US Investigation on Steel Imports (Photo : Getty Images)
The U.S. government has launched an extensive investigation Wednesday, April 19, to determine if steel imports, including those from China, threaten national security, the USA Today reported.
The probe would also give U.S. President Donald Trump legal power to prevent steel imports from any country, the report said.
U.S. Secretary of Commerce Wilbur Ross said that steel imports in the first quarter increased by 19.6 percent, which had "a very serious impact on the domestic industry."
Ross added that Chinese steel imports account for about 26 percent of the U.S. market.
On Thursday, April 20, Trump signed a memorandum ordering Ross to speed up the investigation as he said that his administration would "fight for American workers and American-made steel, and that's beginning immediately."
According to the report, the new investigation on steel imports could have bigger results than the investigation being conducted on unfair trade practices.
"Maintaining the production of American steel is extremely important to our national security and our defense industrial base," Trump told reporters. "Steel is critical to both our economy and our military. This is not an area where we can afford to become dependent on foreign countries."
Legal basis for investigation
The report said that the legal basis for the investigation is Section 232 of the Trade Expansion Act of 1962, which was used in 2001 by former President George W. Bush when the government conducted an investigation into iron ore and semi-finished steel imports. But the Bush administration did not take any action on the issue.
Although the law says that the Secretary of Commerce has 270 days to finish the investigation, Trump wants it done in only 50 days.
While the Trade Expansion Act is focused on protecting industries vital to national security, Trump wants the probe to focus on the impact of steel imports to American workers and the federal tax revenues.
Experts said that making national security as a basis for the probe has given Trump extensive legal powers, under both U.S. and international law.
Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, said that the U.S. may have stretched the definition of the World Trade Organization's exemptions on national security-related trade restrictions.
"This is not a defense-motivated order. This is a commercially oriented order," Hufbauer said. "The Pentagon, on its own initiative, has never asked for restraints on steel."
Ross, however, said that the two issues are related. He cited, as an example, a case that if the U.S. needs to support its war effort, they would need skilled American workers to produce complex alloys to be used for forging steel armor.
Other legal moves
In addition to the Section 232 investigation, Trump has also signed several executive orders aimed at unfair trade practices such as dumping. In 152 cases, the Commerce Department has imposed penalties, while 25 more cases are pending.
Ross said that the legal remedies were not enough.
"The problem with those countervailing duty and anti-dumping cases is that they're very limited in nature, to a very, very specific product from one specific country," Ross said.
"It doesn't solve the whole problem," Ross added. "So we're groping here to see whether the facts warrant a more comprehensive solution to deal with a wide range of steel products from a wide range of countries."
Trump said that the dumping problem is a worldwide issue, and he was not worried if the action would hurt China-U.S. relations, even at a time when the U.S. needs China's help to put pressure on North Korea.
