AIIS: Section 232 Will Lead to Retaliation and Recession

“The suggested measures, according to the agency, are intended to ‘increase domestic steel production’ to a level ‘needed for the long-term viability of the industry.’ But this sector is already the most protected in the country, and whatever problems it has have not been caused by steel produced elsewhere. While the report cites several mill shutdowns, those facilities were closed not because of imports, but because they were antiquated and inefficient. In contrast, the CEO of one of the country’s newest steelmakers, Big River Steel – which faces the same competition from foreign companies as legacy firms – has said that, ‘automotive manufacturers [are] beating a path to our door’ because, unlike those other manufacturers, it is not relying on decades-old technology.

“The national security foundation for the recommended tariffs and quotas is simply an unfortunate attempt to circumvent normally applicable WTO rules. If the United States chooses to abandon long-standing principles of free trade that we have helped establish, and that have contributed so much to our national prosperity, Pandora’s box will be opened, and other countries will be sure to assert ‘national security’ reasons for protecting many other politically sensitive products from export competition. The retaliatory measures that will follow will drive up manufacturing costs, inflate prices, shrink high-value U.S. exports, and push the United States and the world toward recession.

“The report’s recommendations would reward lack of innovation, and would risk the nation’s well-being in order to benefit a few politically favored companies. We urge President Trump to protect the country from the damage that tariffs, quotas, and other restrictive measures would inflict, and reject them outright.”