Delaying the national security investigation is causing problems.
President Trump made a lot of promises during the 2016 campaign, and at the top of the list was a pledge to help the country’s blue-collar communities.
Back in April, Trump appeared to begin to make good on his word when he announced he was launching a “Section 232” investigation to determine whether steel imports posed a national security threat. He announced a similar investigation into aluminum imports a few days later.
But now it looks like Trump’s actions — or rather, lack thereof — could be making the imports crisis worse. Here’s Sen. Sherrod Brown (D-Ohio), explaining the situation to our own Scott Paul on The Manufacturing Report podcast:
"It would have been better had they not even brought it up."
Whoa — what is happening here?! Let’s start at the beginning.
As we’ve outlined in this space many times before, the ongoing steel imports crisis starts with China.
China is making far more steel than it can use for its own needs, and that out-of-control overcapacity has created a big global steel glut. Much of that steel is being dumped into the U.S. market, priced far below fair market value. It’s the same story in the aluminum industry.
China knows it has a problem, and has pledged to cut back on its industrial production. But China has repeatedly broken promises to do so. While the U.S. Commerce Department has placed steep tariffs on specific steel products — an effort that started under the Obama administration — China has managed to get around those tariffs, including by shipping steel through countries like Vietnam.
Trump’s Section 232 investigation was therefore the next step in an ongoing effort to hold China accountable for its promises. Depending on the report’s findings, it would allow the president to take comprehensive action to address unfairly traded imports, rather than rely on the current whack-a-mole system (which has been proven inadequate in addressing the underlying problem).
Commerce Secretary Wilbur Ross said in May that the administration hoped to release the report findings by the end of June. But the timeline kept being pushed back, and finally Trump himself said he’s backing off, at least for now.
“The biggest problem is, it looks like that was about to happen,” Brown said of the 232. “Steel companies from other countries were dumping steel as fast as they could, to get in under the ruling. Now, the ruling is not going to happen soon. We’ve seen all this steel dumped here, and it’s continuing.”
Indeed, steel imports are up by 21.7 percent in the first seven months of 2017 compared to the same period last year.
“Trading partners have targeted the U.S. market for fear that the United States will finally stand up for its producers and workers and protect our national security,” United Steelworkers President Leo Gerard said in a statement. “Postponing relief is equivalent to unilateral disarmament.”
Gerard also told The New York Times that Trump’s delay is “creating a crisis that’s being exacerbated,” noting that the president is hurting many of the same people he vowed to protect:
Dithering may have made the situation worse for American steel producers. Mr. Gerard said foreign competitors had been flooding the United States marketed with steel products in anticipation of the tariffs. Some of this is happening in parts of the country that voted for Trump.
"This has been a bit of a letdown in the industrial heartland," said Mr. Gerard, who is based in Pittsburgh. "A lot of our members supported the president because of what he said about steel and manufacturing."
It’s unclear what exactly prompted Trump to delay the investigation, although Brown said that Ross told him Trump was worried that if he went ahead with the investigation, he could lose Republican votes on the health care overhaul (which didn’t end up passing the Senate anyway).
“It didn’t make sense to me, but apparently the president doesn’t have it as a high priority,” Brown said.
The Trump administration technically has until January to unveil the findings of both 232 investigations. But it's abundantly clear that America's steel and aluminum workers and companies cannot wait that long for action, especially considering the surge of imports in recent months.
We encourage President Trump and his team to release the Section 232 findings as soon as possible — and take comprehensive action to safeguard American steel and aluminum.
You can listen to Sen. Brown's full conversation with Scott Paul below: