President Donald Trump is aggressively taking advantage of a seldom-used trade law that would allow him to impose penalties on steel and aluminum imports if the U.S. Commerce Department determines they jeopardize national security.

While beleaguered U.S. steel and aluminum producers welcome Mr. Trump’s efforts to make good on a campaign pledge, trade experts say the penalties could spark retaliation by exporting countries and might harm U.S. manufacturers who rely on foreign made steel.

“If the administration imposes a remedy, it has to be done wisely and it has to be calibrated. Otherwise, the administration could cause some damage to downstream U.S. steel producers and workers, and nobody wants that,” said Gregory Spak, head of the international trade group practice of law firm White & Case.

In late April, Mr. Trump ordered the Commerce Department to investigate whether imports of steel and aluminum are jeopardizing national security. A provision of a 1962 trade law gives him the authority to do that and impose penalties if they are.

Since then, Commerce Secretary Wilbur Ross — a former steelmaker himself — has swung the agency into high gear. A public hearing on steel imports was held May 24. Even though the law gives him nine months to complete an investigation, Mr. Ross said he expects to report to the White House by the end of this month.

A public hearing on aluminum imports is slated for June 22 in Washington, D.C.

“I find that schedule astonishingly fast. These are not open-and-shut, easy, black-and-white issues,” said Spencer S. Griffith, a trade attorney with Akin Gump Strauss Hauer & Feld.

The last president to try to take advantage of the 1962 trade law was George W. Bush. But his administration’s 2001 investigation into imports of iron ore and semifinished steel determined that national security was not threatened and no penalties were imposed.

The Commerce Department must consider a number of factors in reaching its conclusion, including whether U.S. steelmakers can meet national defense needs and whether domestic steelmakers are healthy enough to continue to invest in and develop the products the defense industry needs.

At the May hearing, U.S. steel producers did their best to define national security in the broadest terms possible. They said protecting the domestic industry from a wide swath of imports would allow them to be consistently profitable and reinvest in their business. For them, national security-related products include tubular products used by the energy industry and electrical steels used in the nation’s electricity grid.

Mr. Griffith expects the White House will be receptive to their argument.

“I think it’s fair to say the administration will probably use a large definition of national security,” he said.

The U.S. steel industry’s own statistics indicate that 3 percent of the 86.5 million tons of steel U.S. mills shipped last year went to national defense and homeland security. Given that fact and that U.S. mills are operating at about 75 percent of capacity, it’s hard to make the national security case, according to Steve Charnovitz, a George Washington University law professor.

“The whole logic to this is bogus,” he said. “It’s hard to imagine an argument where you would want to stop imports to improve national security.”

Some domestic steel users agree. They say they rely on imports because U.S. steelmakers cannot provide the quality steels they need at affordable prices.

Increasing the costs of imports “would cause serious injury to thousands of small, downstream manufacturers,” officials of the Precision Machined Products Association said in written comments to the Commerce Department.

If Mr. Ross determines that steel imports threaten national security, Mr. Trump has 90 days after receiving the Commerce Department report to act. The president could impose penalties or try to negotiate import-limiting trade agreements with exporting countries.

If penalties are imposed, China, South Korea and other steel-exporting companies could challenge them as violating World Trade Organization rules.

Mr. Griffith said the WTO allows countries to breach trade laws if they determine it is a matter of national security. But very few countries ever invoke that right for fear of retaliation, he said.

Mr. Charnovitz expects the White House would use a ruling of restricting imports as leverage to negotiate trade deals more favorable to U.S. metals producers.

“It’s kind of a managed trade instrument. I suppose that’s the way they would try to use it,” he said.

Len Boselovic: lboselovic@post-gazette.com or 412-263-1941.

First Published: June 5, 2017, 4:00 a.m.