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09 Nov 2017 | 09:31 UTC — Insight Blog
Featuring Tom Balcerek
Football season is in full swing in America, and it looks like political football season is about to kick off for American steelmakers.
The football getting kicked around and passed back and forth, is President Donald Trump's virtual promise to protect domestic steelmakers by sacking unfairly traded imports.
So far that "promise" has caused some blindside hits on American steelmakers, as imports rallied after the Trump administration's April announcement that it would consider restricting imports on the basis of national defense via a Section 232 investigation. US buyers rushed their import purchases, executing an end-around play to beat any future unavailability and the likelihood of rising domestic prices.
Imports are up 20% so far this year. Meanwhile, Commerce has yet to break huddle on the investigation after six months.
Last week Senate Minority Leader Charles Schumer of New York vowed to delay Trump's nominees for key Commerce Department positions until Trump gained some significant yardage on the Section 232 case.
That cross-body block wasn't exactly cheered by domestic steelmakers. Philip Bell, chairman of the Steel Manufacturers Association, said Schumer's move was not a great idea, as a fully stacked Commerce Department is needed to properly tackle the 232. He said, "Swift confirmation of key Commerce Department nominees, who are highly qualified, have broad steel industry support and can prudently advise the administration should help expedite the 232 process."
It's hard to tell which would be the better play, but one thing seems clear: protection from unfair imports -- supported by Democrats and Republicans alike -- has entered the gaming arena.
That shouldn't be surprising as Trump's unusual focus on steel became part of his blitzing campaign for president. He vowed to "bring back" domestic steel if he was elected, along the same lines of his promise to make America great again. Ironically, America was still pretty great at the time, and so was its steel industry, the fourth-largest in the world.
His opponent, Hillary Clinton, intercepted Trump's commitment to helping US mills, flagging his penchant for using foreign steel to build his hotels and casinos.
US steelmakers are in triple overtime since the Trump administration's self-imposed but un-met June 30 deadline for the completion of the 232 investigation, and getting a little nervous that the president might be preparing to punt.
"While I am pleased with the attention being placed on unfair trade by the current administration, quite candidly, I am disappointed with the slow progress in addressing the import situation, which continues to worsen," AK Steel CEO Roger Newport said last week.
The longer the quarterback scrambles the more likely he is to be forced out of the pocket by opponents of steel import restrictions.
Furthermore, with Commerce Secretary Wilbur Ross now being caught up in the administration's Russia-connections narrative, what steelmakers may really need is a Hail Mary pass.
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