Trump Executive Order invokes rarely-used provision of US trade law

President Donald Trump is expected to sign a new Executive Order (EO) today, 20 April 2017, invoking a rarely-used provision of US trade law, Section 232 of the Trade Expansion Act of 1962, to determine whether imports of steel into the United States should be restricted on national security grounds, according to POLITICO Pro.

The proposed EO, claims the American law firm Wiley Rein LLP, would direct Secretary of Commerce Wilbur Ross to launch an investigation to determine if steel is being imported in sufficient quantities or under such circumstances that it threatens to impair national security and report to the President within 270 days. The President would then have 90 days to determine whether to 'adjust' imports or take other non-trade related action, and 15 days to take such action that the President determines is warranted.

According to Wiley Rein, the statute directs the Secretary of Commerce and the President to consider, among other factors, domestic production needed for projected national defense requirements and the impact of foreign competition on the economic welfare of domestic industries.

"President Trump appears to be making good on his campaign promise to use every lawful presidential power, including Section 232, to address unfairly traded imports. A number of steel industry executives have been invited to the White House to meet with President Trump today. It will be important to keep abreast of any developments on this front to determine the impact of the EO," Wiley Rein said.

Thomas J. Gibson, president and CEO of the American Iron and Steel Institute (AISI), applauded the executive memorandum signed by President Trump today and commented: “Times of crisis call for extraordinary measures. Massive global steel overcapacity has resulted in record levels of dumped and subsidised 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." 

Gibson said that the domestic steel industry was the backbone of the US manufacturing sector. "Our continued ability to meet our national security needs is dependent on the industry remaining competitive in the global marketplace. We stand ready to work with the Administration on this initiative,” he said.

Philip K Bell, president of the Steel Manufacturers Association (SMA), North America's largest steel industry trade association and the primary association for electric arc furnace steel producers, was also supportive of President Trump. “This demonstrates that the administration recognises the vital role that the domestic steel industry plays in our country’s national security,” he said.

Bell added: “By invoking this portion of US trade law, Section 232 of the Trade Expansion Act of 1962, to determine if imports of steel into the United States should be restricted on national security grounds, the President appears to be using every tool in his presidential toolkit to support 21st century steelmaking.”

“We applaud the President’s efforts and it is gratifying to see both steel companies and organised labour taking a solution-focused approach to address this issue,” Bell concluded.  

Chuck Schmitt, president of SSAB Americas, and other North American steel industry leaders met with Donald Trump and witnessed the signing of the EO. 

According to Schmitt, "We've been encouraged to hear the president commit to fair trade policy, as well as tax reform, regulatory reform and infrastructure investment. The industry's voice is being heard in these vital efforts to create jobs and spur economic growth. We will continue to drive bipartisan consensus to address problems like unfairly-traded imports and overcapacity – issue on which we can all agree."

SSAB Americas operates numerous steelmaking and processing facilities in regions and states across the US, providing steel for many industries including energy, construction and transportation.

Of being in the White House and meeting President Trump, Schmitt said, "It was a proud moment for SSAB today. I am privileged to represent SSAB employees and work with industry counterparts and this administration to advance the best interests of SSAB."

But it's not all back-slapping bon homie for President Trump. 

Richard Chriss, president of the American Institute for International Steel (AIIS), which claims to advance free and responsible trade in steel, says he is “concerned about the nature and scope of this investigation,” which, he said, should not be used as a basis to shield domestic manufacturers from fair price competition.

“At the very least, we hope that the Secretary will consider the national security and economic implications of protectionist policies that would limit the availability of steel and drive up its price,” Chriss said.

“In addition, we should remember that it is quite likely that any trade restrictions imposed by the United States will invite retaliatory measures by other nations against exports from the United States, both steel-related and non-steel-related, which could have serious economic and security consequences of their own.”

"We can and should address the global excess steel capacity problem without resorting to protectionist measures of our own," Chriss added.

“Free trade in steel means that Americans pay global market prices,” Chriss said. “While this competition may indeed reduce the profits of domestic manufacturers, other steel-related businesses and consumers benefit from not having to pay the artificially high prices that would result from measures that restrict trade."

Despite these concerns, Chriss said that AIIS will seek to work with investigators “to provide objective data and information that will counter the misperceptions about steel imports on which this investigation appears to be based.”

“An unbiased examination will show that imported steel strengthens the nation’s economy and security,” Chriss said. “AIIS stands ready to work with the Secretary and his staff on this critical issue.”

John Brett, president and CEO of ArcelorMittal USA, joined was also at the White House and commented, “We very much appreciate the Administration’s decision to initiate and expedite the Section 232 investigation. ArcelorMittal USA is a proud supplier of American-made steel for national defense applications, from nuclear submarines and aircraft carriers to missiles and tanks,” he said. “Additionally, the steel we produce for the energy and infrastructure markets is critical to our economic and national security. The global steel market is in crisis because of China’s excess steel capacity, and we welcome the Administration’s efforts to aggressively address this problem.”