Repeated surges in unfairly traded steel imports fueled by global excess capacity threaten the long-term viability of the American steel industry. The domestic steel industry directly and indirectly supports nearly two million American jobs and contributes nearly $520 billion to the economy.
Fueled by this massive global overcapacity, estimated to be nearly 600 million tons, dumped and subsidized steel imports have continued to flood into the United States putting our national and economic security interests at further risk — and causing steel plants to be idled and jobs to be lost. Despite efforts to address this import crisis through use of targeted trade remedy laws, imports have continued to increase as excess steel production is easily transshipped through third countries not subject to trade remedy orders. In addition, efforts to address the underlying causes of this crisis through international fora have not produced concrete results to date.
Over the last year, the Commerce Department undertook an investigation under Section 232 of the Trade Expansion Act of 1962 to determine if steel imports threaten to impair national security. The Secretary of Commerce determined that the steel industry is essential to our national security and has been adversely impacted by the significant level of imports in recent years, and recommended that the president take action to limit steel imports through tariffs and/or quotas. The president then imposed a 25 percent tariff on steel imports, with certain countries subject to quotas as an alternative remedy. The objective of these measures is to enhance U.S. national security by permitting the domestic steel industry to return to an economically sustainable level of capacity utilization.
The president’s trade actions are working. Foreign steel imports have decreased 20 percent from April — when the tariffs were enacted — until July, which is the most recently available final import data. And the trade actions are putting steel workers back to work. U. S. Steel has restarted facilities in Granite City, Illinois, which means 800 steel jobs.
With the 232, the steel industry can be on track to maintain our essential contributions to national security and critical infrastructure, and we are grateful for the president’s continued recognition of the steel industry. And steel using industries will benefit from having a stable supply of domestic steel.
We have the capability of producing 20 to 25 million tons of additional steel, using existing capacity, to meet customer needs. However, for products truly unavailable domestically, is a product exclusion process in the 232. But that shouldn’t become a loophole that undermines the effectiveness of the remedy, which is designed to preserve our national security.
We believe that many of the estimates about any potential consumer impact from the Section 232 tariffs have been overstated. The last time that something similar was done, by President Bush in the steel Section 201 case in 2001, the International Trade Commission estimated that there was no significant economic impact on the U.S. economy as a whole — and noted there may have been a small positive economic impact with an increase of 53,000 jobs after the tariffs were ordered.
Going into 2019, trade remains a priority for AISI and our members. However, additionally, transportation and infrastructure — and ensuring that there is a long-term funding to keep the Highway Trust Fund sustainable — is a key policy issue for us this year and we plan to continue our strong advocacy push on that into 2019.
Thank you for this opportunity to address key issues, and I look forward to the continued partnership between steel producers and fabricators.
Thomas Gibson is the president and CEO of the American Iron and Steel Institute. For more information about the institute’s initiatives, visit steel.org.