told American Metal Market in an exclusive interview.

Commerce will meet that deadline because it is statutory, unlike the soft, “aspirational” dates the administration had floated, he said.

And the report is likely to support the steel industry’s contention that imports pose a threat to national security defined broadly not only as defense requirements but also infrastructure and US “economic security,” he said.

Little else - for example, what countries or products might be targeted - is likely to be revealed next week. “The White House would probably want to keep the report non-public until they decide how they are ultimately going to act,” Gibson said.

After Commerce delivers its report, President Donald Trump has 90 days, or until mid-April, to decide whether he agrees with the department’s recommendations, plus another 15 days to take action. Commerce is expected to recommend tariffs, quotas or a combination of both to slow imports.

The steel industry probably won’t have to wait that long to find out what the report says, AISI officials said.

The White House is already holding “active meetings” on trade issues, including the Section 232 investigation, AISI senior vice president of public policy, general counsel and secretary Kevin M. Dempsey said.
  
A potential indicator of just how important the Section 232 probe might be to Trump: It was scheduled to be discussed last weekend during a meeting at Camp David, the president's retreat in Maryland, among senior administration officials and congressional Republican leadership, a source familiar with the matter said.

“I don’t know that there’ll be a big splash of news. But I can’t imagine they are going to drag this out until April or May. ... I think there is a question of working out exactly what they are going to roll out and when,” Dempsey said.

It is hard to imagine a scenario in which the administration would miss the January 16 deadline, he added. “This is their program. They initiated this. You don’t fail to perform your own plan.”

High-level talks have intensified not only around the Steel section 232 investigation but also around the an aluminium Section 232 probeand trade cases involving solar panels and washing machines, Steel Manufacturers Association (SMA) president Philip K. Bell said.

“That doesn’t mean [Commerce’s report] is going to be made public,” he said. “It could be a situation where the report sits for a while until a lot of other things play out on the geopolitical front as well as the trade front.”

For instance, another round of North American Free Trade Agreement talks is coming up. Both AISI and SMA reiterated their support for Nafta, which Trump has dubbed the "worst trade deal in history" and threatened to scrap.

While the steel industry wants Trump to keep Nafta intact, it expects him to make good on campaign pledges to crack down on imports and invest in infrastructure in 2018 after 2017 was dominated by tax and healthcare reform, both groups said.

“Trade is something that was a huge campaign issue, and it got lost in the shuffle in 2017. If you are looking for a way to change the narrative … for a way that you can appeal to your base, particularly in those states that you narrowly won - Wisconsin, Pennsylvania, Michigan - where there is a huge concentration of steel industries, this [Section 232] might be a good way to pivot,” Bell said.

A Section 232 remedy also has the benefit of being an executive action that can be taken without congressional approval. An additional plus: “Let’s just be honest - tariffs are simple. Everyone understands them, even the president,” Bell said.

And a Section 232 action is still necessary, even with imports of some steel products down, because overall import volumes are up, Gibson said. The US imported approximately 32.3 million tonnes of steel in 2017, up 7.7% from roughly 30 million tonnes in 2016, according to Commerce Department figures.

A remedy is also needed to give teeth to policy recommendations made by the Global Forum on Steel Excess Capacity, Gibson said. "You have to have something back it up. And the 232 is certainly that."

Neither the Commerce Department, nor the White House responded to requests for comment.

Michael Cowden
mcowden@amm.com