Are Commerce actions showing Trump's hand on trade deals?

Recent trade case announcements by the US Department of Commerce may offer clues as to how the Trump administration will handle the Section 232 investigation, which is looking into steel imports' impact on national security.

Take the ongoing antidumping and countervailing duty investigation into Canadian softwood lumber launched by Commerce on December 16, 2016. At the time of the announcement, the petitioners alleged dumping margins of roughly 20%-53% on Canadian lumber imports.

Imports from Canada spiked last year. The US imported $5.7 billion of Canadian softwood lumber in 2016, up from $4.5 billion in 2015.

Then, on June 26, less than two hours before Commerce announced preliminary antidumping margins on Canadian lumber, Secretary of Commerce Wilbur Ross said softwood lumber imported from the Atlantic provinces — Newfoundland and Labrador, Nova Scotia, and Prince Edward Island — would be excluded from the investigations.

"The US petitioners and other parties support this determination; it, of course, will be subject to further comment on the record," Ross said in a statement. "I remain hopeful that a negotiated settlement is both possible and in the best interests of both countries, our forestry workers, producers, and affected communities."

The preliminary margins on softwood lumber were in the 4.59%-7.72% range. So far, it is not a bad deal for the Canadian lumber industry. It's like getting threatened with a $300 speeding ticket, showing up for a hearing and talking it down to $100. You still have to pay a fine, but it sort of feels like a victory, right? You can keep driving, or in this case, trading lumber.

The US also recently secured minimum pricing for imports of Mexican sugar that "ensure that Mexican sugar imports do not suppress or undercut domestic price levels" in lieu of antidumping duties.

Ahead of the July 7-8 G20 Summit in Hamburg, Germany, steel industry stakeholders worldwide were buzzing about whether the US would impose a broad tariff that would support US steel mills, but possibly cripple supply chains for many downstream manufacturers. Since then, the tone has changed to favor a more diplomatic approach to address global steel overcapacity. The G20 Leaders’ Declaration released on July 8 charged the Global Forum on Steel Excess Capacity — facilitated by the Organisation for Economic Co-operation and Development and representing about 90% of global steel production — “to rapidly develop concrete policy solutions that reduce steel excess capacity.” A report with “concrete policy solutions” is due by November 2017, and there will be progress reporting in 2018, the declaration said.

It is unclear now whether Commerce will still recommend trade restrictions on steel imports under Section 232 of the Trade Expansion Act of 1962. When Commerce issues its report, Trump will have 90 days to respond.

While the US steel industry has been consumed by speculation about Section 232, other trade cases for steel-intensive products have gone under the radar, including the AD/CVD investigation of 100- to 150-seat large civil aircraft from Canada launched in April by Boeing, and the safeguard investigation of large residential washing machines and certain parts filed in June by Whirlpool.

There are plenty of opportunities for Trump to play the traffic court judge to help US steel mills and manufacturers — but maybe not as much initially threatened.