Steel Prices: U.S. Steelmakers Turn Up the Pressure on Trump

The Section 232 investigation into whether or not steel imports are a matter of U.S. national security has been delayed, and now America’s leading steel companies are increasing the pressure on U.S. President Donald Trump to take action to protect the domestic steel industry.

According to CNBC, executives from 25 of America’s leading steel companies wrote a letter encouraging the president to “take broad and decisive action to ensure the ability of the domestic steel industry to supply our nation’s defense and critical infrastructure needs.”

“We encourage your administration to take immediate action under Section 232 of the Trade Expansion Act of 1962 to prevent excess steel capacity and surging steel imports from undermining the viability of the U.S. steel industry,” the steel executives wrote. “As you know, excess capacity in many foreign countries is the main cause of the sustained surge in imports. The U.S. government has been trying to address overcapacity through multilateral organizations like the G-20 and the Organization for Economic Cooperation and Development. So far, those efforts have failed to produce an effective solution, and the U.S. industry continues to suffer the consequences of foreign government inaction.”

The CEO’s of the largest American steel companies added that the need for action is “urgent” citing the fact that steel imports into the U.S. have been surging while the Section 232 investigation is underway.

At the same time that U.S. steelmakers are pushing Trump to act, according to the Financial Times, last month U.S. President Donald Trump last month rejected a Chinese proposal to cut steel overcapacity, despite the endorsement of some of his top advisers.

The rejection may seem puzzling, but it could actually be a positive when it comes to the fate of future steel reforms. Apparently, Trump wants to find ways to impose tariffs on imports from China, rather than agree that their steel overcapacity cuts are enough to protect U.S. steelmakers from cheap imports.

Leia Toovey has a B.Sc. in geology from Simon Fraser University, and her degree had a focus on resource economics. Out of school, she started working in the booming mining industry of Vancouver, Canada, covering junior mining stocks and commodities including potash, copper, nickel, oil and gold. Then she moved to New York and worked as a commodities analyst covering a breadth of commodities, from the Baltic Dry Index through the softs. As a geologist she has a greater understanding of the exploration and extraction side of commodities, and how changes in technology and the depletion of resources impact pricing. At Economic Calendar she covers a variety of commodities, providing daily technical and fundamental analysis and assessing major market developments.