Accusations Fly as US Firms Seek to Avoid Trump’s Steel Tariff

U.S. companies seeking to be exempted from President Donald Trump’s tariff on imported steel are accusing American steel manufacturers of spreading inaccurate and misleading information, and they fear it may torpedo their requests.

Robert Miller, president and CEO of NLMK USA, said objections raised by U.S. Steel and Nucor to his bid for a waiver are “literal untruths.” He said his company, which imports huge slabs of steel from Russia, has already paid $80 million in duties and will be forced out of business if it isn’t excused from the 25 percent tariff. U.S. Steel and Nucor are two of the country’s largest steel producers.

“They ought to be ashamed of themselves,” said Miller, who employs more than 1,100 people at mills in Pennsylvania and Indiana.

Miller’s resentment, echoed by several other executives, is evidence of the backlash over how the Commerce Department is evaluating their requests to avoid the duty on steel imports. They fear the agency will be swayed by opposition from U.S. Steel, Nucor and other domestic steel suppliers that say they’ve been unfairly hurt by a glut of imports and back Trump’s tariff.

U.S. Steel said its objections are based on detailed information about the dimensions and chemistry of the steel included in the requests. “We read what is publicly posted and respond,” said spokeswoman Meghan Cox. Nucor did not reply to requests for comment.

The 20,000-plus waiver applications that the Commerce Department has received illustrate the chaos and uncertainty ignited by Trump’s trade war against America’s allies and adversaries. It’s a battle that critics of his trade policy, including a number of Republican lawmakers, have warned is misguided and will end up harming U.S. businesses.

Trump and European leaders agreed this past Wednesday not to escalate their dispute over trade, but the tariff on steel and a separate duty on aluminum imports remains in place as the U.S. and Europe aim for a broader trade agreement. The metal taxes would continue to hit U.S. trading partners such as Canada, Mexico and Japan even if the U.S. and the EU forge a deal.

Miller bristled over insistence by Nucor and U.S. Steel that steel slab is readily available in the United States. “That’s just not true,” he said.

His company isn’t the only one looking overseas for a product described as being consistently in short supply. California Steel Industries, a mill east of Los Angeles in Fontana, described the slab shortage as “acute” on the West Coast and declared that its waiver request is critical to its survival.

Aiming to rebuild the U.S. steel industry, Trump relied on a rarely used 1962 law that empowers him to impose tariffs on particular imports if the Commerce Department determines those goods threaten national security. He added a twist: Companies could be excused from the tariff if they could show, for example, that U.S. manufacturers don’t make the metal they need in sufficient quantities.

But there are hurdles to clear on the path to securing an exemption. A single company may have to file dozens of separate requests to account for even slight variations in the metal it’s buying. That means a mountain of paperwork to be filled out precisely. If not, the request is at risk of being rejected as incomplete. All this can be time-consuming and expensive, especially for smaller businesses.

The requests are open to objections. The Commerce Department posts the exemption requests online to allow third parties to offer comments — even from competitors who have an interest in seeing a rival’s request denied. But objections are frequently being submitted just as the comment period closes, undercutting the requester’s ability to fire back.

Willie Chiang, executive vice president of Plains All American Pipeline, told the House Ways and Means subcommittee on trade last week that his company had no opportunity to respond to objections that contained “incorrect information” before the Commerce Department denied its exclusion request. Chiang didn’t say who submitted the inaccurate information.

“The intent here is to restrict imports on a broad scale,” said Richard Chriss, executive director of the American Institute for International Steel, a free trade group opposed to tariffs. “It wouldn’t make sense from the administration’s perspective to design a process that readily granted exclusions.”

The Commerce Department declined to comment for this story.

Department officials have so far made public only a small number of their rulings.

An analysis of the numbers by the office of Rep. Jackie Walorski, an Indiana Republican and one of the most vocal opponents of the steel tariff on Capitol Hill, shows that 760 requests have been approved while 552 have been denied. The department hasn’t yet approved a waiver request that triggered objections, according to Walorski’s review.

