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Trump administration probe into steel imports nearly done -US official
June 16, 2017 / 3:50 PM / a month ago

Trump administration probe into steel imports nearly done -US official

WASHINGTON, June 16 (Reuters) - A Trump administration investigation into whether foreign-made steel imports pose a risk to U.S. national security is nearly done, a senior U.S. official said on Friday, ahead of the expected release of the probe's findings late next week.

"It is nearing conclusion," the U.S. administration official told Reuters of the investigation, ordered by U.S. President Donald Trump in April under the rarely used section 232 of the Trade Expansion Act of 1962.

The law, which has been used twice before - to investigate oil in 1999 and iron and steel in 2001 - allows the president to impose restrictions on imports for reasons of national security.

The administration says the lack of domestic producers could impede U.S. defense procurement for its armed forces as well as for strategically important infrastructure.

Foreign steel companies have been concerned the probe may be aimed at shoring up American producers and cutting out foreign competition. The protectionist move would also shore up jobs, a Trump campaign pledge.

Administration officials are expected to brief the Senate Finance and House Ways and Means committees on the "context and process" of the inquiry before its findings are released.

European steel association (Eurofer) chief Axel Eggert said the European Commission was concerned that EU steel exports could be included in the broad scope of the investigation. He said the association was exploring options, including submitting a complaint to the World Trade Organization.

"The EU is a NATO partner of the U.S., therefore this doesn't make sense. The EU should have a full exemption from 232 measures," Eggert told Reuters.

"We fear there could be a broad application of section 232 that would be reason enough to provoke a reaction from the EU under WTO rules. The Commission is looking into all the options," he added.

Possible Tariffs

There has been concern that Chinese producers have routed steel and aluminum through countries such as Vietnam to avoid U.S. duties and scrutiny.

Commerce Secretary Wilbur Ross, a billionaire businessman who made part of his fortune investing in steel, coal and autos, said the investigation had been spurred by the fact that Chinese exports of steel made up 26 percent of the U.S. market for the metal.

China is the largest national steel producer and makes far more of the metal than it consumes. It sells excess output overseas, often undercutting the prices offered by producers in the importing nations, according to U.S. steel companies and officials.

Ross has said that if the Commerce inquiry finds the U.S. steel industry has been hurt by excessive steel imports, he would recommend retaliatory measures that could include tariffs.

Still, Tu Xinquan, a trade expert at Beijing's University of International Business and Economics, said the United States was not a major export market for Chinese steel.

"China does not have to worry about it so much," Tu said, "there are many other countries which will be even more angry than us."

Deborah Elms, who runs the Asian Trade Centre consultancy from Singapore, said U.S. retaliatory steps would hurt American firms.

"The collateral damage is going to be very significant," said Elms, "It will probably hurt the Americans in ways they don't seem to grasp and catch firms that are paying absolutely no attention at all completely by surprise."

U.S. steel companies' share prices have dropped off since the euphoria of Trump's win in the U.S. presidential election on Nov. 8. In the month following his victory, the S&P 1500 steel index surged 36 percent.

The index has given up the bulk of those gains, and is now up about 5 percent since early November, underperforming a 13.7 percent advance in the broader U.S. stock benchmark, the S&P 500.

Earnings from U.S. Steel Corp have disappointed as well, and the outlook from Nucor Corp was downbeat. (Additional reporting by Michael Martina in Beijing, Lewis Krauskopf in New York, and Maytaal Angel in London; Editing by Bernadette Baum)

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