Steel industry looks to jump-start Trump trade engine

Posted on 25 September 2017

Source: Hellenic Shipping News

Steelworkers from around the country descended on Washington this week to ask their legislators one thing: What’s happening with the Trump Administration’s Section 232 investigation?

As a candidate, President Donald Trump talked tough on trade and told blue collar voters that he would bring back the steel jobs that left their towns. And, early on his presidency, it seemed like steel would be a focus.

In his first week in office he signed a series of executive memorandums to revive the Keystone XL and Dakota Access pipeline projects and directed the US Commerce Department to make sure all future pipelines built in the US are constructed out of American-made materials. Then in April, US Department of Commerce Secretary and former steel industry executive Wilbur Ross announced that his department self-initiated a Section 232 investigation on the impacts of steel imports on national security.

The investigation, which could result in the introduction of tariffs, duties or other measures, typically takes 270 days, but the administration said it was fast-tracking the decision and expected to release the results by the end of June.

Leading up to the expected release of the results, the market was filled with speculation about what Section 232 may bring. For weeks it seemed like the steel industry version of “The Boy Who Cried Wolf,” except in this case there was more talk on tariff-based quotas than canines.

Then the results were delayed indefinitely, with Trump telling the Wall Street Journal in July that the administration was “waiting till we get everything finished up between healthcare and taxes and maybe even infrastructure” to make a decision on whether US national security is threatened by imports.

Suddenly the question everyone was asking was no longer “what is 232 going to bring,” but “is 232 going to happen at all?”

“The delay in acting is devastating,” United Steelworkers International Vice President Tom Conway said in a statement. “Plants are closing, jobs are lost and communities are injured while politicians delay. Now there are rumors that action is being delayed so Congress can focus on tax reform. That’s an insult to the hardworking men and women whose jobs depend on the industry.”

But it’s not just the steelworkers union calling on the administration to take action. The American Iron and Steel Institute and Steel Manufacturers Association sent a letter to Trump at the end of August, urging him to take action on 232.

“The need for action is urgent,” the letter — which was signed by more than 30 US-based steel industry executives — states. “Since the 232 investigation was announced in April, imports have continued to surge. In June, steel imports hit their highest monthly total in more than two years by capturing 30% of the US market.”

The Metals Service Center Institute also sent a letter to Trump urging swift action on Section 232 and said it’s hopeful the Commerce Department is getting close to releasing its findings. And the American Line Pipe Producers Association, which formed earlier this year and focuses on the large-diameter segment of the market, is not only looking for a resolution to the 232 investigation — it is still waiting to hear the outcome of the US pipeline memorandum signed during Trump’s first week in office.

“ALPPA strongly supports policies to promote the maximum use of large diameter line pipe made in America, using steel that is sourced domestically as well,” said Timothy Brightbill, counsel to the ALPPA. “We have plenty of capacity available today to help make that happen. We can also supply virtually all of our customers’ demands for high-quality material. If the Administration wants to increase US manufacturing and US jobs, we want to help. This is a perfect place to take rapid action.”

But while Team Steel is ready to go full force with a 232 action, downstream manufacturers are asking that the administration take its time and consider the potential consequences for US manufacturing overall.

“We are very concerned about the unintended and disastrous consequences which Section 232 restrictions on imports of basic steel products would have on our industries,” the Coalition of Downstream Steel Manufacturers and Steel Consumers said its own letter sent to Trump this month. Members of the coalition make everything from steel wire used in control cables and fasteners for military aircraft, to fabricated steel plate doors and floors for military vehicles and many types of machined and formed steel products.

And they’re quick to point out that when it comes to total jobs, the numbers are in their favor.

“Collectively, the members of our associations represent 1,003,854 jobs at 30,631 facilities, compared with 81,873 jobs at 880 facilities in the US basic steel industry,” the group’s letter states. “…It would be a tragic result for our country if, by imposing unnecessary and unwarranted restrictions on steel imports, such restrictions not only cause serious damage to our industries but also undermine the long-term viability of the US steel mills.”

While it’s clear that there are many voices arguing for many sides when it comes to 232, it remains to be seen which side Trump will settle on. Until then, the steel industry and those is serves are anxiously awaiting an outcome. 

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