Trump administration lets steel tariff deadline pass without action

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FILE PHOTO - A labourer shovels iron ore into a steel ladle at Wuhan Iron and Steel Group in the capital of central China's Hubei province October 17, 2007. REUTERS/Stringer/File Photo (Copyright Reuters 2017)

While President Donald Trump and his administration have promised to crack down on steel imports, missed deadlines and unreleased impact analyses have left doubt over the completion of another area of the White House’s ambitious policy agenda.

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U.S. Commerce Secretary Wilbur Ross had initially intended to finish a report on foreign steel tariffs by the end of June, however, Ross is still awaiting a report from the Pentagon on what effect such taxes could have on national security.

White House officials have hinted that tariffs still are coming. Asked on "Fox News Sunday" over the weekend if the president planned to impose sanctions on foreign steel, White House chief of staff Reince Priebus responded: "My guess is that he will because he promised he would."

There are trade-offs from taxing foreign steel that include higher prices for consumers and manufacturers that rely on steel, as well as strained relationships with trade partners. Supporters of the tariffs say the move would help crack down on excess steelmaking by China. Opponents say it would raise prices for consumers and manufacturers that turn steel into cars, furniture and other products.

Scott Paul, president of the Alliance for American Manufacturing, supports higher steel tariffs but notes that the initial timeline set by the administration was "very ambitious." He says that tariffs could help domestic steel mills while encouraging other countries to take similar moves against China.

Paul said that some officials and advocacy groups have slowed the process to fine-tune the policy, while others are hoping that a slower pace of discussions will derail the debate. He said he trusts that "at the conclusion of the process, there will be a well thought-out rationale for whatever relief is provided."

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In April, Trump asked the Commerce Department to launch an investigation into whether foreign steel imports posed a threat to national security, on the grounds that the American military relies on steel for airplanes, ships and other equipment. Steel also goes into roads, bridges and other critical infrastructure.

The investigation reflects the administration's determination to use existing trade laws more aggressively to combat what it sees as unfair practices by U.S. trading partners. Restricting steel imports, it reasoned, would help restore U.S. manufacturing jobs and reduce an American trade deficit that came in at $502 billion last year.

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The administration's trade team is heavy with steel industry veterans: U.S. Trade Rep. Robert Lighthizer represented U.S. steelmakers as a Washington trade attorney. As a private investor, Ross, the commerce secretary, bought and turned around several bankrupt steel companies.

But the Pentagon is also providing its own input on the issue while the Commerce Department's report has yet to be finalized.

Many of the steel industry's troubles can be traced to low prices resulting from massive overproduction by China, which churns out nearly half the world's steel. In 2016, China produced more than 808 million metric tons of steel, nearly 50% of the world’s total output, according to the World Steel Association. By contrast, the United States produced less than 79 million metric tons, or 4.8% of global output.

But the United States has already put up big barriers to Chinese steel imports. So any restrictions or tariffs on steel would land elsewhere — on U.S. ally Canada (which supplies 17 percent of U.S. steel imports), Brazil (13 percent) and South Korea (12 percent).

In March, President Trump signed an executive order targeting countries that have unpaid anti-dumping duties and another ordering an investigation into how steel dumping impacts U.S. industries and the national deficit. The Trump administration hasn’t stopped at steel either. Aluminum and lumber have also been added to the administration’s watch-list.

The Associated Press contributed to this report.

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