Trade Cases

Section 232 Delayed Until After G20

July 6, 2017

A decision on Section 232 trade action is on hold until sometime after the G20 summit in Hamburg, Germany, this week. U.S. Department of Commerce officials have not announced a release date for the findings of the investigations on steel and aluminum imports and their impact on national security. The original due date was June 30th set by President Trump when the investigation was first assigned to the DOC.

The Trump administration was anticipating resistance from foreign leaders at the summit, but reports indicate there may be disagreement even within the president’s cabinet on the appropriate scope of Section 232 and its recommended remedies.

The administration plans to include in the investigation not only steel required for national security but also for infrastructure needs, according to some media reports. This runs contrary to those who believe Section 232 should be limited to defense.

National Economic Council Director Gary Cohn told reporters the Section 232 report would be used during the G20 Summit “as an opportunity to talk with many of our trading partners around the world.” He said he hopes G20 members will work with the U.S. to solve the world’s overcapacity and dumping problems. “But let us be clear,” he added. “We will act to ensure a level playing field for all.”

In response to criticism that the U.S. is moving towards a policy of isolation and protectionism, Cohn said, “On trade, no less than on alliances, America First does not mean America alone.”

Heads of state have been critical of the investigation and said they will not hesitate to use retaliatory measures should onerous trade restrictions be imposed by the U.S. The G20 meetings, set to begin this afternoon, are sure to bring further criticism of the Section 232 investigation.

The pending report has added to tensions over renegotiation of NAFTA as well. The U.S. Canadian embassy released a report this week highlight the steel trade surplus the U.S. has with Canada. In 2016 the U.S. exported $9.7 billion of iron and steel products to Canada while importing $7.4 billion for a U.S. trade surplus of $2.3 billion.

Ways and Means Committee Chairman Kevin Brady (R-TX) told C-Span last week he was concerned about broad restrictions resulting in retaliation from other countries.

“Our advice to the president has been pretty public: Take your time to get it right,” said Brady. “There is overcapacity in steel, there are issues to be addressed here. Make sure our response — especially since the White House is using a tool tied to national security — make sure that you’re listening to everyone involved in this, that the result is balanced, it’s effective.”

“We want to make sure that how the White House frames their ultimate action that it doesn’t punish our allies who are trading fairly, we want to make sure it doesn’t give a green light to those who trade unfairly to do more of it,” he added.

Brady declined to say whether Congress would take oppose measures taken as result of the investigation. “I think it depends on what the action is to see if Congress believes it has the need for a response.”

Ways and Means committee member Richard Neal (D-MA) suggested to Inside U.S. Trade that the outcome of the 232 investigation could be milder than Trump has promised.

“I think one consistent theme has emerged with the administration and trade,” said Neal, “their bark tends to have been worse than their bite. So I think we just have to wait and see.”