WASHINGTON, DC - APRIL 20: U.S. President Donald Trump speaks before signing an Executive Memorandum on the investigation of steel imports, in the Oval Office at the White House, on April 20, 2017 in Washington, DC. (Photo by Mark Wilson/Getty Images)

The Trump administration has launched an investigation into whether foreign imports of steel compromise U.S. national security, a step towards fulfilling a campaign promise of cracking down more severely on the unfair trading practices of countries like China.

President Trump gathered with steel industry executives and press in the Oval Office Thursday to sign a memo directing the Commerce Department to expedite the investigation, which was officially launched Wednesday night. Trump called the signing “a historic day for American steel and, most importantly, for American steelworkers.”

Trump added that the administration would release further information in the next two weeks about its plans for the North American Free Trade Agreement, which candidate Trump repeatedly promised to renegotiate. He also criticized Canada's behavior under NAFTA, saying, "What they've done to our dairy farm workers is a disgrace" and that NAFTA had been "a disaster for our country."

In a briefing Thursday morning about the investigation, Commerce Secretary Wilbur Ross said the review would consider how much steel the United States needs to defend itself, and whether domestic capacity meets those requirements. Steel imports now make up more than 26 percent of the entire U.S. marketplace, and the report will examine to what extent those imports impinge on U.S. economic and national defense security, he said.

The investigation could result in the Commerce Department recommending that the United States impose broad tariffs on steel imports, Ross said. “The important question is protecting our defense needs. And we will do whatever is necessary to do that, but we’ve come to no conclusion yet, because the study is just recently begun.”

The investigation, which was self-initiated by the Commerce Department rather than the steel industry itself, revives a section of a little-used trade law, the 1962 Trade Expansion Act. Section 232 of the law allows the government to impose a wide variety of barriers on steel imports for national security reasons.

President Trump signed a memo on April 20, to launch a national security investigation into steel imports. "Steel is critical to both our economy and our military," Trump said while surrounded by steel industry executives. (The Washington Post)

Speaking from the Oval Office, Trump declined to say that the order was directed at China, which has about half of the world's steel capacity and has flooded the global market with cheap steel in recent years.

“This has nothing to do with China," Trump said. "This has to do with worldwide, what’s happening. The dumping problem is a worldwide problem.”

He added that the investigation could be completed in as little as 50 days, well ahead of the 360-day maximum timeline set by the law.

Executives from Arcelor Mittal, Nucor Corporation, U.S. Steel, the United Steelworkers and other companies and industry groups were present at the signing.

U.S. steel stocks surged Thursday, with United States Steel Corp. climbing 7.35 percent to close the trading day. AK Steel soared 8.6 percent, while Nucor Corporation gained 4.74 percent.

The U.S. steel industry has been shedding jobs for decades, partly due to the development of steel furnaces that are increasingly efficient and automated, and partly due to growing capacity in countries like China. Trump's protectionist trade message resonated in steel-producing states like Ohio and Pennsylvania that were vital to his election.

Yet some analysts say that if the United States were to restrict steel imports, that could raise the price of steel for the U.S. companies that use the metal to make other products, and make it harder for those companies to compete abroad.

In the briefing, Ross said this consideration would be weighed in the Commerce Department's ultimate report. “It’s a question of balancing one’s priorities,” he added.

Tadaaki Yamaguichi, the chairman of the Japan Steel Information Center, which advocates for the Japanese steel industry in the United States, said Thursday that the investigation would have negative consequences for the U.S. economy, including industries like construction and manufacturing that depend on steel imports.

"There are far more American jobs at stake in the steel consuming sector than there are in domestic steel production and this action will put many American jobs at risk because prices will rise and competition will decline," he said. "Anti-competitive action and protectionism is not the American way. All this is doing is rigging the system and corrupting the marketplace.”

Also on Thursday, U.S. Steel presented the U.S. International Trade Commission, a Washington-based trade agency, with a claim that Chinese steelmakers were undercutting competitors by colluding to set their prices. A trade judge threw out the claim last November, arguing that the agency did not have jurisdiction over antitrust cases, but the steel industry and politicians have lobbied the commission to re-hear the case.

U.S. Steel applauded the administration's national security investigation in a statement Thursday. "For too long, China and other nations have been conducting economic warfare against the American steel industry by subsidizing their steel industries, distorting global markets, and dumping excess steel into the United States," the company said. 

Thursday’s memorandum showed the administration pushing ahead with promises to use existing trade laws to crack down more heavily on what it considers unfair trading practices, coming a week after Trump appeared to walk back some of the most prominent economic promises of his campaign. Trump last week declined to label China a currency manipulator, despite campaign promises to do so and expressed support for the Export-Import Bank, after previously criticizing the credit agency.

The president made bold and often inflammatory promises about trade policy on the campaign trail, pledging to renegotiate the North American Free Trade Agreement and impose tariffs of 45 percent on imports from China and 35 percent on U.S. companies that moved manufacturing facilities to Mexico.

Since coming into office, his actions on trade have been more muted. The president signed an official memorandum withdrawing the United States from the Trans-Pacific Partnership on Jan. 23 and signed two more executive orders directing review of trade practices on March 31.

The United States has not used Section 232 to crack down on another country since before 1995, when the creation of the World Trade Organization provided other channels to crack down on countries that violate international trade practices. Yet the Trump administration has expressed skepticism about the efficacy of the WTO and said it would consider going around the organization.

The current patchwork of steel-related cases brought under the WTO are “very, very limited in nature to a very, very specific product from a very, very specific country,“ Ross said Thursday. “It's a fairly porous system. And while it has accomplished some fair measure of reduction, it doesn't solve the whole problem.”

Scott N. Paul, president of the Alliance for American Manufacturing, which represents steelworkers and industry, said the investigation “hopefully could provide some breathing space for the steel industry.”

“Getting at China’s overcapacity in steel and the scale of it is exceptionally difficult to do through conventional application of trade law. It may take an extraordinary measure, like Section 232, to make some progress and to prod China along as well,” Paul said.

Damian Paletta contributed to this report