President Donald Trump today ordered an investigation on the impact of foreign steel on US economy and its defence industry as part of a "vital step" toward making "America strong and prosperous" once again.
"Maintaining the production of American steel is extremely important to our national security and our defence industrial base. Steel is critical to both our economy and our military. This is not an area where we can afford to become dependent on foreign countries," Trump said as he signed a memorandum formalising the probe.
"From now on, we're going to stand up for American jobs, workers, their security and for American steel companies. Since the day I took office, I have followed through on that promise big league, beginning with our withdrawal from the Trans Pacific Partnership," he said.
Trump said he was proud of the withdrawal from the Trans Pacific Partnership, saying it would have been "another NAFTA disaster."
Trump described his memorandum as one that "would prioritise the investigation that began yesterday, and really, long before that" the investigation of foreign steel arriving in US markets, and its affect on national security.
The memorandum asks the Commerce Secretary Wilbur Ross to conduct a review of the impact of foreign steel on US national security.
Based on the findings off the report, Ross will make formal recommendations to the White House "in the very, very near future."
He said his action was "the next vital step toward making America strong and prosperous once again."
Earlier Ross told reporters that last night the Department of Commerce initiated a probe under Section 232 of the Trade Expansion Act of 1962.
The memorandum authorises the Secretary of Commerce to conduct comprehensive investigations to determine the effects of imports of any particular item into the US on the security of the country.
This has been invoked a number of times before, most notably in the period of the Arab oil crisis some years ago.
"It will include consideration of the domestic production needed for our projected national defence requirements. The domestic industry's capacity to meet those requirements, the related human and material resources, the importation of goods in terms of their quantities and use.
"The close relation of national economic welfare to national security. The loss of skills and investment, substantial unemployment, and decrease in government revenue. And finally, the impact of foreign competition on specific domestic industries and the impact of displacement of domestic products by excess of imports," Ross said.
He said over the years the US had conducted 152 steel cases against improper imports of one type of steel or another.
"And we have another 25 cases pending. The problem with those anti-dumping and countervailing duty cases is they're very, very limited in nature to a very, very specific product from a very, very specific country," he said without naming any country.
Ross said this action will help eliminate the problem with that one little product from that one country.
"That country then will start shipping something else in, or they'll modify slightly the product to get around the order, or they will ship it in through another country and pretend that it came from a country not subject to the duties," he said.
"So it's a fairly porous system, and while it has accomplished some fair measure of reduction, it doesn't solve the whole problem. So we're groping here to see whether the facts warrant a more comprehensive solution that would deal with a very wide range of steel products in a very wide range of countries. So that's really the genesis of it," he said.
Ross said steel had been a very important issue in the President's campaign for office and in his actions subsequent to being in office.
"Then-candidate Trump, a quote from him, 'Foreign nations are dumping vast amounts of steel all over the United States, which essentially is killing our steel workers and steel companies. We will put new American steel into the spine of this country. We're going to use American steel, we're going to use American labour, we're going to come first in all deals'," he said.
So this is a consistent investigation with his objectives, he added.
Ross said under the statute, the investigation needs to be completed within 270 days.
"But given the number of trade cases, and therefore the consequent amount of research that we've done, we think it'll be accomplished a lot sooner than that. We will be holding at least one and perhaps more public hearings, and we will be inviting public commentary, as we go through the research project being expedited by this memorandum issued by the President today," he said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)