AIIS tell Trump 232 probe will not fix overcapacity problem

The president’s Section 232 investigation—and any resulting actions on steel imports in the name of national security—will not fix the underlying problem of steel excess capacity but will invite retaliation that would hurt all sectors of the U.S. economy, the American Institute for International Steel (AIIS) has written in a letter to President Trump.

“We fully appreciate that a significant aspect of the policy rationale for this investigation is to address steel market distortions caused by large volumes of global excess capacity,” wrote the Alexandria, Va.-based AIIS, asking Trump to terminate the investigation. “We share your deep concern regarding this serious, long-standing problem, and have called for concerted, sustained, American-led diplomatic efforts to address it.

“However,” the institute continued, “imposing job-killing trade restrictions on steel imports will do nothing to counter and roll back the prolific use of state subsidies by some countries, most especially China, that are almost completely responsible for global excess steel capacity.”

AIIS, which says it represents 120 companies supporting 1.2 million jobs in the steel-using sector, said “it would be highly premature to consider imposing any such restrictions” before the Global Forum on Steel Excess Capacity has delivered its report—as it was tasked to do by the G20 leaders at this year’s summit—or held its first ministerial meeting. That report is due in November, when a ministerial also could be held.

Echoing sentiments made by associations representing other sectors, the group wrote that “any new trade restrictions on steel imports will result in global retaliation well outside the steel realm,” adding that “retaliation is always a ‘lose-lose’ proposition.”

“The United States steel industry is already the most protected industry sector in the country, and has been for some time,” AIIS wrote. “Let us not attempt to further protect the few at the expense of many.”