U.S. Section 232 import measures—which imposed a 25% tariff and other trade remedies on certain steel products—improved industry conditions, spurred investments, and directly created 3,200 new steelmaking jobs, according to a new EPI report. Once implemented in 2018, the measures helped curb U.S. steel imports by 27% by 2019 with no meaningful real-world impact on the prices of steel-consuming products, such as motor vehicles.

The report, Why Global Steel Surpluses Warrant U.S. Section 232 Import Measures, examines how these measures, implemented under Section 232 of the Trade Expansion Act of 1962, impact domestic steel production and consuming industries, and recommends that these measures be retained until a multilateral solution to the problem of global excess steel capacity can be achieved.

Excess steelmaking capacity in major exporting countries, including China, India, Brazil, Korea, Turkey, the EU, and other nations, much of it from state-owned and state-supported enterprises, has grown rapidly, raising national security concerns for the United States. Global excess capacity is nearly six times the productive capacity of the entire U.S. steel industry, according to the Organisation for Economic Co-operation and Development (OECD).

“For decades, global steel supply surpluses have undermined the U.S. steel industry with surging imports to U.S. markets undercutting prices, domestic production, employment, and investments. This oversupply jeopardizes the fundamental health of the U.S. steel industry—one of the cleanest and most energy-efficient steel industries globally,” said Robert E. Scott, EPI’s director of trade and manufacturing policy research and co-author of the report. “The Biden administration should maintain the import restraints on steel until they can reach a multilateral solution.”

The steel industry plays a critical role in supporting the welfare of other industries essential to the broader health and operation of the economy and government and is a source of many high-wage manufacturing jobs. In 2017, prior to Sec. 232 import measures, the U.S. steel industry supported nearly 2 million jobs that paid, on average, 27% more than the median earnings for men and 58% more than the median for women.

Following implementation of Sec. 232 measures in 2018—and prior to the global downturn in 2020—U.S. steel output, employment, capital investment, and financial performance all improved. In particular, U.S. steel producers announced plans to invest more than $15.7 billion in new or upgraded steel facilities, creating at least 3,200 direct new jobs, many of which are now poised to come online.

“Short of a multilateral solution to chronic excess capacity, Section 232 measures help preserve an industry critical to the U.S. economy,” said Adam S. Hersh, Director of Washington Global Advisors, LLC, and co-author of the report.