by Itunuoluwa Adebo
President Donald Trump has launched an investigation on Thursday to determine if Chinese and other foreign-made steel threatens U.S. national security, raising the possibility of new tariffs and triggering a rally in U.S. steel stocks.
Wilbur Ross US Commerce Secretary cast the decision to initiate the probe as a response to Chinese exports of steel into the United States reaching the point where they now have 26 percent of the market. Chinese steel imports are up nearly 20 percent in the early months of this year alone, he said.
This seems an unusual step as Trump is pressuring China to do more to curb the excesses of a increasingly belligerent North Korea. Trump raised the possibility of using trade as a lever to coax China to do more when Xi Jinping visited Trump in Florida earlier this month.
Ross told reporters at a White House briefing that Chinese steel exports have continued to rise “despite repeated Chinese claims that they were going to reduce their steel capacity when in fact they have been increasing it consistently … It’s a very serious impact on the domestic industry.”
Trump signed a directive asking for a speedy probe under Section 232 of the Trade Expansion Act of 1962 at a White House event that included chief executives of several U.S. steel companies. The law allows the president to impose restrictions on imports for reasons of national security.
News of the move triggered a rally for steel stocks, including Steel Dynamics Inc, AK Steel, US Steel, Nucor, Cliffs Natural Resources, and Allegheny Technologies.
The move is another step in Trump’s “America First” policies in which he has tried to boost U.S. manufacturers and preserve American jobs. The Commerce Department will have 270 days to complete the probe.
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