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Editorial: Restrict steel imports citing threat to national security a risky move

The Trump administration is planning to restrict steel imports citing threats to U.S. national security.

 

Should safeguard actions be taken based on a flimsy justification, it would have severe repercussions on the global free trade regime based on common rules. It is necessary to apply pressure from within the U.S. and from abroad so the administration will not make a risk-fraught move for the wrong reasons.

 

Since his inauguration, President Trump has repeatedly pledged to reduce the U.S. trade deficit and has been considering various measures to restrict imports, including steel.

 

As such, it has set its eyes on Article 232 of the Trade Expansion Act, which was created more than 50 years ago. This trade act grants presidents the authority to restrict imports if the U.S. Department of Commerce (DOC) deems these to have a negative effect on  national security. Based on this regulation, President Trump in April ordered the DOC to investigate whether steel imports pose a threat to U.S. national security.

 

DOC concluded that steel imports have a negative impact on national security and the department is believed to have proposed concrete safeguards to the president.

 

However, not everyone is convinced that steel imports could pose a threat to American national security; there are even doubters in the U.S. America relies on imports of steel for only about 30% of its consumption, and its major suppliers are close allies such as Canada, South Korea, and Mexico. It is virtually impossible to imagine a situation in which the U.S. cannot secure enough steel to satisfy the needs of its national security.

 

In addition, the U.S. has a history of frequently imposing antidumping tariffs on imported steel, claiming that the domestic industry is falling victim to cheap exports to the U.S. Some point out the fact that American steel prices are higher than they would have been if steel hadn’t been repeatedly protected by the government.

 

If steel imports are to be restricted in addition to the antidumping tariffs, it will negatively affect not only overseas export manufacturers but also American companies who use steel to develop products and American consumers.

 

If imports are restricted unilaterally for no legitimate reason, this can only be regarded as a protectionist action that could invite retaliatory measures and trigger a trade war.

 

While it is true that steel imports need to be addressed alongside the issue of China’s excessive production capacity, this is a matter that needs to be resolved through multilateral talks. It is wrong to try to achieve results through the threat of high tariffs and unilateral safeguards.

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