President Donald Trump on Thursday invoked national security to order a probe into US steel imports -- a move that risks trade blowback from steel-making giant China.
"Steel is critical to both our economy and our military. This is not an area where we can afford to become dependent on foreign countries," he said after signing a memorandum ordering the Commerce Department to launch the investigation.
Trump has often accused foreign producers of dumping steel on the US market, threatening American jobs and companies. Under his "America First" policy, he wants to prioritize domestic manufacturing.
His administration in February already announced stiff duties on certain steel imports, creating an outcry from China, Germany and other countries affected.
"Dumping is a tremendous problem in this country," Trump said on Thursday. "They're dumping vast amounts of steel in our country, and they're really hurting not only our country, but our companies."
The new probe was enacted under a little-used law, Section 232 of the Trade Expansion Act, which invokes national defense reasons to protect US production.
Trump said the Commerce Department could complete it within 50 days, far quicker than the 270 days allotted under the law.
The president then will have 90 days to decide whether to take any recommended action.
- 'Nothing to do with China' -
Trump denied the step targeted China, which he had previously accused of being a currency "manipulator" before reversing course this month when calculations on reining in North Korea took precedence.
"This has nothing to do with China. This has to do with worldwide, what's happening. The dumping problem is a worldwide problem," Trump said.
"From now on, we're going to stand up for American jobs, workers, their security, and for American steel companies and companies generally," he said.
"Today's action is the next vital step toward making America strong and prosperous once again," he said.
Commerce Secretary Wilbur Ross, who formerly sat on the board of steel and mining giant ArcelorMittal (LSE: 0NSF.L - news) , told reporters in a briefing call that the survival of domestic American manufacturers was at stake.
Steel imports, he said, had risen 19.6 percent in the first two months of this year and now represented more than a quarter of the steel available in the American market.
Section 232 calls for the Commerce Department to consult with the Pentagon before any recommendations are drawn up.
- Trade challenges -
China makes more than half the world's steel but a slowdown in its economy and sagging global demand has left the industry with huge excess capacity.
Beijing in February accused Washington of protectionism for imposing duties ranging from 63 percent to 190 percent on its exporters accused of selling steel products at below fair value or of being unfairly subsidized.
Germany, too, complained in March about US duties on imports of steel plate products. It said the measure also unfairly disadvantaged suppliers in Austria, Belgium, France, Italy, Japan, South Korea and Taiwan (Taiwan OTC: 6549.TWO - news) .
Both China and Germany have said they are considering taking their challenges to the World Trade Organization.
The US Treasury Department said last week both China and Germany should do more to reduce their large trade surpluses with the United States.