Trade Cases

AIIS: Terminate Section 232

October 4, 2017

The American Institute for International Steel, representing 120 companies supporting 1.2 million jobs in the steel-using sectors and 84,000 direct and indirect jobs in the marine transportation system, wrote to the president this week requesting termination of the Section 232 investigation on steel imports.

AIIS said they appreciate that a significant part of the rationale for the investigation is to address steel market distortions caused by global overcapacity. However, trade restrictions imposed by Section 232 will do nothing to counter the use of state subsidies by countries, such as China, which encourage overcapacity.

The United States steel industry is currently profitable and one of the most protected sectors in the country, said AIIS. The majority of antidumping and countervailing rulings listed by Commerce concern the steel industry.

Retaliation by the nation’s trading partners, particularly on the agriculture sector, is likely should the United States impose Section 232 restrictions on steel imports, they said.

“Mr. President, as you know, trade retaliation is always a ‘lose-lose’ proposition,” wrote AIIS. The association cited the trade dispute in 2009 when China retaliated with tariffs on U.S. chicken exports in response to duties placed on imported Chinese tires.

Although the United States may eventually prevail in a trade dispute over steel imports, said AIIS, the legal battle may take years and cost millions of dollars while irretrievably losing market share for the U.S.

Trade restrictions bring unintended consequences to the supply chain. Ocean vessels carrying inbound steel to the United States are also the vessels that carry U.S. grain exports overseas. With import restrictions in place on steel imports, fewer vessels will be available at U.S. ports to transport grain, putting 50,000 American jobs at risk.

AIIS told President Trump that while they absolutely support a strong steel industry, it is the entire steel supply chain that makes America great.

“Let us not attempt to further protect the few at the expense of the many. Let us terminate the Section 232 investigation now, and keep our country’s ports, and the many Americans whose livelihoods depend on them, working.”