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Trump targets cheap Chinese steel in probe, rallying U.S. steel stocks

Reuters  |  WASHINGTON 

By Steve Holland and Mike Stone

(Reuters) - President Donald on Thursday launched a trade probe against and other exporters of cheap into the U.S. market, raising the possibility of new tariffs and sending of some U.S. makers up over 8 percent.

Citing concerns about national security, made the announcement at a White House ceremony with U.S. executives from Nucor Corp , United States Corp and TimkenSteel Corp alongside Commerce Secretary Wilbur Ross, a billionaire businessman who made part of his fortune investing in the business.

"is critical to both our economy and our military," said Trump, a Republican. "This is not an area where we can afford to become dependent on foreign countries."

won many votes in industrial states like Michigan and Pennsylvania with a pledge to boost manufacturing and crack down on Chinese trade practices.

is the largest national producer and makes far more than it consumes, selling the excess output overseas, often undercutting domestic producers.

The unusual step of launching an investigation comes as is pressuring to do more to rein in an increasingly belligerent North Korea. When Chinese President Xi Jinping visited in Florida earlier this month, raised the possibility of using trade as a lever to coax to do more.

"Everything they export is dumping," said Derek Scissors, Asia economist at the American Enterprise Institute, a think tank.

Ross cast the decision to initiate the probe as a response to Chinese exports of into the United States reaching the point where they now account for 26 percent of the U.S. market.

Chinese exports have risen "despite repeated Chinese claims that they were going to reduce their capacity," said Ross, whom The Economist, a business magazine that champions free trade, in 2004 labelled "Mr. Protectionism" for his history of owning businesses protected from foreign competition.

Ross said that if the Commerce inquiry finds the U.S. industry is suffering from too much imports, he will recommend retaliatory steps that could include tariffs.

Diverging from the Obama administration's approach to the issue, which relied largely on filing complaints to the World Trade Organization (WTO), ordered a probe under Section 232 of the Trade Expansion Act of 1962, which lets the president impose restrictions on imports for reasons of national security.

In October 2001, a Commerce Department investigation found "no probative evidence" that imports of iron ore and semi-finished threaten to impair U.S. national security.

had rallied after won the November election amid promises for increased infrastructure spending. On Thursday of Dynamics Inc , AK Holding Corp , Cliffs Natural Resources Inc , Allegheny Technologies Inc and other makers closed between 4 percent and 8.5 percent higher.

PROFITS CITED

The United States has nearly 100 plants that make millions of tons of annually. The U.S. government has attempted to shield them from cheap foreign chiefly through the WTO, but the administration said this has had little impact.

"The artificially low prices caused by excess capacity and unfairly traded imports suppress profits in the American industry," the administration said in a statement.

Nucor Chairman John Ferriola said in a statement that the steelmaker welcomed the president's move. "We look forward to continuing to work with the president and Secretary Ross to ensure our trade laws are enforced so that U.S. manufacturers can compete on a level-playing field," he said.

Experts were sceptical about the administration's argument that cheap Chinese threatened U.S. national security.

The Defense Department's annual requirements comprise less than 0.3 percent of the industry's output by weight.

"There is no doubt that plays a role in our national security and the manufacturing of U.S. weapons systems," said Jeff Bialos, a partner at law firm Eversheds Sutherland, who has worked on trade cases in the past.

"But the Department of Defense only consumes a small portion of domestic output, and this has decreased over the past decade as composites technology has advanced," Bialos said.

Some of the military's largest consumers of are U.S. Navy shipbuilders Huntington Ingalls Industries Inc and Lockheed Martin Corp .

Scissors said the United States has other ways to take on over trade issues, other than invoking national security.

"Talking about it as a national security issue - I don't think it's necessary and I don't think it's justified," he said.

