President Donald Trump has launched an investigation into steel imports and could impose a tariff on steel produced overseas if it is found to cost American jobs or threaten national security.
Trump signed a memorandum April 20 that directs the Secretary of Commerce to investigate whether steel imports cost jobs within the U.S. steel industry and submit a report with 270 days.
“Maintaining the production of American steel is extremely important to our national security and our defense industrial base,” Trump said during an Oval Office signing ceremony on April 20. “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.”
Specifically the investigation will focus on whether imported steel displaces domestic production, has any negative effects on government revenue and “any harm steel imports cause to the economic welfare of the United States, recognizing the close relationship between economic prosperity and national security.”
A spokeswoman for Huntington Ingalls Industries [HII] – builder of Navy ships including nuclear submarines and aircraft carriers and therefore a consumer of enormous quantities of steel – on April 20 told sister publication Defense Daily that all of its steel is domestically sourced.
Lockheed Martin [LMT], one of two companies that provides the Littoral Combat Ship to the U.S. Navy, only uses domestically produced steel on its vessel, a company spokeswoman told sister publication Defense Daily. She also said the company doesn’t use steel from China on the F-35 fighter.
The memorandum contains language that seems to preempt the results of the investigation it orders, claiming in the text that “artificially low prices caused by excess capacity and unfairly traded imports suppress profits in the American steel industry.”
That, in turn “discourages long-term investment in the industry and hinders efforts by American steel producers to research and develop new and better grades of steel,” the memo says.
“If the present situation continues, it may place the American steel industry at risk by undermining the ability of American steel producers to continue investment and research and development, and by reducing or eliminating the jobs needed to maintain a pool of skilled workers essential for the continued development of advanced steel manufacturing,” the memo warns.
If the Commerce Department finds that steel imports “threaten to impair the national security” Trump may take “several actions” including tariffs, according to a statement from the White House.
“Core industries such as steel (including specialty steel unique to defense applications), aluminum, vehicles, aircraft, shipbuilding, and semiconductors are critical elements of our manufacturing and defense industrial bases, which we must defend against unfair trade practices and other abuses,” Trump’s memo reads. “In the case of steel, both the United States and global markets for steel products are distorted by large volumes of excess capacity ‑‑ much of which results from foreign government subsidies and other unfair practices.”
The American Iron and Steel Institute (AISI) quickly issued a statement in support of the investigation, claiming a global oversupply of steel has cost 14,000 steel jobs.
“Massive global steel overcapacity has resulted in record levels of dumped and subsidized foreign steel coming into the U.S. and the loss of nearly 14,000 steel jobs,” AISI President and Chief Executive Thomas J. Gibson said in a prepared statement. “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.”
“The domestic steel industry is the backbone of our manufacturing sector, and our continued ability to meet our national security needs is dependent on the industry remaining competitive in the global marketplace,” he added.