The congresswoman’s office also examined the more than 5,600 publicly available comments and found they were submitted on average about four days before the end of the 30-day comment period. More than 50 percent of the comments weren’t delivered until 48 hours or less before the comment window closed. It took department an average of nine days to post comments online after receiving them, according to the analysis. The most prolific commenters were Nucor and U.S. Steel with 1,064 and 1,009, respectively.

A waiver request Seneca Foods Corporation submitted for tinplated steel it had already agreed to purchase from China was among the denials. U.S. Steel had objected, calling the tinplate a “standard product” that’s readily available in the United States. In fact, U.S. Steel said it currently supplies the material to Seneca Foods, the nation’s largest vegetable canner.

The New York-based Seneca Foods declined to comment. But in its waiver application, the company said domestically made tinplate “is of inferior quality to imported material.” Seneca Foods also said it’s unclear, at best, if U.S. suppliers have the ability or willingness to expand their production in the long term to meet the company’s annual demand for the material.

Philadelphia-based Crown Cork & Seal, a manufacturer of metal packaging for food and beverages, submitted a sharply worded attachment to its waiver application that anticipated pushback from domestic manufacturers. American steel mills, the document said, cannot meet aggregate demand for tinplate and have no plans to increase their capacity.

“We anticipate the U.S. mills will attempt to rebut this statement when they object to this exclusion request, but we encourage the Department of Commerce to see through their manipulative attempt to exploit the rules of the exclusion request process,” the application said.

Daniel Shackell, Crown Cork & Seal’s vice president for steel sourcing, said he’s not optimistic about the company’s chances of getting all 70 of its waiver requests approved. Eight have been granted so far primarily because the metal specified in those requests is not made in the United States. Twelve others have been denied, leaving 50 still to be decided.

“It’s hard not to interpret that the Commerce Department wants domestic suppliers to have an edge,” Shackell said.

Jay Zidell, president of Tube Forgings of America, a small company in Portland, Oregon, said he’s filed 54 exclusion requests and U.S. Steel has objected to 38 of them. U.S. Steel declared it is “willing and ready to satisfy” Tube Forgings’ demands for carbon steel tubing. But Zidell said the comments ignored past problems with metal quality and workmanship that led his company to sever a prior relationship with U.S. Steel.

Still, he’s worried the Commerce Department won’t approve all of the requests. Tube Forgings already has spent $600,000 on tariffs, he said, and may be on the hook for much more than that.

“The entire system is just screwed up,” Zidell said.

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Мінекономрозвитку: група експертів СОТ «частково підтримала» позицію України в справі проти Росії

Група експертів Світової організації торгівлі «частково підтримала» позицію України в справі проти Росії щодо обмеження імпорту залізничного обладнання, повідомила прес-служба Міністерства економічного розвитку.

У відомстві зазначили, що група експертів підтвердила порушення Росією окремих положень Генеральної угоди з тарифів і торгівлі 1994 року та Угоди про технічні бар’єри у торгівлі.

«Це перший запит, який Україна направила у Світову організацію торгівлі для протистояння торговельній агресії Росії, зокрема її непрозорим, невиправданим та таким, що носять дискримінаційний характер, діям стосовно товарів українського походження», – заступник міністра Наталія Микольська.

За її словами, Росія необґрунтовано призупинила дію виданих українським виробникам сертифікатів відповідності, обмежила у видачі нових сертифікатів та не визнає сертифікати, видані у сертифікаційних органах Митного союзу.

Згідно з повідомленням, у межах справи Україна доводила, що призупинення дії сертифікатів відповідності (14 приписів) та неприйняття до розгляду заявки на проведення сертифікації (3 рішення) призвело до дискримінації, невиправданих перешкод у торгівлі та недотримання встановленої процедури оцінки відповідності товару.

Група експертів погодилася з Україною, що видавши 14 приписів про призупинення сертифікатів відповідності, Росія застосувала процедуру оцінки відповідності таким чином, що умови доступу до ринку для українських, російських та європейських виробників залізничної продукції, були не однаковими, дискримінаційними для України.