(Additional reporting by Jeff Mason in Washington; and Luciana Lopez and Caroline Valetkevitch in New York; editing by Kevin Drawbaugh and Nick Zieminski)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Trump targets cheap Chinese steel in probe, rallying U.S. steel stocks

WASHINGTON (Reuters) - President Donald Trump on Thursday launched a trade probe against China and other exporters of cheap steel into the U.S. market, raising the possibility of new tariffs and sending shares of some U.S. steel makers up over 8 percent.

By Steve Holland and Mike Stone

(Reuters) - President Donald on Thursday launched a trade probe against and other exporters of cheap into the U.S. market, raising the possibility of new tariffs and sending of some U.S. makers up over 8 percent.

Citing concerns about national security, made the announcement at a White House ceremony with U.S. executives from Nucor Corp , United States Corp and TimkenSteel Corp alongside Commerce Secretary Wilbur Ross, a billionaire businessman who made part of his fortune investing in the business.

"is critical to both our economy and our military," said Trump, a Republican. "This is not an area where we can afford to become dependent on foreign countries."

won many votes in industrial states like Michigan and Pennsylvania with a pledge to boost manufacturing and crack down on Chinese trade practices.

is the largest national producer and makes far more than it consumes, selling the excess output overseas, often undercutting domestic producers.

The unusual step of launching an investigation comes as is pressuring to do more to rein in an increasingly belligerent North Korea. When Chinese President Xi Jinping visited in Florida earlier this month, raised the possibility of using trade as a lever to coax to do more.

"Everything they export is dumping," said Derek Scissors, Asia economist at the American Enterprise Institute, a think tank.

Ross cast the decision to initiate the probe as a response to Chinese exports of into the United States reaching the point where they now account for 26 percent of the U.S. market.

Chinese exports have risen "despite repeated Chinese claims that they were going to reduce their capacity," said Ross, whom The Economist, a business magazine that champions free trade, in 2004 labelled "Mr. Protectionism" for his history of owning businesses protected from foreign competition.

Ross said that if the Commerce inquiry finds the U.S. industry is suffering from too much imports, he will recommend retaliatory steps that could include tariffs.

Diverging from the Obama administration's approach to the issue, which relied largely on filing complaints to the World Trade Organization (WTO), ordered a probe under Section 232 of the Trade Expansion Act of 1962, which lets the president impose restrictions on imports for reasons of national security.

In October 2001, a Commerce Department investigation found "no probative evidence" that imports of iron ore and semi-finished threaten to impair U.S. national security.

had rallied after won the November election amid promises for increased infrastructure spending. On Thursday of Dynamics Inc , AK Holding Corp , Cliffs Natural Resources Inc , Allegheny Technologies Inc and other makers closed between 4 percent and 8.5 percent higher.

PROFITS CITED

The United States has nearly 100 plants that make millions of tons of annually. The U.S. government has attempted to shield them from cheap foreign chiefly through the WTO, but the administration said this has had little impact.

"The artificially low prices caused by excess capacity and unfairly traded imports suppress profits in the American industry," the administration said in a statement.

Nucor Chairman John Ferriola said in a statement that the steelmaker welcomed the president's move. "We look forward to continuing to work with the president and Secretary Ross to ensure our trade laws are enforced so that U.S. manufacturers can compete on a level-playing field," he said.

Experts were sceptical about the administration's argument that cheap Chinese threatened U.S. national security.

The Defense Department's annual requirements comprise less than 0.3 percent of the industry's output by weight.

"There is no doubt that plays a role in our national security and the manufacturing of U.S. weapons systems," said Jeff Bialos, a partner at law firm Eversheds Sutherland, who has worked on trade cases in the past.

"But the Department of Defense only consumes a small portion of domestic output, and this has decreased over the past decade as composites technology has advanced," Bialos said.

Some of the military's largest consumers of are U.S. Navy shipbuilders Huntington Ingalls Industries Inc and Lockheed Martin Corp .

Scissors said the United States has other ways to take on over trade issues, other than invoking national security.

"Talking about it as a national security issue - I don't think it's necessary and I don't think it's justified," he said.

