As the White House seeks to turn steel overcapacity into a national security matter, the issue is alienating not only China but America’s NATO allies.

‘They’re dumping steel and destroying our steel industry, they’ve been doing it for decades, and I’m stopping it. It’ll stop,’ US President Donald Trump declared during a recent flight from the US to France. “There are two ways: quotas and tariffs. Maybe I’ll do both,” he added at the eve of his administration’s first Sino-US Comprehensive Economic Dialogue (CED), also known as Diplomatic and Security Dialogue (D&SD).

Only days after China’s US Ambassador Cui Tiankai warned the US on “troubling developments” that could derail the bilateral relationship, US Commerce Secretary Wilbur Ross said he would present Trump a range of options to restrict steel imports on national security grounds – even as Europe’s NATO leaders were already lobbying against the White House’s steel efforts.

Steel overcapacity as a national security threat

After the Trump-Xi Summit in early April, the US and China announced a 100-Day Action Plan to improve strained trade ties and boost cooperation between two nations. “This may be ambitious, but it’s a big sea change in the pace of discussions,” Wilbur Ross said at the time.

Yet, barely two weeks later, President Trump issued a Presidential Memorandum, which directed Ross to investigate the effects of steel imports on national security on the basis of the Trade Expansion Act of 1962. If Ross determines steel “is being imported into the US in such quantities or under such circumstances as to threaten to impair the national security,” Trump is authorized to take actions “to adjust the imports of the article and its derivatives so that such imports will not threaten to impair the national security.”

It was those actions that Trump alluded to in his recent statement, including imposing import quotas, license fees on imported goods, or negotiating more restrictive trade agreements.

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