Could Have Implications on Construction Steel Prices
On Jan. 11, Commerce Secretary Wilbur Ross delivered his “Section 232” report on the national security threat posed by foreign steel mill product imports to the president. Section 232 of the Trade Expansion Act of 1962 allows the president to utilize his “statutory authority to adjust imports” without Congress’ approval if a government-led inquiry yields sufficient evidence of a threat. President Trump now has 90 days to review the Commerce Department’s findings and recommend remedies, likely in the form of tariffs, quotas, or some sort of hybrid package. Should the administration act on the report, the construction industry may see an increase in steel prices.
Section 232 is unique in that damage is not calculated based upon import volume. This is particularly important because China is the ostensible target of this investigation, despite a dramatic decrease in Chinese steel imports. And, while China is the biggest net exporter of steel – and has contributed mightily to the global glut – Canada and other European allies are, in fact, the United States’ largest sources of foreign steel.
President Trump is keen on shielding domestic steelmakers from unfair imports and few doubt that the report will fail to reinforce the administration’s view that national security is currently being compromised. In determining a response, President Trump will have to weigh the timing of any announcement, as well as the scope of a response—sweeping trade restrictions on foreign steel imports or more precisely targeted remedies.
AGC will continue to monitor the situation and update its members as more information becomes available.
For more information, contact Collin Janich at [email protected].