US President Donald Trump told reporters at the White House on Monday (June 13) that legislation that addresses the dumping of foreign steel and aluminum in the US will come “soon.”
In late April, Trump directed the US Department of Commerce to investigate steel and aluminum imports under Section 232 of the Trade Expansion Act of 1962. If the Department of Commerce finds that imports of steel and aluminum present a threat to national security, the president can impose tariffs or a ban on importing those metals.
White House Spokesman Sean Spicer said this week that Commerce Secretary Wilbur Ross should have an update on the 232 review later this week.
“When that comes out, there are certain recommendations that will be made to Congress to address anti-dumping provisions in the steel and aluminum and other markets,” Spicer was quoted as saying by Bloomberg.
The Aluminum Association, which represents the majority of US aluminum production and fabrication companies, has applauded the 232 investigation. Association President and CEO Heidi Brock said Trump’s call for action “recognizes the value of U.S. aluminum industry, its full growth potential and its ability to compete successfully in the global marketplace.”
However, trade experts have cautioned that penalties could harm US manufacturers that rely on foreign-made steel and aluminum if they cause exporting countries to retaliate.
Gregory Spak, head of the international trade group practice of law firm White & Case, has said an imposed remedy would have to be implemented wisely. “Otherwise, the administration could cause some damage to downstream U.S. steel producers and workers, and nobody wants that,” he commented.
News of the upcoming 232 investigation update comes as over two dozen US lawmakers have submitted a signed letter urging US Treasury Secretary Steven Mnuchin to reject a proposed sale of US aluminum products maker Aleris to China Zhongwang Holdings.
According to the June 9 letter, allowing the $2.33-billion sale to proceed would be a “strategic misstep,” and the Committee on Foreign Investment in the US should “exercise extreme caution when a foreign investment transaction includes the transfer of military proficiencies and sensitive technology to China.” Aleris spokesman Jason Saragian said the company does not make defense products in the US and the letter is “based on misinformation.”
Meanwhile, aluminum prices have come down from a two-year high of $1,981 per tonne in March. As of June 12, aluminum was trading at $1,887 on the LME.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.