Крім того, група експертів підтвердила, що Росія порушила свої зобов’язання (відповідно до статті III:4 ГАТТ 1994 (Національний режим) стосовно невизнання сертифікатів, виданих українським виробникам в інших країнах Митного союзу, що це, у свою чергу, створює переваги для національних виробників.

Також група експертів СОТ визнала, що Росія порушила зобов’язання за статтею I:1 ГАТТ 1994 (Загальний режим найбільшого сприяння). Україною було доведено, що Росією неправомірно не визнаються сертифікати, видані в інших країнах Митного союзу, якщо такі товари не виробляються в Митному союзі.

Водночас у Мінекономрозвитку розвитку розповіли, що група експертів не підтвердила існування систематичного обмеження імпорту з боку Росії, посилаючись на те, що протягом певного періоду часу (квітень 2014 – грудень 2016) ситуація в Україні в частині безпеки була непорівняною із ситуацією в інших країнах.

«Тобто Росією не проводився інспекційний контроль через наявність на території України «антиросійських настроїв та загрози безпеці російським громадянам», які є наслідком військових дій, які Росія сама і розв’язала», – пояснили у відомстві.

Міністерство заявляє, що здійснює детальний аналіз звіту, «на міжвідомчому рівні» опрацьовується можливість його оскарження.

Справа відкрита у 2015 році за скаргою України.

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Turkish Steel Makers Eye Exports to West Africa Amid US Tariff Setbacks

Turkish steel makers are looking to expand in West Africa and other emerging markets in response to tariffs and planned quotas which threaten their sales to the United States and the European Union, a senior sector official said.

Namik Ekinci, board chairman for the Turkish Steel Exporters Association (TSEA), told Reuters that Turkey was looking to boost its trade with West Africa and sub-Saharan countries, where there is demand for the less capital-intensive steel products that Turkey mainly exports.

“Looking at the product types these countries consume, it’s products that we have the capability to produce like rebar and pipes. Therefore, these countries are markets where we have a chance,” Ekinci said.

“This is why the market we are working with in the first stage is West Africa,” he said, adding that the Caribbean, South America and Southeast Asia were the next targets.

According to TSEA data, more capital-intensive products, used in the automotive and white goods sectors, account for a quarter of Turkey’s steel production, while products like rebar and pipes account for 53 percent.

The world’s eighth biggest steel producer, Turkey ranks second in global exports of rebar, figures from the World Steel Association show.

In a move that ignited fears of a global trade war, U.S. President Donald Trump in March imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports, leading to a 56 percent slump in Turkey’s exports to the United States between January and May.

In early July European Union countries also voted in favor of a combination of quota and tariffs to prevent a surge of steel imports into the bloc that could follow the U.S. levies.

In order to tackle the U.S. tariffs and protectionist measures, Ekinci said Turkey wanted to increase its effectiveness in other emerging markets “as the United States and the European Union adopt measures to make trade harder.”

He said a union of Turkish exporters would jointly start a new firm to penetrate the target markets through time charter shipments, aiming to increase Turkey’s market share in West Africa from below 5 percent to 15 percent by cutting shipping costs.

The project is expected to cut transport costs of steel exported to West Africa to around $30 per tonne, from nearly $100, making it significantly more competitive, Ekinci said.

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Iran Currency Hits New Lows Before New US Sanctions Take Effect

Iran’s currency hit new lows with just under a week before new U.S. economic sanctions are due to take effect on August 4, despite the appointment of a new central bank governor and a new economic team.

Arab and Iranian media reported the Iranian riyal hit a new low of 111,000 to the dollar Sunday, a bad omen for newly appointed Central Bank head Abdolnasser Hemmati.

Vice President Ishaq Jahangiri announced the new economic program Sunday as the newly-appointed central bank chief took office.

The Islamic Republic News Agency quoted Hemmati as saying “enemies are trying to destroy the country’s assets and create disappointment to the public through [the new U.S. economic] sanctions.”

Former Iranian President Abolhassan Bani Sadr, however, told VOA economic and military inside the regime are trying to profit from the situation in order to seize power.

