US President Donald Trump is close to deciding to manually regulate steel supplies to the US, which is reminiscent of the protectionist measures of the last Republican President George W. Bush to restrict metal imports.
But any feelings of déjà vu will be misleading. as Trump's strategy to protect domestic steelmakers will be very different from what Bush did in 2002.
Then the President of the United States imposed duties on steel, taking advantage of the opportunities provided by section 201 of the 1974 Trade Act, then how Trump will use another instrument, namely Section 232 of the Trade Expansion Act of 1962.
Both laws undoubtedly sound the same, and they have a lot in common. The laws allow the president to impose tariffs without congressional approval if a government investigation believes that imports harm or threaten the United States.
But the big parallels differ greatly in the way they achieve the goal, as the two instruments are implemented differently and “Stop” various types of threats. These contrasts, outlined in the table below, illustrate why Trump's policies are viewed as a potentially dangerous move and are receiving criticism from opponents.
The administration's claim that steel imports could threaten national security , is puzzling to many, since Canada is the largest foreign steel supplier in America. But trade lawyers largely agree that the White House is likely to impose restrictions using section 232 rather than 201.
First, Trump can count on a trusted cabinet member if he is uses section 232, rather than an independent panel on the US International Trade Commission, to decide if tariffs are needed. Commerce Secretary Wilbur Ross, known for his bellicose statements about steel dumping, last week handed the results of the steel import investigation as a national security threat and Trump now has 90 days to decide on his recommendations, which may include tariffs and /or quotas. The Ross agency is conducting a similar study on aluminum, due to be completed later this month.
Second, to prove section 201 damages, according to Simon Lester, a lawyer and trade policy analyst at the Cato Institute in Washington, is much harder than declaring a threat to national security and keeping everything classified.
“In section 201, you must show that imports are causing a serious problem for the industry. If your domestic industry is making a profit, it is difficult to prove it, and now the US economy is doing very well. You don't have to think about it using section 232, ”said
