Allegheny Technologies will idle its operations at Midland, Pa., by the end of June 2020 due to the Section 232 tariffs. A&T Stainless imports semi-finished stainless steel slab products from Indonesia to produce 60-inch wide Direct Roll Anneal and Pickle (DRAP) stainless sheet products. The imported steel slabs are subject to 25 percent tariffs under Section 232 that have cost the company over $37 million since March 2018.
ATI holds a 50 percent share of A&T Stainless with joint venture partner Tsingshan Group. Last year ATI reported a $19.3 million loss for its share of the company.
Allegheny Technologies, a major supplier for specialty metals to Boeing and other aviation and defense companies, has been denied exemption from import tariffs by the Trump administration. Ironically, the Midland plant was closed in 2016 due to challenging international competition and then reopened as a 50-50 joint venture with its Chinese partner on March 1, 2018. The joint venture was approved just before President Trump enacted Section 232 tariffs on steel imports. On March 27, ATI filed its initial exclusion request on behalf of A&T Stainless.
The 70 employees at A&T Stainless, mostly represented by the United Steelworkers, have been notified of the impending layoffs. The DRAP will be idled in a manner that would allow operations to resume if tariff policies were substantially changed.
“The unfortunate impact on these hard-working employees is an unintended consequence of the blunt nature of tariffs,” said ATI President and CEO Robert Wetherbee. “We have no viable alternative to imports, yet have suffered unsustainable losses under this economic policy. Since March 2018, we have sought unsuccessfully to obtain a tariff exclusion, with our latest request still unanswered by the Department of Commerce. While we firmly believe we meet the criteria for an exclusion, we cannot wait any longer. Without a tariff exclusion, we have no choice but to idle the Midland operations.”
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