(Additional reporting by Jeff Mason in Washington; and Luciana Lopez and Caroline Valetkevitch in New York; editing by Kevin Drawbaugh and Nick Zieminski)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
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Trump targets cheap Chinese steel in probe, rallying U.S. steel stocks

By Steve Holland and Mike Stone

(Reuters) - President Donald on Thursday launched a trade probe against and other exporters of cheap into the U.S. market, raising the possibility of new tariffs and sending of some U.S. makers up over 8 percent.

Citing concerns about national security, made the announcement at a White House ceremony with U.S. executives from Nucor Corp , United States Corp and TimkenSteel Corp alongside Commerce Secretary Wilbur Ross, a billionaire businessman who made part of his fortune investing in the business.

"is critical to both our economy and our military," said Trump, a Republican. "This is not an area where we can afford to become dependent on foreign countries."

won many votes in industrial states like Michigan and Pennsylvania with a pledge to boost manufacturing and crack down on Chinese trade practices.

is the largest national producer and makes far more than it consumes, selling the excess output overseas, often undercutting domestic producers.

The unusual step of launching an investigation comes as is pressuring to do more to rein in an increasingly belligerent North Korea. When Chinese President Xi Jinping visited in Florida earlier this month, raised the possibility of using trade as a lever to coax to do more.

"Everything they export is dumping," said Derek Scissors, Asia economist at the American Enterprise Institute, a think tank.

Ross cast the decision to initiate the probe as a response to Chinese exports of into the United States reaching the point where they now account for 26 percent of the U.S. market.

Chinese exports have risen "despite repeated Chinese claims that they were going to reduce their capacity," said Ross, whom The Economist, a business magazine that champions free trade, in 2004 labelled "Mr. Protectionism" for his history of owning businesses protected from foreign competition.

Ross said that if the Commerce inquiry finds the U.S. industry is suffering from too much imports, he will recommend retaliatory steps that could include tariffs.

Diverging from the Obama administration's approach to the issue, which relied largely on filing complaints to the World Trade Organization (WTO), ordered a probe under Section 232 of the Trade Expansion Act of 1962, which lets the president impose restrictions on imports for reasons of national security.

In October 2001, a Commerce Department investigation found "no probative evidence" that imports of iron ore and semi-finished threaten to impair U.S. national security.

had rallied after won the November election amid promises for increased infrastructure spending. On Thursday of Dynamics Inc , AK Holding Corp , Cliffs Natural Resources Inc , Allegheny Technologies Inc and other makers closed between 4 percent and 8.5 percent higher.

PROFITS CITED

The United States has nearly 100 plants that make millions of tons of annually. The U.S. government has attempted to shield them from cheap foreign chiefly through the WTO, but the administration said this has had little impact.

"The artificially low prices caused by excess capacity and unfairly traded imports suppress profits in the American industry," the administration said in a statement.

Nucor Chairman John Ferriola said in a statement that the steelmaker welcomed the president's move. "We look forward to continuing to work with the president and Secretary Ross to ensure our trade laws are enforced so that U.S. manufacturers can compete on a level-playing field," he said.

Experts were sceptical about the administration's argument that cheap Chinese threatened U.S. national security.

The Defense Department's annual requirements comprise less than 0.3 percent of the industry's output by weight.

"There is no doubt that plays a role in our national security and the manufacturing of U.S. weapons systems," said Jeff Bialos, a partner at law firm Eversheds Sutherland, who has worked on trade cases in the past.

"But the Department of Defense only consumes a small portion of domestic output, and this has decreased over the past decade as composites technology has advanced," Bialos said.

Some of the military's largest consumers of are U.S. Navy shipbuilders Huntington Ingalls Industries Inc and Lockheed Martin Corp .

Scissors said the United States has other ways to take on over trade issues, other than invoking national security.

"Talking about it as a national security issue - I don't think it's necessary and I don't think it's justified," he said.

(Additional reporting by Jeff Mason in Washington; and Luciana Lopez and Caroline Valetkevitch in New York; editing by Kevin Drawbaugh and Nick Zieminski)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22