The Trump administration has recently announced Section 232 investigations into whether steel and aluminum imports impair national security. A key issue will be whether these products are "being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security." It certainly feels as though the Trump administration has made up its mind, and that there will be an affirmative finding in both cases, but we'll see what happens.
At the same time, I'm not convinced they will actually impose any trade restrictions here. Rather, this could be just an attempt to generate more negotiating leverage. The idea would be to create the realistic threat of trade restrictions, in order to force others to offer more concessions than they otherwise would. I'm not convinced the strategy will work in these circumstances, but I can see why someone would consider trying it.
But for the sake of argument, let's say they are planning to impose trade restrictions. If they do, we could see a WTO claim (which would take a while to resolve and be controversial) or even retaliation imposed right away based on similar determinations by other countries.
We could also see an appeal to U.S. courts. Is there any chance of success here? I would expect a lot of deference to government agencies on questions of national security, so it could be tough, unless the reasoning in the report is completely incoherent.
But how about the argument that this case has been touted by the administration as taking on dumping and other unfair trade practices? I mentioned this issue here in relation to a WTO claim. Recall that Trump said:
This investigation will look at how steel imports are impacting the United States national security, taking into account foreign practices such as steel dumping. Dumping is a tremendous problem in this country. They're dumping vast amounts of steel in our country, and they're really hurting not only our country, but our companies. Their targeting of American industry and other foreign strategies designed to undermine American industry as a whole.
And the Presidential memorandum ordering the steel investigation said:
Section 1. Policy. 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. 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 United States has placed more than 150 antidumping and countervailing duty orders on steel products, but they have not substantially alleviated the negative effects that unfairly traded imports have had on the United States steel industry. Repeated efforts by the United States to encourage other countries to reduce and address the underlying causes of excess capacity in the steel market have had little meaningful effect.
The artificially low prices caused by excess capacity and unfairly traded imports suppress profits in the American steel industry, which discourages long-term investment in the industry and hinders efforts by American steel producers to research and develop new and better grades of steel. 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.
Is there an argument that the administration is improperly using these national security provisions to take on dumping (and subsidies), in contravention of the relevant statutes?
