These Charts Show U.S. Threat From Foreign Steel Is OverblownBy
Report on risks from imports is due as early as this week
Defense industry accounts for just 3% of domestic steel demand
President Donald Trump charged a couple months ago that a flood of cheap imported steel has not only cost American jobs, it also had national security implications. These charts show it’s not that clear cut for the latter.
The Commerce Department is expected to release as early as this week the results of its investigation into whether steel imports constitute such a threat. As the following charts show, however, only a smidgen of domestically produced steel is used by the military and to the defend the homeland. What’s more, much of what is shipped in across America’s borders and through its ports comes from U.S. allies.
In April, Commerce Secretary Wilbur Ross initiated a study, under the rarely used Section 232 of the Trade Expansion Act of 1962, into whether steel imports threaten U.S. security. While proponents of the investigation say that American-made steel is of critical importance for the nation’s defense and infrastructure, only 3 percent is used by the military and for homeland security.
What’s more, most steel imports come from American allies. Canada is the biggest foreign supplier of steel to the U.S. There’s also plenty of tonnage from South Korea, Brazil, Mexico and Japan. China, considered the source of many of the world’s steel woes because of its huge excess capacity, only supplies about 4 percent of imports of the metal.
While Commerce’s study could find that some imports represent a national security threat, there’s still scope for the administration to be selective with any tariffs or quotas they impose by excluding certain countries or products. Trump has broad powers under Section 232 to restrict imports found to threaten security.
The U.S. exports a lot of steel and inputs too. Given the inter-connected nature of the industry, much of the American-made material is shipped to some of the very same countries that export finished products back. Canada is not only the biggest foreign shipper into the U.S., it’s also the largest foreign consumer. Mexico is the second-biggest buyer.
While the Trump administration could be using the steel-import study as a bargaining tool for renewed trade negotiations, there may be some politics involved as well. Though the steel industry employs only a fraction of the 146 million people on payrolls, it has acquired considerable political influence and is at the center of the president’s promise to revive manufacturing. This chart of steel mills across the country shows that the majority are located in states that voted for Trump.
— With assistance by Kevin Varley, Mira Rojanasakul, and Catarina Saraiva