Steel Mills

ATI Midland Closure Looming Due to Import Tariffs

January 12, 2020

Allegheny Technologies’ Midland plant may be on the chopping block if the Trump administration doesn’t approve an exclusion from Section 232 tariffs. ATI CEO Robert Wetherbee, in an op-ed for the Wall Street Journal, demonstrated how difficult it can be to support Trump trade policies and one’s own business interests.

Wetherbee believes the tariffs were imposed for “good reasons”—to counteract subsidized steel that was flooding the U.S. well below market price. “I supported that intervention and I still do,” said Wetherbee, while acknowledging that the tariffs are a blunt instrument that also has harmed many American companies, including ATI.

“President Trump’s economic policies led my company to reopen an idled steel plant two years ago, but now his steel tariffs may force us to close it—and we’re hardly alone,” said Wetherbee.

ATI imports stainless steel slabs as raw material from Indonesia, but the 25 percent import tariff has made the slabs “unreasonably expensive,” he said. “Buying American isn’t an option,” he added. Only three companies in the U.S. produce the slabs ATI requires and all three are direct competitors who need to import their own raw materials.

“One quoted us a price for 60-inch slabs that was so high, the raw materials would have cost us more than we charge for the finished product,” said Wetherbee.

“Our Midland plant is hemorrhaging money. Unless the administration approves our exclusion request to bring in 150,000 tons of stainless steel—barely 6 percent of the total U.S. stainless-steel market—we’ll be forced to idle it within months. Hundreds of Pennsylvanians will lose their jobs,” he said.

Wetherbee pointed to other companies that have suffered under the tariffs: Mid-Continent Steel and Wire, a nail producer, was saved at the last minute from closure when Commerce finally granted an exclusion. NLMK Pennsylvania is still trying to secure a tariff exemption for slab imports from its parent in Russia and other foreign sources. In December, the company was forced to lay off 100 workers at NLMK Pennsylvania.

“Such denials make no sense,” said Wetherbee. “The goal of tariffs is to bolster the U.S. steel industry. If a company proves it has no viable alternative to imports, and that tariffs would lead only to layoffs and plant closings without generating any new business for domestic mills, the administration should eagerly grant exclusions.”

“Mr. President, we implore you: Save our jobs.”