US Commerce Department will launch investigation into unfair profiteering from steel and aluminum tariffs
The department today also will also announce its first round of product-based tariff exclusions.
Commerce secretary Wilbur Ross suggested in testimony before the senate finance committee today that steel and aluminum prices have gone up "far more than warranted by the tariffs" as a result of speculative activity by "various intermediary parties" who are hoarding material. Ross did not elaborate on who the department will target in its investigation.
Steel and aluminum prices in the US have posted broad increases in 2018 amid strong end-user demand and disruptions in import supply. Offers for hot-rolled coil (HRC), a steel sheet product used in cars and appliances, have risen by more than 50pc through June from a year earlier to more than $900/st, near a 10-year high. Foreign rebar suppliers are increasingly booking sales to the US as rising domestic prices boost the competitiveness of tariff-inclusive import offers.
Ross said that it "should be fairly quick" for steel prices to decline as more US supply comes online, citing 2.5mn short tons of additional domestic flat-rolled steel production capacity resulting from the restart of two blast furnaces at US Steel's plant in Granite City, Illinois.
But senators of both parties pressed Ross on the impact of rising prices on US manufacturers who consume steel and aluminum.
Small businesses are "paying the price of the president's negotiating strategy," senator Pat Roberts (R-Kansas) said.
Senators also expressed frustration with the department's delay in acting on product-based tariff exclusion requests.
Commerce today plans to announce its first 42 steel and aluminum product-based tariff exclusions, Ross said, a small fraction of the total 22,506 exclusion requests received by the department since the process was opened in late-March.
Commerce received 20,003 exclusion requests for steel products from US companies, with 2,513 rejected and the remainder still outstanding. More than 3,700 objections to these exclusion requests have been filed by US producers.