President Donald Trump has signed a directive to launch a Department of Commerce investigation into whether imports of steel are harming America's national security.
Wilbur Ross, the secretary of commerce, said on a conference call today that last night the agency began an investigation under Section 232 of the Trade Expansion Act of 1962. Ross said this authorizes him to investigate the effects of any imports into the United States on the security of the country.
"Foreign nations are dumping vast amounts of steel all over the United States which is essentially killing our steel workers and steel companies," Trump said on the campaign trail. "We will put new American steel into the spine of this country, we're going to use American steel, we're going to use American labor, we're going to come first in all deals."
The commerce secretary said that steel imports have continued to rise, despite Chinese claims that they were going to reduce their steel capacity.
"In the first couple months of this year alone, steel imports rose 19.6 percent year over year and are now more than 26 percent of the entire U.S. marketplace," Ross said. "It has a very serious impact on the domestic industry."
"The question we will be trying to address in the report is to what extent that impinges on our economic and national defense security," he said.
The investigation will consider the amount of domestic steel production needed for national defense requirements and whether the industries have the capacity to meet those requirements. It will evaluate the importation of goods in terms of their quantities and use and the relationship between national economic welfare to national security.
The Commerce Department will also investigate the impact of foreign competition on domestic industries and the impact of displacement of domestic product by excess of imports.
"Over the years we've conducted 152 steel cases against improper imports of one type of steel or another, and we have another 25 cases pending," Ross said.
"The problem with those antidumping and countervailing duty cases is they are very, very limited in nature to very, very specific products from a very, very specific country," he said. "So what really happens is you bring the action and that will help eliminate the problem with that one little product from that one country."
"That country will then start shipping something else in or they will modify slightly the product to get around the order or they will ship it in through another country and pretend that it came from a country not subject to the duty," Ross explained. "So it's a fairly porous system and while it has accomplished some fair measure of reduction, it doesn’t solve the whole problem."
"So we’re groping here to see whether the facts warrant a more comprehensive solution that would deal with a wide range of steel products in a very wide range of countries," Ross said.