The US Commerce Department is launching an investigation to determine if some market participants are "illegitimately profiteering" from the US Section 232 tariffs on steel and aluminum, Commerce Secretary Wilbur Ross said Wednesday. "There has been a lot of speculative activity, storing inventory, [and] withholding product from the market by various intermediary parties, so the price of steel, and for a while the price of aluminum, went up far more than is justified by the tariffs," Ross told the Senate Committee on Finance in a televised hearing. "There is no reason for tariffs to increase the price of steel by far more than the percentage of the tariffs, and yet, that is what is happening."
The US began implementing a 25% tariff on steel imports and 10% tariff on aluminum imports March 23 following two separate Section 232 investigations into the effect of metals imports on US national security. Higher prices are not the result of the tariffs, but of "antisocial behavior by participants in the industry," Ross said.
When Commerce launched its Section 232 investigation April 20, 2017, US hot-rolled coil prices stood at $650/st. When the tariffs took effect March 23, HRC prices were at $853/st and have since topped $900/st.
A Commerce spokesman said Wednesday there were no further details on the investigation.
