WASHINGTON – U.S. Senators Ron Johnson (R-Wis.) and Claire McCaskill (D-Mo.), the chairman and ranking member of the Senate Homeland Security and Governmental Affairs Committee, today sent a letter to Commerce Secretary Wilbur Ross reiterating Chairman Johnson’s earlier request for data and information about the Trump administration’s decision to impose tariffs on aluminum and steel imports earlier this year.
The Commerce Department did not fully respond to Chairman Johnson’s earlier request, sent March 8, 2018. In the letter sent today, Johnson and McCaskill notified the Commerce Department that the committee may consider a subpoena if the Department does not comply in full.
“The American people and American industries deserve to know the consequences of the steel and aluminum tariffs. These tariffs will ripple throughout the entire U.S. economy and affect millions of Americans. If the Department does not produce the entirety of the information requested in Chairman Johnson’s original letter by May 17, 2018, the Committee may be forced to consider the use of compulsory process,” the senators write.
Full text of the letter is below and can be found here.
May 3, 2018
The Honorable Wilbur Ross
U.S. Department of Commerce
1401 Constitution Ave., N.W.
Washington, D.C. 20230
Dear Secretary Ross:
The Committee on Homeland Security and Governmental Affairs is continuing to conduct oversight of trade policies being implemented by the Administration. On March 8, 2018, the Administration announced the imposition of a 25-percent tariff on imported steel and a 10-percent tariff on imported aluminum. The same day, Chairman Johnson wrote to you requesting information regarding these tariffs on imported metals. Although we appreciate your reply, your response did not address many of the questions Chairman Johnson raised.
Respectfully, your response is incomplete and ignores what should be the basis for all trade discussions—to do no economic harm. In your response, you wrote that you “do not believe that the economic impact in the form of higher input costs will be as dramatic as many claim.” However, you did not offer statistical justification or data to support your statement. Instead, you provided two anecdotal examples about the cost of a can of soup and the cost of a car.
Clearly, these tariffs will have a much more far-reaching effect on downstream industries and consumer prices than explained in your response. We have heard from a number of Wisconsin- and Missouri-based manufacturers and other U.S. companies in downstream industries that will face collateral damage from the tariffs. These industries are already facing higher input costs that will ripple throughout the U.S. economy. Domestic producers of soybeans, pistachios, pork, ginseng, and many other products are now also caught up in the escalating trade tensions due to the tariffs.
Your response failed to provide three categories of information Chairman Johnson requested:
Analysis of the effect on downstream industries: Chairman Johnson requested “detailed cost-benefit analyses on the effects of the steel and aluminum tariffs . . . on each affected sector of the U.S. economy,” including “potential retaliatory tariffs.” Chairman Johnson also asked for the models and methodologies prepared or used to determine the economic effect of the tariffs. Your response noted the Department used the Global Trade Analysis Project (GTAP) model for the steel investigation, and used a partial equilibrium analysis to estimate the effect of the tariff on aluminum imports. However, your response did not provide the findings of the GTAP model or partial equilibrium analysis, or any written product detailing these findings. Your response also did not explain how the Department assessed the downstream effect on industries or the effect of potential retaliatory tariffs. An independent consulting firm, using the same GTAP model, estimated a total net loss of nearly 470,000 jobs from the tariffs. This information is necessary to understand whether and how the Department assessed the effects of the tariffs on the U.S. economy as a whole.
Steel and aluminum requirements for national security: Chairman Johnson requested data on steel and aluminum requirements for national security. Your response provided a table with figures of imported steel and aluminum by country, but did not provide the total percentage and tonnage required for national security purposes or the cumulative amount of steel and aluminum imported from U.S. allies. Such figures are needed to understand the Department’s decision-making process for the following reasons.
o First, in 2001, the Department’s investigation of imports of iron ore and semi-finished steel found that “there is no probative evidence that imports of iron ore or semi-finished steel threaten to impair U.S. national security.” However, the Department’s recent investigation resulted in a different conclusion—that steel imports do threaten national security.
o In its 2001 investigation, the Department explained that “[i]mports of iron ore and semi-finished steel are from diverse and ‘safe’ foreign suppliers, with the largest suppliers of these products being U.S. allies in the Western Hemisphere (Canada, Mexico, and Brazil).” According to your response, Canada, Mexico and Brazil—the same “diverse” and “safe” foreign suppliers in 2001—are three of the top four suppliers of imported steel.
o The Secretary of Defense warned of the “negative impact on our key allies,” stressing that targeted tariffs would be “more preferable than a global quota or global tariff.” However, the Commerce Department chose to forgo targeted tariffs in favor of global tariffs.
This information is necessary to understand how the Department could come to a different conclusion than it did in 2001, despite similar findings, legal framework, and analytical structure.
Retrospective economic analysis: Chairman Johnson requested that the Department provide any retrospective economic analyses of prior tariffs to assess the downstream effects on input-reliant industries and consumer prices. Your response does not address this request. This information is necessary to understand whether and how the Department assessed the effects of the tariffs on the U.S. economy as a whole.
Department’s metrics for success: In granting an extension for your response, Chairman Johnson asked that your response include information on how the Administration will quantify “its measure(s) of success for the steel/aluminum tariffs and how the agency is going to quantify the measure(s) of success.” Your response did not address this question.
The American people and American industries deserve to know the consequences of the steel and aluminum tariffs. These tariffs will ripple throughout the entire U.S. economy and affect millions of Americans. If the Department does not produce the entirety of the information requested in Chairman Johnson’s original letter by May 17, 2018, the Committee may be forced to consider use of compulsory process.
Thank you for your prompt attention to this matter.
Ron Johnson Claire McCaskill
Chairman Ranking Member
cc: The Honorable Robert Lighthizer
United States Trade Representative
Mr. Peter Navarro
Director, National Trade Council