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232 likely to remain for years: panelists

Mar 20, 2019 | 03:40 PM | New York | Dom Yanchunas

The Section 232 trade measures in the United States probably will stay in place at least for the remainder of President Donald Trump's tenure, unless a court order disallows them, according to panelists at Fastmarkets' 12th Steel Tube & Pipe Conference.

So far, the year-old regime of tariffs and quotas on steel and aluminium imports have achieved Trump's objectives of boosting domestic production and employment and tormenting overseas trade rivals, lobbyist Samir Kapadia, principal and chief operating officer of Vogel Group, claimed during a trade panel on Wednesday March 20.

Even if Congress approves measures to eliminate the Section 232 orders, there would not be enough votes to overturn a presidential veto, Kapadia said.

"The 232's not going away," he argued. 

Christopher Cloutier of Schagrin Associates, a trade lawyer who represents domestic producers, said Section 232 was a good decision. The tariffs and quotas challenged unfairly traded imports more aggressively and less expensively than a Section 201 or the legacy anti-dumping and countervailing system would have over the same year-long time horizon, he said. 

"It has achieved its goal of increasing throughput at US facilities, so by that standard it's working," Cloutier told the crowd of 200-plus conference attendees in Houston.

After the Section 232 duties were first announced in March 2018, Fastmarkets AMM's hot-rolled coil index jumped, reaching a nearly 10-year high of $45.84 per hundredweight ($916.80 per short ton) last July. The daily index was calculated at $34.63 per cwt on March 19, 2019.

Still, given that some foreign suppliers have stated a continued willingness to sell material into the US below cost, Cloutier suggested that "maybe we haven't done enough."

And the Section 232 orders have exerted little to no influence on a separate but related objective: reducing overcapacity in steelmaking around the world, according to Donald Cameron, a trade attorney with Morris Manning & Martin who represents import interests. 

"It has nothing to do with addressing global overcapacity, except as a pretext," Cameron said. He described Section 232 as a "sham" that has been a drag on the US economy - on the metals industries and on farmers in particular - for the benefit of a few politically connected US steel producers. 

Cameron did agree with Kapadia's view that Section 232 may remain in place for a while.  

"There are court challenges, but that's going to take a long time," he said.

If Trump follows through on potential Section 232 action against automobile imports, however, Cameron predicted a national backlash - and possible veto-proof majority in Congress - to challenge those duties.