Steel – the United States initiated investigation to determine the effects on the national security of imports of steel
On April 19, 2017, the Department of Commerce (DOC) initiated investigation under Section 232 of the Trade Expansion Act of 1962 to determine if steel is imported into the U.S in such quantities or under such circumstances to impair the national security. If DOC finds that imports of steel impair the national security, the President could adjust the imports of steel, including increasing the import tariff or applying quantity restrictions. These measures are similar to trade remedy measures. However, to note that Section 232 provides U.S government a broad authority to make decision because there is no clear provisions on national security and there is no limit to nature and duration of imposition of restrictive measure.
The subject merchandise includes: flat rolled steel, long steel, steel pipe, semi-finished products, stainless products, and special alloy steels that require high production skill and are used for production of armor, engines, boats, aircrafts and infrastructure. The notification of the investigation does not precisely define the subject merchandise and thus, the scope of the investigation may be adjusted by DOC. This does not exclude the possibility that DOC could apply a broad scope of the investigation after receiving comments of domestic producers.
According to regulations, DOC shall make determination on the investigation within 270 days (i.e. January 1st, 2018) to submit to the President. The President therefrom shall have 90 days to decline or accept DOC’s determination.
Next steps, DOC will hold a public hearing on May 24, 2017 and interested parties shall submit oral statements before May 17, 2017. The public hearing may limit participation, therefore it is possible that some registered parties are not allowed to participate.Regarding investigations under Section 232, in history, the United States rarely used such legal tool and the latest investigation was in 70s. However, it appears that the U.S government has become more aggressive in terms of its policy towards imports. After the notice of initiation, the President Donald Trump notified to reboot the investigations under Section 232, not only to steel but also aluminum.