Trade Cases
Letter to the Editor: ‘Where is the Threat?’
Written by Tim Triplett
June 29, 2017
As if it is not enough to call every ton of imported steel “dumped,” “subsidized” or “unfairly priced,” steelmakers are now using a scare tactic by telling our politicians we need a strong domestic steel industry in the interest of national security. As a Bloomberg report pointed out, less than 3 percent of the steel consumed in the USA is going into the defense industry. Even the energy sector consumes only about 6 percent. That’s about 1 million tons for these two important industries. Where is the threat?
Of the 10 largest exporters of steel into the USA, eight are close allies, which includes about 25 percent coming from our NAFTA partners, who also happen to be the destination of 85 percent of our steel exports. Three of these are NATO members. Take out Russia and China if you want, but other than this where is the threat?
If a healthy domestic steel industry is so important for our national steel security, why have the majority of the expansions and acquisitions in the last decade been done by foreign companies such as ArcelorMittal, ThyssenKrupp, Evraz, NLMK, Essar, JSW, Vale and Gerdau? With the exception of Nucor and Big River, no domestic steelmaker has made a major expansion. The last blast furnace built in the USA was in 1967 in Burns Harbor.
After WWII, the USA was the major industrial powerhouse in steelmaking and steel processing. We lost names such as Bethlehem Steel, Republic Steel, Armco, Lukens and others. While competition from imports certainly played a role, it was mostly due to old technologies, high wages and outdated equipment that these companies went out of business. Steelmaking equipment used to be made in the USA; today almost everything is imported.
The U.S. steel industry has looked for help from Washington for over 50 years. Except for Nucor, SDI, Big River and possibly CMC, most companies are too weak financially to engage in modernization.
Closing the borders to imports is not going to be the solution. It will only kill a lot more jobs in other industries than can possibly be saved in the steel industry.
Steel Trader
(name withheld on request)
Note: Steel Market Update welcomes letters to the editor. SMU will honor authors’ requests for confidentiality in cases where they may suffer repercussions for expressing their views. We reserve the right to edit comments for style and clarity, and to decline to publish letters we feel are inaccurate or inappropriate.
Tim Triplett
Read more from Tim TriplettLatest in Trade Cases
Price on trade: What a difference a year makes!
As everyone surely knows by now, the SMU Steel Summit starts on Monday in Atlanta, Ga. So, this is a great opportunity to reflect on how much has changed since the 2024 Summit. Certainly, no one could have imagined the wholesale and transformative changes to U.S. and global trade policy.
Canadian steelmakers call for protection after US adds derivatives to S232
The Canadian Steel Producers Association expressed dismay upon the news that the Trump administration had added over 400 products to the list of derivative products covered by the 50% Section 232 tariffs on steel and aluminum.
China opens WTO dispute with Canada over steel, aluminum
China has requested dispute consultations with Canada at the WTO about Canadian measures on Chinese steel and aluminum imports.
Inclusion requests result in 400+ additions to S232’s derivatives list
The Commerce Department has added over 400 HTS codes to the list of steel and aluminum derivative products covered under the Section 232 tariffs.
Leibowitz on Trade: The New World Orders
The question of the new world order was on many minds last week when I spoke on another SMU Community Chat. The short answer is that nobody knows in detail what the effects of all the economic and geopolitical developments will be.