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Section 232 decision seen likely early in week

Jun 09, 2017 | 05:24 PM | Michael Cowden

Tags  Section 232, Commerce Department, Wilbur Ross, Donald Trump, steel imports, semifinished steel, steel slabs, West Coast steel Nafta

CHICAGO — The Commerce Department is likely to issue a key report in its Section 232 investigation into steel imports early in the week of June 12, according to sources familiar with the matter.

The report could come as soon as Monday morning or as late as Wednesday. It is likely to conclude that imports do pose a threat to national security.

But Commerce might not provide much detail as to the scope of products that could be penalized or what those penalties might be, they said.

It’s not year clear, for example, whether semifinished products such as steel slabs will face tariffs or other quotas as a result of the petition.

If imported slabs aren't penalized, it would anger mills that have pushed hard for President Donald Trump's administration to strictly enforce “Buy America” provisions that require steel for federal projects to be melted and poured in the United States.

But if imported slabs are walloped, it could hurt rerollers, especially on the West Coast, that would be forced to bring slabs in from mills east of the Rocky Mountains instead of from mills abroad, one source said.

One solution might be for West Coast mills to source slabs from other mills in the North American Free Trade Agreement (Nafta) region, he said. Freight from Mexico, for example, might be less onerous to West Coast rerollers than that from the Midwest.

The 232 is also unlikely to target products from Canada and Mexico, assuming this country's Nafta partners agree to work more closely with their U.S. counterparts to counter duty-evasion practices such as transshipment, the source said.

U.S. Commerce Secretary Wilbur Ross recently said that the Section 232 inquiry will end “very, very shortly” and could result in recommendations for new tariffs, quotas or a combination of both.

Ross last month said that his department would complete its Section 232 report on steel imports by the end of June, far ahead of the 270 days mandated by statute. The president then has another 90 days to decide whether he agrees with the Commerce secretary’s decision, and then another 15 days to decide what course of action might be necessary.

It’s possible that Commerce might be quick to announce that imports are a national security concern but the administration take closer to its statutory limit to hone the scope of the case and decide on penalties, the source said.

Section 232 is part of the Trade Expansion Act of 1962. It allows the president to penalize imports if he decides they pose a threat to national security.

The Trump administration has warned it might take "major action" once it received Commerce's report on the Section 232 investigations initiated against both foreign steel and aluminum.

A Commerce spokesman said via email on June 9 that he didn't have a time line for the release of the report.

A hearing on the 232 investigation into aluminum imports is slated for June 22.

Michael Cowden

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