Aurhor: China National News
Posted: Friday 21st April, 2017
U.S. President Donald Trump has launched an investigation into countries that export steel to the U.S.
The probe has been launched in a bid to crackdown on countries that flood the U.S. with artificially cheap steel and undercut local suppliers.
Trump has said that the move had “nothing to do” with China, which has been often associated with the practice.
China is the largest national producer and makes far more steel than it consumes. The country sells the excess output overseas at subsidized prices.
Previously, Japan and South Korea have also been accused of dumping.
Trump has said that the move is aimed at protecting U.S. security and the launch of the probe led to shares of U.S. steelmakers rising sharply.
Further, Asian steelmakers also climbed.
The U.S. government has previously attempted to protect national steelmakers from cheap foreign steel through the World Trade Organisation.
The Trump administration has however, indicated that these actions have had little impact so far.
The investigation will fall under the U.S. Trade Expansion Act of 1962.
The act allows the president to impose restrictions on imports for reasons of national security.
Trump said in a statement, “Steel is critical to both our economy and our military. This is not an area where we can afford to become dependent on foreign countries.»
Further, commenting on the probe the U.S. Commerce Secretary, Wilbur Ross said Chinese exports now accounted for 26 percent of the U.S. steel market.
Ross noted that exports had risen «despite repeated Chinese claims that they were going to reduce their steel capacity.”
Ross has indicated that if the investigation found the U.S. steel industry was suffering from excess steel imports, he would recommend retaliatory steps.
These, he said, could include tariffs.
The Trump administration statement said, “The artificially low prices caused by excess capacity and unfairly-traded imports suppress profits in the American steel industry.”
On Thursday, U.S. steel stocks rallied with the Dow Jones U.S. Iron and Steel Index closing 5 percent higher.
Meanwhile, Asian steel stocks also rose with Japan’s Nippon Steel up 1.3 percent on Friday and South Korea’s Posco gained 2.5 percent.