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US initiates Section 232 probe on steel imports' impact on national security

Pittsburgh (Platts)--20 Apr 2017 419 pm EDT/2019 GMT


The US Department of Commerce self-initiated a Section 232 investigation on the impacts of steel product imports on national security, Secretary Wilbur Ross said during a White House briefing Thursday.

A Section 232 investigation under the Trade Expansion Act of 1962 tasks the Secretary of Commerce with preparing a report on "whether the importation of the article in question is in such quantities or under such circumstances as to threaten to impair the national security," according to the website of the Bureau of Industry and Security, which is an agency within the Commerce Department.

Commerce will investigate the amount of US steel production needed for the country's projected national security requirements, the industry's capacity, human and material resources, imports, the impact of foreign competition on certain industries and other points.

The department initiated the case based on President Donald Trump's decision to increase military spending, according to Ross.

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The report typically is submitted to the president within 270 days, but Ross said that because of the extensive work that has been done with antidumping and countervailing duty investigations on individual steel products, he expects to turn around the report much sooner than that.

Then, the president has 90 days to determine whether he agrees with Commerce's finding and recommended action and duration. If he agrees to take action, he must act within 15 days.

Ross said Thursday Trump would be signing an executive action to make the Section 232 investigation a priority and to expedite the process.

At the signing, Trump said: "Steel is critical to both our economy and our military. This is not an area where we can be dependent on foreign countries."

Related: Find more content about Trump's administration in our news and analysis feature.

Ross was questioned on domestic mills' ability to meet US steel demand if the recommended action from the Section 232 review restricted imports.

US steel mills have operated at an average capability utilization of 74.3% so far in 2017, according to American Iron and Steel Institute data released Monday.

Ross said there was room for more production, but he said Commerce will do more research into particular applications.

"One of the factors relating to national security would be if you needed a very rapid buildup. Are the skill sets there? Particularly, are the skill sets there for the very complex alloys that are needed for things like armor plate?" Ross said.

Addressing global steel overcapacity and injurious steel imports with antidumping and countervailing duties does not solve the problem, he said.

"It's a fairly porous system," Ross said, adding that the study will determine if there needs to be "a more comprehensive solution."

The Section 232 investigation could result in a recommendation that covers all steel imports, Ross said.

"It could be broader both geographically and product-wise," he said.

"Times of crisis call for extraordinary measures," Tom Gibson, president of AISI, said in a statement. "Massive global steel overcapacity has resulted in record levels of dumped and subsidized foreign steel coming into the US and the loss of nearly 14,000 steel jobs. The administration launching this investigation is an impactful way to help address the serious threat posed by these unfair foreign trade practices, and we applaud this bold action."

In 2001, Commerce investigated the impact of iron ore and semifinished steel imports under Section 232, but ultimately recommended no action.

--Estelle Tran, estelle.tran@spglobal.com

--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com

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