Steel Executives Tell Steel Caucus Members: 'Don't Blink' on Section 232 Tariffs
As momentum seems to build in the Senate to rein in Section 232 tariffs, steel company CEOs told a sympathetic group of Congress members that the tariffs are working to increase domestic producers' market share and increase profits as well as employment numbers and pay for steelworkers. "The U.S. steel industry is still vulnerable. Now is not the time to blink," U.S. Steel CEO David Burritt said. Section 232 tariffs or a hard quota "must continue to be applied to all steel-producing countries, especially the top import sources. If the Section 232 doesn't apply everywhere, it's nowhere as border leaks will continue from global excess capacity."
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In an interview after the panel, Burritt said he doesn't think CBP is up to the task of stopping mislabeled steel. "I don't think there's good enforcement at our borders in any respect at all," he said.
The Steel Caucus, a bipartisan group of House members who have steel mills in their districts, invited the CEOs of U.S. Steel, Nucor and ArcelorMittal USA; the chairman of the trade group that represents steel pipe producers; the CEO of a steel recycling mill operator; and the head of the United Steelworkers union to testify March 27 about Section 232 tariffs and the state of the steel industry now.
Domestic mills reached 80 percent capacity, the goal the Commerce Department identified, but Burritt said touching that number for a few weeks isn't enough. "It's a plateau to be sustained as the bare minimum necessary for the industry to survive and supply our country over the long term."
Burritt expressed confidence after the panel that President Donald Trump will not lift tariffs without quotas to replace them, because he knows the tariffs are doing what they were designed to do for domestic steel mills. "I'd be completely surprised if the president backed off of this," he said.
Rep. Pete Visclosky, D-Ind., said he's worried about the fact that Chinese overcapacity has not been reduced since the tariffs began. "The 232s will not be there forever," he said. So, he said, there needs to be generous funding for trade enforcement at the International Trade Commission and the International Trade Administration. Barbara Smith, CEO of Commercial Metals Company, which runs mills that recycle steel, said that in her segment Turkey's the main offender of subsidized overcapacity, not China. She said in an interview afterward that Mexico also dumps product in the U.S. in her segment.
Leo Gerard, the president of the USW, recounted how someone once asked him why the steel industry wins so many antidumping and countervailing duty cases at the ITC. He said they've won all but six cases they've brought. "Because they all cheat," he said.
But Gerard parted ways with the steel executives, who say that Canada must continue to face tariffs or accept quotas no higher than historical export levels. Gerard also represents Canadian steelworkers, and he said their industry is not subsidized. Moreover, he noted, the exports and imports of steel between the two countries are about even.
Mike Bost, R-Ill., pushed back on Gerard's statement, and told him the focus of the committee is protecting U.S. steelworkers, not Canadians. Many in this group of Congress members oppose any change to Section 232, even moving the responsibility of determining imports' effects on national security to the Defense Department from the Commerce Department. About 10 members attended the two-hour hearing March 27.
Smith said that her company sells the Pentagon armored plate for Humvees and the like, but that it's a very small part of the business. "We could not be a viable company if we didn't have our base business of concrete-enforcing steel," she said.