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Former President of AIIS Weighs in on Cold Rolled Trade Case

Written by David Phelps

The following is a “Letter to the Editor” received from David Phelps, the immediate past president of the American Institute for International Steel (AIIS):

I feel obliged to comment on the subject of the new trade cases against CR.  First of all, they are ostensibly to protect American jobs and of course, profits and production in the steel industry — all arguably laudable things.

The domestic petitioners always claim that they are willing to compete against “fairly traded” imports — of course, as defined by them.  So, who are the fair traders?  Not even our Canadian and Mexican NAFTA partners, who have been accused of law-breaking on many occasions, even if not this time.  Go around the world and it is clear that every major producer of steel, and many minor producers, have been accused of the heinous crime of unfair trade.  Maybe we need to go to Ireland and Switzerland to find a producer not so accused.  If everyone is guilty, one has to wonder about the nature of the charge.

But what about the claim about protecting steel industry jobs?  First of all, according to government statistics, 55 percent of merchandise imports are imported for further processing in manufacturing facilities in the US.  One can see from these data that the higher the level of imports, the stronger our economy is and of course, the stronger the manufacturing sector.  Without a doubt, imports of steel are further processed in the US, supporting American manufacturing jobs.  In fact, again according to government statistics, there are upwards of 60 manufacturing jobs in manufacturing sectors that consume steel for every one job at a steel mill.  So, whose jobs are we protecting?  

The domestic steel industry has been at this protectionist game for more than 50 years and the latest gambit is just another effort on their part to run to the government for support and protection.  One has to wonder when the spirit of competition fostered by Ken Iverson will reappear in the steel industry.  Wait, I hear such rumblings in Arkansas, Big River Steel, which is also fighting a different kind of battle against a company trying to use government power to stifle competition.  

Dave Phelps

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