President Instructs Commerce Secretary to Launch Investigation of Harm Caused by Steel Imports on U.S. National Security
Philip Gallas, Esq.
Nelson Mullins Riley & Scarborough LLP
April 20, 2017
President Trump has signed an executive memorandum instructing the Secretary of Commerce to conduct an investigation of the potential harm caused by steel imports on U.S. national security. The President asked Secretary Wibur Ross to initiate an investigation under Section 232(B) of the Trade Expansion Act of 1962. This statute, not used since 2001, gives the President broad latitude to impose tariffs on foreign steel imports that hurt U.S. national security, and is product-oriented (steel), rather than directed at specific countries. The comprehensive investigation will examine the effects of steel imports on U.S. national security and consider: 1) the domestic production needed for U.S. projected national defense requirements; 2) the domestic industry's capacity to meet those requirements; 3) the related human and material resources; 4) the importation of goods in term of their quantities and use; 5) the close relation of national economic welfare to national security; 6) the loss of skills and investment, substantial unemployment and decrease in government revenue; and 7) the impact of foreign competition on specific domestic industries, and the impact of displacement of a domestic product by excess of import.
The administration cites a rise of 19.6 percent in steel imports into the U.S. from February 2016 though February 2017, despite production by the existing domestic steel industry. As part of the President's "America First" policies, Commerce characterizes this trade action as "Taking Steps to Put America's Steel Industry First," underscoring the Administration's intent to boost domestic manufacturing and maintain jobs. At the same time, the Administration continues to step up its fight against "unfair trading practices," such as dumping and subsidization of foreign steel imports, which harm or threaten to harm U.S. steel companies and their workers.
Secretary Ross plans to hold one or more public hearings as well as invite public comment as Commerce conducts its investigation. Under Section 232, Commerce must complete its investigation and issue a report within 270 days, whereupon the President has 90 days in which to accept or reject Commerce's recommendations for possible remedies (such as tariffs). Notwithstanding this timeline, the executive memorandum has directed the Secretary of Commerce to expedite the investigation, and Mr. Ross had indicated his determination to complete the investigation "much sooner." Should the U.S impose tariffs on foreign steel, the possibility remains that such action may lead to retaliation by our trading partners, whether unilateral action by a country or resort to a dispute panel before the WTO.
International attorneys at Nelson Mullins can provide further guidance concerning this and related trade actions. For further information, please contact Phil Gallas firstname.lastname@example.org at 202.689.2994 or Buzz Burwell email@example.com at 864.373.2212.
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