He suggested that the powerful Revolutionary Guard,  which controls much of the Iranian economy, is trying to pressure Rouhani to stop him from negotiating with U.S. President Donald Trump.

He said these elements are threatening to push the dollar even lower in order to stop an eventual normalization of relations with Washington. But he argued that the value of the riyal is “mostly hypothetical, since there isn’t really a lot of trading going on.”

He said the powerful “militaro-economic mafia,” as he called it, is trying to gain the upper hand on Rouhani by creating economic turbulence as a warning not to negotiate with Washington.

Ali Larijani, speaker of the Iranian parliament, told the body Monday Iran needs to modernize its economy. He spoke of building what he called a “resistance economy” in order to counter U.S. sanctions. The country’s Supreme Leader Ayatollah Ali Khamenei first used the term “resistance economy” to describe Tehran’s attitude toward new U.S. sanctions.

Iran analyst Gary Sick of Columbia University said Iran “has been going through a very, very difficult period for some time,” and that it has structural problems not related to the U.S. sanctions:

“There are serious problems in their management of natural resources and their dealings with what, in effect, are environmental problems, which have been badly handled over a matter of decades and are just coming to a head right now,” he told VOA.

Sick mentioned that entire regions have dried up due to poor water management and that the building of dams has compounded the problem in some places.

He said Iranians in various regions have been protesting due to the water situation, which is unrelated to the new U.S. economic sanctions.

But he added that the situation “has of course been exacerbated by the threat of U.S. sanctions going into effect, and it isn’t surprising that Iran’s currency is being impacted, because people don’t really know what is going to happen next.”

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Pompeo to Announce US Economic Initiatives in ‘Indo-Pacific’

Building on President Donald Trump’s “Indo-Pacific” strategy,   U.S. Secretary of State Mike Pompeo will announce a series of investment initiatives in Asia on Monday focusing on digital economy, energy and infrastructure.

The announcement, to be made at a U.S. Chamber of Commerce forum in Washington, comes at a time when trade frictions with China have given U.S. trade diplomacy a sharper edge.

“The Indo-Pacific is an absolute priority of U.S. policymakers in the executive branch and in Congress,” Brian Hook, Pompeo’s senior policy advisor, told journalists in a conference call.

Countries in the region have been worried by Trump’s “America first” policy, withdrawal from the Trans Pacific Partnership trade deal, and pursuit of a trade conflict with China that threatens to disrupt regional supply chains.

The United States’ first outlined its strategy to develop the Indo-Pacific economy at an Asia-Pacific summit last year.

“Indo-Pacific” has become known in diplomatic circles as shorthand for a broader and democratic-led region in place of “Asia-Pacific,” which from some perspectives had authoritarian China too firmly at its center.

The Chamber of Commerce said on its website that the Indo-Pacific could account for half the world’s economy within decades, but needed investment of nearly $26 trillion in order to fulfill its potential.

The new U.S. initiatives and funding would be focused on digital economy, energy and infrastructure, Hook said, without giving any figures on investment amounts.

Aside from Pompeo, Energy Secretary Rick Perry and Commerce Secretary Wilbur Ross will also attend the forum, along with officials from Japan, Australia, Singapore, India and Indonesia.

China’s way, US way

Hook said the United States approach to development of the region was not aiming to counter China’s Belt and Road Initiative, which comprises of mostly state-led infrastructure projects linking Asia, parts of Africa and Europe.

“It is a made in China, made for China initiative,” he said.

“Our way of doing things is to keep the government’s role very modest and it’s focused on helping businesses do what they do best.”

Critics of Beijing’s Belt and Road Initiative, which aims to recreate the ancient Silk Road, say it is more about spreading Chinese influence and hooking countries on massive debts.

Beijing says it is simply a development project that any country is welcome to join.

Hook said Washington “welcomed” Chinese contributions to regional development, but it wanted China to adhere to international standards on transparency, the rule of law and sustainable financing.

“We know that America’s model of economic engagement is the healthiest for nations in the region. It’s high-quality, it’s transparent and it is financially sustainable,” Hook said.

