(Adds details on firms granted steel tariff product exemptions)
By David Lawder
WASHINGTON, June 20 (Reuters) – The U.S. Commerce Department
is investigating recent steel price hikes to determine whether
some market participants are “illegitimately profiteering” from
new tariffs, Commerce Secretary Wilbur Ross said on Wednesday.
Ross told a Senate Finance Committee hearing that the price
of steel in the U.S. market has risen far more than justified by
the 25 percent tariff imposed by the Trump administration,
possibly because of “speculative activity,” with some market
intermediaries holding back inventories.
U.S. benchmark hot-rolled steel coil June futures prices
were quoted at $902 per ton on the New York Mercantile
Exchange on Wednesday, up 53 percent from $589 a year ago.
“There’s no reason for tariffs to increase the price of
steel by far more than the percentage of the tariff, and yet
that’s what has been happening,” Ross said. “That clearly is not
a result of the tariff, that’s clearly a result of antisocial
behavior by participants in the industry.”
Ross did not name any parties responsible for the price
hikes. But he said the restart of some idled domestic mills
would help alleviate any supply constraints by late this year,
citing U.S. Steel Corp’s restart of its Granite City,
Illinois, blast furnace operations, which should add 2.5 million
tons of raw steel output annually.
Ross also said that Commerce had made decisions in the first
98 requests for steel product exclusions by companies, approving
41 and rejecting 56.
The Commerce Department has received more than 20,000
individual steel product exclusion requests, with nearly 4,000
objections filed. For aluminum, Commerce has received 2,503
product exclusion requests, with 98 objections.
In addition to the 25 percent tariff on steel, the Trump
administration imposed a 10 percent tariff on steel imports from
Ross said relatively few of those requests will be granted
because “many of them have no substance but have objections that
were well grounded.”
In cases where product exclusions are granted, companies
will be refunded the tariffs they paid on steel and aluminum
imports, Ross said.
The Commerce Department later said the steel exclusion
requests issued on Wednesday cover seven different companies
importing steel products from Japan, Sweden, Belgium, Germany
The companies include razor maker Schick Manufacturing Inc,
cutting tool maker Nachi America, specialty steel supplier
Hankev International, wire fabricator Zapp Precision Wire and
steel mill equipment maker Woodings Industrial Corp.
Ross also said the Commerce Department was in the early
stages of its Section 232 national security investigation into
motor vehicle and auto parts imports, and no decisions made
regarding whether tariffs are warranted.
Commerce was trying to conduct the investigation in a “very
judicious very open and transparent manner,” Ross said. “We will
try very hard to avoid there being any unintended consequences.”
(Reporting by David Lawder; editing by Tom Brown and Leslie