Trump orders investigation into steel imports: On April 20, 2017, President Trump announced that the Commerce Department, initiated an investigation under Section 232 of the Trade Expansion Act of 1962, to determine “the effects of steel imports on national security”.  Under Section 232, and other related statutes, the President has broad powers to impose trade remedies through the use of tariffs, quotas, or “adjust(ing) the imports of an article and its derivatives”.   The Section 232 investigation will analyze whether imports have detrimentally harmed the U.S. ability to produce steel for its defense industry, and/or whether global steel overcapacity impacted the domestic economy and national security.

Under Section 232, the Secretary of Commerce must conclude the investigation and deliver findings within 270 days of the investigation’s commencement.  This move may provide relief for domestic steel producers, but could also raise steel costs at every step of the supply chain — increasing expenses on consumers and on many of the manufacturing industries.

Although the Trump Administration investigation could result in a substantial increase in tariffs on various steel products, it is difficult to speculate what steps the Administration will likely take pursuant to the findings of the Section 232 investigation.  President Trump stated that he is looking forward to the results of investigations into whether aluminum and steel imports are jeopardizing national security and promised to “take major action” if necessary.  Regardless of the outcome however, the Administration’s use of this scarcely used trade feature suggests a manifestation the Administration’s rhetoric and interest in “Buy America” policies.