Steel Mills

CSI: Slabs Should be Exempt from Section 232 Tariff

Written by Tim Triplett

California Steel Industries (CSI) is calling for President Trump to exclude semi-finished steel from the 25 percent tariff he is expected to impose on steel imports under Section 232.

CSICSI is a “slab converter” mill, relying almost entirely on imported slab as feedstock to produce coil steel sheet and electrical resistance welded (ERW) pipe. Because steel slabs are not consistently available in the United States, nor are they produced anywhere in the western U.S., CSI buys its slabs primarily from Mexico, Brazil and Japan. The company is the largest customer by tonnage of the Port of Los Angeles, importing more than 1.5 million tons of slabs annually. It supplies finished steel products to hundreds of manufacturers and distributors, supporting thousands of jobs across the western U.S.

Placing tariffs on slabs may run counter to President Trump’s goal of protecting American steel jobs. The slabs are critical to the health of converters such as CSI, as well as integrated steel mills, which supplement their production needs with imported slabs. Imported slabs represent about 6.3 percent of total steel demand in the U.S. There was no surge of imported slabs in 2017.

“So, imported slabs are not part of the problem, but part of the solution, particularly in the western U.S.,” said CSI President and CEO Marcelo Botelho Rodrigues. “Our model allows us to maintain our operations in California and comply with the strict environmental regulations of our home state.”

Rodrigues noted that there have never been unfair trading cases filed against slab imports. “We are for fair trade, and the international slab market in which CSI participates has no problems in that area,” he said. “Furthermore, we do not buy slabs from China.” On the other hand, he said, CSI was a key participant along with industry peers as a plaintiff in numerous antidumping and countervailing duty cases against unfairly traded finished sheet and pipe products.

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