American Industry Applauds Section 232 Recommendations; the Rest of the World is Criticizing Them
02/21/2018 - U.S. steel industry representatives said they are hopeful that the Commerce Department’s recommended tariffs and quotas will effectively check steel imports and are asking President Donald Trump to make a decision soon.
"(Commerce Secretary Wilbur Ross) has laid out options that have the potential to be meaningful and effective to address the threat the industry faces in light of global excess capacity and relentless steel imports," said Steel Manufacturers Association President Philip K. Bell.
"The president now has options before him that can move our industry forward and help steelmakers operate at rates that will allow U.S. producers to reinvest to maintain and strengthen the industry to ensure U.S. steel production can survive to serve U.S. national defense interests."
And in a statement to American Metal Market, Nucor Corp. chairman and chief executive John Ferriola said he is encouraged by the recommendations.
"We urge the president to move quickly to review these recommendations, [and] we stand ready to assist the administration in evaluating which recommendations will have the greatest impact in stopping the flow of unfairly traded imports," he said in a statement.
The United Steelworkers union said it, too, believes the recommendations could provide meaningful protections to U.S. producers.
"The (Commerce Department) reports provide a comprehensive listing of the countries – Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam – that have relentlessly violated trade laws. Curtailing that cheating and restoring fair market prices will go a long way to reigniting domestic production and employment," said USW International President Leo Gerard.
"These recommendations have the potential to focus on the bad actors in the world that historically and systemically cheat in international trade. We applaud that approach," he said.
Elsewhere, though, the reaction has been quite the opposite.
The European Steel Association is urging Trump to forgo tariffs and quotas, saying that those actions would spark retaliation and undermine the close relationship between the EU and the U.S. Furthermore, the measures have the potential to damage the EU’s steel market as exported steel that otherwise would have gone to the U.S. could wind up in the EU, the association said.
"This could seriously and unfairly injure EU producers, breaking the fragile recovery the sector has seen over the past few months," said Axel Eggert, the association’s director general.
"We urge the U.S. president: Do not pull the trigger on a new trade war."
The EU is nevertheless preparing for a fight.
The Associated Press, citing a German newspaper, reported that EU officials are drawing up a list of American products it would hit with retaliatory tariffs, including orange juice and bourbon whiskey.
In Asia, South Korean leaders said they would fight the Section 232 measures through the World Trade Organization and appeal directly in talks over the free trade agreement between the two countries, according to the Nikkei Asian Review.
"I hope that you raise the issue of unfairness (of protectionist measures) aggressively during negotiations for revising the Korea-U.S. Free Trade Agreement," South Korea President Moon Jae-in told senior advisers during a meeting earlier this week, according to the publication.
An official at China’s commerce ministry, meanwhile, said it would be reckless for the U.S. to impose the measures in the name of national security.
"The spectrum of national security is very broad. Without a clear definition, it could easily be abused. If every country followed the U.S. on this, it would have serious ramifications on the international trade order," said Wang Hejun, director of the commerce ministry’s trade remedy and investigation bureau, according to the South China Morning Post.
"If the final decision from the U.S. hurts China’s interests, we will definitely take necessary measures to protect our rights."
And some expressed doubt the recommended measures would achieve the desired outcome.
In an interview with S&P Global Platts, World Steel Association director general Edwin Basson said the measures would cause prices to rise, impacting end users. But he said imposing quotas and tariffs probably wouldn’t halt imports.
"Irrespective of which option is chosen, the most likely situation is imports into the U.S. will not really adjust much and the only thing that will change is the price at which material is traded in the U.S. Importers will pay the duty – they have no other option as they have to import around 20 million metric tons per year."
The release of the Commerce Department’s Section 232 findings comes as the U.S., Canada and Mexico are set to begin the next round of talks on North American Free Trade Agreement revisions.
As Canada awaits Trump’s decision, the country will be calling much attention to the highly integrated steel and aluminum supply chains in both countries, said Adam Austen, a spokesman for Canadian Foreign Affairs Minister Chrystia Freeland, in a statement to Bloomberg.
"The president now has options before him that can move our industry forward and help steelmakers operate at rates that will allow U.S. producers to reinvest to maintain and strengthen the industry to ensure U.S. steel production can survive to serve U.S. national defense interests."
And in a statement to American Metal Market, Nucor Corp. chairman and chief executive John Ferriola said he is encouraged by the recommendations.
"We urge the president to move quickly to review these recommendations, [and] we stand ready to assist the administration in evaluating which recommendations will have the greatest impact in stopping the flow of unfairly traded imports," he said in a statement.
The United Steelworkers union said it, too, believes the recommendations could provide meaningful protections to U.S. producers.
"The (Commerce Department) reports provide a comprehensive listing of the countries – Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam – that have relentlessly violated trade laws. Curtailing that cheating and restoring fair market prices will go a long way to reigniting domestic production and employment," said USW International President Leo Gerard.
"These recommendations have the potential to focus on the bad actors in the world that historically and systemically cheat in international trade. We applaud that approach," he said.
Elsewhere, though, the reaction has been quite the opposite.
The European Steel Association is urging Trump to forgo tariffs and quotas, saying that those actions would spark retaliation and undermine the close relationship between the EU and the U.S. Furthermore, the measures have the potential to damage the EU’s steel market as exported steel that otherwise would have gone to the U.S. could wind up in the EU, the association said.
"This could seriously and unfairly injure EU producers, breaking the fragile recovery the sector has seen over the past few months," said Axel Eggert, the association’s director general.
"We urge the U.S. president: Do not pull the trigger on a new trade war."
The EU is nevertheless preparing for a fight.
The Associated Press, citing a German newspaper, reported that EU officials are drawing up a list of American products it would hit with retaliatory tariffs, including orange juice and bourbon whiskey.
In Asia, South Korean leaders said they would fight the Section 232 measures through the World Trade Organization and appeal directly in talks over the free trade agreement between the two countries, according to the Nikkei Asian Review.
"I hope that you raise the issue of unfairness (of protectionist measures) aggressively during negotiations for revising the Korea-U.S. Free Trade Agreement," South Korea President Moon Jae-in told senior advisers during a meeting earlier this week, according to the publication.
An official at China’s commerce ministry, meanwhile, said it would be reckless for the U.S. to impose the measures in the name of national security.
"The spectrum of national security is very broad. Without a clear definition, it could easily be abused. If every country followed the U.S. on this, it would have serious ramifications on the international trade order," said Wang Hejun, director of the commerce ministry’s trade remedy and investigation bureau, according to the South China Morning Post.
"If the final decision from the U.S. hurts China’s interests, we will definitely take necessary measures to protect our rights."
And some expressed doubt the recommended measures would achieve the desired outcome.
In an interview with S&P Global Platts, World Steel Association director general Edwin Basson said the measures would cause prices to rise, impacting end users. But he said imposing quotas and tariffs probably wouldn’t halt imports.
"Irrespective of which option is chosen, the most likely situation is imports into the U.S. will not really adjust much and the only thing that will change is the price at which material is traded in the U.S. Importers will pay the duty – they have no other option as they have to import around 20 million metric tons per year."
The release of the Commerce Department’s Section 232 findings comes as the U.S., Canada and Mexico are set to begin the next round of talks on North American Free Trade Agreement revisions.
As Canada awaits Trump’s decision, the country will be calling much attention to the highly integrated steel and aluminum supply chains in both countries, said Adam Austen, a spokesman for Canadian Foreign Affairs Minister Chrystia Freeland, in a statement to Bloomberg.
