Trade Cases

Section 232 Statutory Deadlines for Steel

July 27, 2017

We asked trade attorney Lewis Leibowitz what impact there would be on the Section 232 investigation and timing for decisions based on the comments made by President Trump of a delay in the process. Here is what Leibowitz told us earlier today:

On Tuesday, July 25, President Trump revealed that he will indefinitely postpone a decision on imposing steel import relief based on national security considerations. The Commerce Department initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, in April. The Commerce phase of the investigation was originally to be finished by the end of June, but delays multiplied. The G20 meetings during the week of July 10 brought forth vigorous opposition from our main allies and trading partners, who vowed immediate and vigorous retaliation if import limits were imposed on their steel industries. Steel-using manufacturers, importers, traders and ports argued that the harm from import restrictions would be greater than any possible benefit to steel producers, perhaps rendering large segments of the U.S. manufacturing economy uncompetitive. Several agencies within the federal government also argued against import restrictions because of concerns over harm to the domestic economy and foreign policy concerns.

Last week, I wrote that Secretary Ross gathered steel industry CEOs in Washington to urge them to put “visible pressure” on the White House to take action against steel imports. There has not been much evidence of such pressure so far, but the steel industry has continued to call for immediate action.

In the aftermath of President Trump’s announced delay in the 232 decision in a Wall Street Journal interview, the United Steelworkers Union issued a statement calling the delay in the Section 232 decision “devastating.” Clearly this delay hurts the chances for 232 import relief. Thus far, however, AISI and SMA, the two major steel producer trade associations, have not issued a statement commenting on the indefinite delay in a Section 232 decision.

The indefinite postponement of a 232 decision brings into play the statutory deadlines for action. Under the section 232 statute, the Secretary of Commerce must issue a report on whether imports of steel threaten to impair the national security within 270 days of the investigation’s initiation. The deadline date for the steel investigation is Jan. 16, 2018. Unless the investigation is terminated before that date, the Commerce Department must issue a decision and a recommended remedy to the president by that date. The president then has 90 days to make his decision, or April 11, 2018.

Imports have increased in many sectors of the steel industry since April; this delay will likely lead to increased imports and downward pressure on steel prices in the United States. This is good for steel users, who employ about 60 workers for every worker in steel production, but is not good news for U.S. steel producers. This will likely lead to more trade remedy cases against new products and new countries.

SMU Note: Attorney Lewis Leibowitz, along with Daniel Pearson of the Cato Institute (and former chairman of the International Trade Commission), Philip Bell of the Steel Manufacturers Association and William Gaskin president emeritus of the Precision Metalforming Association, will participate in a “free and fair trade” panel at our 7^th SMU Steel Summit Conference on Aug. 28-30, 2017. Leibowitz and Pearson will also explain the differences in the many trade suits on flat rolled and plate products in a special “Pre-Summit” program beginning at 2 p.m. ET on Monday, Aug. 28 at the Marriott Gateway Hotel (host hotel next to the Georgia International Convention Center).