Comments from Donald Trump about the potential results of the ongoing Section 232 investigation and other trade policies sent US steel mill stocks soaring late Thursday.
“Steel is a big problem,” Trump said to journalists during his flight to France. “They’re dumping steel. Not only China, but others. We're like a dumping ground, okay? They're dumping steel and destroying our steel industry. They've been doing it for decades, and I'm stopping it. It'll stop.”
Shares of Nucor, US Steel, and AK Steel saw significant increases (2.6 percent, 4.0 percent, and 7.9 percent, respectively) after the remarks were made public. The results of the Section 232 investigation are expected to be released any day, and the president will then decide whether to raise wide-ranging tariffs on steel products, impose quotas on steel imports, or both.
While China is often cited as a primary source of dumped steel in the US, there are currently about 200 trade restrictions in place on various Chinese steel products. According to May final import census data, China was only the 10th largest source of US steel imports—for the full year 2016, China ranked 11th.
Downstream sectors within the US steel industry expect a rise in steel prices following the implementation of significant steel tariffs, which could in turn harm manufacturing, construction, and other end-use sectors. Additionally, many unrelated US industries are warning the administration about possible retaliatory trade policies from affected countries—US agriculture is especially vulnerable to a trade war.
Trade experts who say steel imports are not a risk to US national security—the basis of the Section 232 investigation—warn that trade restrictions would be a “net damage” to the US economy, citing the negative outcome of President George W. Bush’s Section 201 tariffs on steel imports implemented in 2002.