U.S. Senators Want Section 232 Exemption For Iowa Storm
PLEASE NOTE: Connecting the Dots is reporting the following information for members’ information only. The Metals Service Center Institute (MSCI) has not taken a position on the matter discussed below.
As a reminder, MSCI has consistently argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, in testimony to the Trump administration given in 2017, MSCI advised federal officials to provide relief for producers up and down the supply chain and to consider consequences of any new trade policy and to exclude North American trade partners from Section 232 penalties. A
s FastmarketsAMM (subscription required) reported last week, the two U.S. senators from Iowa, Senate Finance Chair Charles Grassley (R-Iowa) and Sen. Joni Ernst (R-Iowa), wrote to U.S. Secretary of Commerce Wilbur Ross asking that the department lift tariffs on steel products used to help Iowa rebuild after a recent severe storm.
According to S&P Global, Iowa’s Department of Agriculture and Land Stewardship estimates 57 counties containing about 14 million acres of insured crops were in the path of a derecho that wound through the state on August 10, producing high, hurricane-like winds. In northern Illinois, meanwhile, there were 6.95 million acres of corn and 5.82 million acres of soybeans – along with storage facilities and machinery – in the storm’s track.
The two senators wrote, “In the wake of this catastrophe, opportunists are offering extremely high estimates to Iowans for the steel they need to rebuild their homes, farms, businesses and communities. A number of farmers have told us that the increased prices for steel would collectively add hundreds of millions of dollars in costs for them.” (The Iowa attorney general is investigating reports of price gouging as a result of the storm. Steel or other metals products are not mentioned in this news story.)
Specifically, the lawmakers want tariffs to be lifted for steel used in construction projects, grain bins, machine sheds, and agricultural machinery.
Sens. Grassley and Ernst tried to assure the secretary that domestic producers would not be negatively impacted by such a policy. They argued, “The very fact that high prices exist is evidence that they are not losing legitimate sales, but rather that certain actors are engaging what you referred to as ‘speculative activity.’ These actors can do so precisely because the option of importing foreign steel is cost prohibitive. Simply restoring that option will undermine the position of these unscrupulous actors.”
The senators’ full letter is available here.
Connecting the Dots will continue to monitor this request, and the Department of Commerce’s response to it.