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NASA Marks 60 Years Since Legal Inception

America’s dream of space exploration took its first official step 60 years ago Sunday when President Dwight Eisenhower signed a law authorizing the formation of NASA – the National Aeronautics and Space Administration.

Although humanity had been staring at the stars and wondering since they were living in caves, it took the Cold War to fire man into space.

The world was stunned when the Soviet Union on October 4, 1957, launched Sputnik — the first man-made object to orbit the Earth.

The United States was humiliated at being caught short — not just technologically, but militarily.

Eisenhower ordered government scientists to not only match the Soviets in space, but beat them.

NASA and its various projects — Mercury, Gemini and Apollo — became part of the language.

Just 11 years after Eisenhower authorized NASA, American astronaut Neil Armstrong walked on the moon. Six year later, an Apollo spacecraft linked with a Soviet Soyuz in orbit, turning rivalry into friendship and cooperation.

NASA followed that triumph with the space shuttle, Mars landers and contributions to the International Space Station. A manned mission to Mars is part of NASA’s future plans.

Last month, President Donald Trump called for the formation of a “space force” to be the sixth U.S. military branch.

NASA officially celebrates its 60th anniversary on October 1 – the day the agency formally opened for business.

 

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White House Economic Adviser Sees Sustainable US Growth

White House economic adviser Larry Kudlow said Sunday he believes the 4.1 percent growth the U.S. recorded in the last three months is sustainable in the coming months despite skepticism expressed by independent economists.

“There’s just a lot of good things going on,” Kudlow told CNN.  He said President Donald Trump “deserves a victory lap,” with “low tax rates, rolling back regulations, opening up energy, for example. Trade reform I think is already paying off. The fundamentals of the economy look really good.”

He said “business investment spending is really booming. That’s a productivity creator. That’s a job creator. That’s a wage creator for ordinary mainstream folks, terribly important.”

Kudlow said the five calendar quarters occurring fully during Trump’s 18-month presidency have now been recorded with average economic growth of 2.9 percent for the world’s largest economy.

“I don’t see why we can’t run this for several quarters,” Kudlow said.

As the 4.1 percent growth rate for the April-to-June period was announced Friday, Trump boasted that the U.S. was on track to hit its highest annual growth rate in its gross domestic product in 13 years and predicted that as the country reaches new trade deals with other countries, the U.S. would exceed its second quarter advance.

“These numbers are very, very sustainable,” he said. “This isn’t a one-time shot.”

On Sunday, Trump said on Twitter, “The biggest and best results coming out of the good GDP report was that the quarterly Trade Deficit has been reduced by $52 Billion and, of course, the historically low unemployment numbers, especially for African Americans, Hispanics, Asians and Women.”

Skeptics less upbeat

Some independent economists, however, voiced skepticism that the $18.6 trillion annual U.S. economy would continue to advance at the same pace as the last three months.

Some forecasters said the gains in recent months were mostly, although not totally, the result of temporary factors, such as the initial boost from tax cuts Trump supported that took effect earlier this year. Most analysts say that for all of 2018 the U.S. could reach 3 percent growth, which would be the best since a 3.5 percent gain in 2005, but not again hit the annual 4.1 percent growth rate recorded last quarter.

“We believe quarter two will represent a growth peak as the boost from tax cuts fades, global growth moderates, inflation rises, the Fed tightens monetary policy and trade protectionism looms over the economy,” said Gregory Daco, chief U.S. economist at Oxford Economics.

Mark Zandi, chief economist at Moody’s Analytics, said, “The second quarter was a strong quarter, but it was juiced up by the tax cuts and higher government spending.”

In the U.S., consumer spending accounts for about 70 percent of the economy, with Ian Shepherdson, the chief economist of Pantheon Macroeconomics, saying that such spending accounted for the robust second quarter.

“Consumers were really on a tear,” he said. “So to grow at 4 [percent] probably tells you people were spending the tax cuts that they enjoyed back in January, but that’s extremely unlikely to happen again.”

 

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