21 Apr 2017

Trump orders China steel investigation

1:24 pm on 21 April 2017

US President Donald Trump has launched an investigation into whether Chinese and other foreign steel threatens US national security.

US President Donald Trump gives one of his habitual fist-pumping gestures to a gathered crowd as he exits Air Force One.

US President Donald Trump gives one of his habitual fist-pumping gestures to a gathered crowd as he exits Air Force One. Photo: AFP

Mr Trump signed a memorandum, ordering the Commerce Department to quickly conduct the investigation, while surrounded by steel executives at an Oval Office ceremony on Thursday.

The investigation would explore the impact of steel imports on the US defense industrial base, while new ship, plane and tank building orders are being made.

Section 232 of the Trade Expansion Act of 1962 allows the president to impose restrictions on imports for reasons of national security.

"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," Mr Trump said.

US Commerce Secretary Wilbur Ross said Chinese steel exports had continued to rise "despite repeated Chinese claims that they were going to reduce their steel capacity when in fact they have been increasing it consistently".

"It's a very serious impact on the domestic industry," Mr Ross said at a White House briefing with reporters.

Chinese steel imports had increased nearly 20 percent in the early months of this year alone, he said.

If the US steel industry was deemed to be suffering from the steel imports, Mr Ross said he would recommend retaliatory steps that could include tarriffs.

The New Zealand government recently launched an investigation into Chinese steel after evidence from industry sources suggested China was subsidising galvanised steel coil.

Local companies have claimed steel dumping was occurring in New Zealand, but a Chinese submission to the investigation said it was a "wild guess" based on comment from media and law firms.

On a recent visit to New Zealand, Chinese Premier Li Keqiang said the country would not allow Chinese companies to dump steel in other countries, and those found to be illegally dumping steel would be punished.

Mr Trump's investigation is a part of his "America First" policies, which aim to boost US manufacturing and preserve US jobs. Mr Trump won many votes in industrial Midwestern states like Michigan and Pennsylvania with a pledge to boost manufacturing and crack down on Chinese trade practices.

The American Iron and Steel Institute, which lobbies on behalf of the industry, said it supports the White House move.

Institute president Thomas Gibson said there was massive global steel overcapacity which "has resulted in record levels of dumped and subsidised foreign steel coming into the US and the loss of nearly 14,000 steel jobs".

- Reuters / RNZ

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