US importers challenge the call for more steel trade restrictions


The American Institute for International Steel recently hosted a forum in Washington DC for those likely to be negatively impacted by steel import restrictions that could follow the government’s ongoing Section 232 investigation.

They included speakers representing US traders, ports and steel end-users who believe the outcome of the 232 case — aimed at limiting imports on national security grounds — could have negative economic consequences for the US and serve to ultimately weaken US security.

“Restricting trade in steel will not enhance our national security. In fact, the opposite is true,” AIIS President Richard Chriss said. “Restricting trade, particularly trade that disrupts commerce, adversely affects our key allies, and that is highly likely to lead to retaliation, which weakens our national security, rather than strengthening it.”

Chriss noted that his former boss, US Senator Charles Grassley, “often used to say that countries that trade together are unlikely to go to war against each other.”

The AIIS claimed that while the US steel industry directly employs 142,000 American workers, an estimated 6.5 million are employed by steel-using manufacturers.

“The important question is whether import restrictions can avoid doing more harm to steel consumers than any good to steel producers,” said international trade lawyer Lewis Leibowitz.

Stuart Speyer, president of Tennsco Corp., a family-owned manufacturer of storage products based in Dickson, Tennessee, noted that last March, as a result of various trade cases, the US imposed duties on steel produced in seven countries, “effectively eliminating the importing of steel from 73% of the world’s most cost-effective steel producers.”

He added that by restricting foreign competition, US steel mills were able to raise domestic steel prices, creating “a huge challenge” for his company, which employs 650. “Steel averages over 30% of our manufacturing cost and on many items over 50%,” he said.

AIIS Chairman John Foster noted that in 2016, nearly 20% of all steel coming into the US was purchased by domestic mills as semifinished steel they would finish and sell. He said those imports were “the result of well-considered decisions based upon quality and cost. This is how the steel supply chain works.”

Foster, who is also president of the steel trading and trade services company Kurt Orban Partners, noted the US last attempted a Section 232 case in 2001 and found the military accounted for only 0.3% of American steel demand. He added that an American Iron and Steel Institute report from just three months ago showed the amount of steel going into national defense and Homeland Security was calculated to be only 3%.

“Let us not harm our critical downstream manufacturers, from small businesses like Tennsco to the likes of General Motors, by confusing the politics of trade with the economics of trade,” Foster said in the forum’s opening remarks. “The retaliation from our trading partners would be swift, and it would adversely affect many critical sectors of our economy beyond steel. Put in other words, let us not unnecessarily look to protect the few at the expense of many.”

Source: Platts

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