Manufacture This

The blog of the Alliance for American Manufacturing

Executives, labor leaders and experts come together on Capitol Hill.

President Trump’s steel tariffs are set to go into effect on Friday, and Washington is buzzing about what countries and companies will be granted exclusions and exemptions.

But when United Steelworkers President Leo Gerard came to Capitol Hill on Wednesday morning, he reminded Members of Congress about the sort of people the tariffs are designed to help – and why it is so important that action is taken to defend this critical American industry.

“We’ve seen an increase and jobs and commitments, of almost 3,000 new jobs, some in aluminum and some in steel,” Gerard said. “But we also know from discussions with some of our major employers that as things move along, and we actually see these things kick in, there’s going to be major investments in modernizing some of their facilities.”

“These aren’t just numbers,” he added. “These are in fact real people, these are people whose lives are being improved, they’re having an ability to go back to work and think about putting money away for their kids’ college, and doing the kind of stuff that would keep their family healthy and strong.”

The labor leader joined steel executives and other experts to testify at the “State of Steel” briefing sponsored by the Congressional Steel Caucus. The caucus holds the briefing in the springtime every year, but given the ongoing debate around Trump’s action on steel, the 2018 event was especially well-timed.

There was widespread agreement among the panelists that despite strong pushback from opponents of the tariffs, Trump’s decision to act is crucial to ensuring that the American steel industry can survive. For years now, American steel workers and companies have faced an onslaught of imports, and the problem has gotten so bad that the very future of the industry is at stake.

China is the root of the problem, the speakers agreed. China is making far more steel than it needs, and it dumps it into the global market. Although the United States has issued tariffs on individual steel products from China, the problem rages on because China often sends its steel to other countries, which then send it to the United States.

Brig. Gen. John Adams (U.S. Army-Ret.) argued that China continues to maintain its steel overcapacity to give itself a strategic advantage, which is why the United States must be willing to step up and defend its steel industry.

“They look at what we need for our national security and they say, ‘Let’s take it down,’” Adams said. “And they’ve got a very efficient way to do that, through state control. And they subsidize industries that they want to take over the global market, and they do it very effectively.”

But while China is at the heart of the global crisis, other nations also are contributing to the problem, the speakers said, arguing that the administration must not grant unwarranted exclusions.

“It’s not just China,” Gerard said. “As I see it, most developing countries want to have a strong industry and overcapacity to dump in other markets.”

Other speakers appearing before the panel included John Brett, the president and CEO of ArcelorMittal USA; Todd Young, managing director of government relations for U.S. Steel; John Ferriola, president and CEO of Nucor Corp.; Roger Newport, CEO of AK Steel; Mark Millett, the president and founder of Steel Dynamics, Inc.; and Tony Frabotta, vice president of finance at Zekelman Industries and vice chairman of the Committee on Pipe and Tube Imports.

“They look at what we need for our national security and they say, ‘Let’s take it down.’ And they’ve got a very efficient way to do that, through state control.” Brig. Gen. John Adams (U.S. Army-Ret.)

Steel executives noted that because of Trump’s decision to act, they will begin to stabilize after years of uncertainty and pressure. U.S. Steel, for example, recently announced it will restart one of its blast furnaces in Granite City, Ill., and bring back 500 workers – one of several investments announced by steel companies since the president’s announcement earlier this month.

“The president’s action will allow us to realize a return on our investments and will help our industry get back on a sustainable path,” Ferriola said.

But not everyone will see action from the tariffs unless a key change is made, said Roger Newport of AK Steel. There’s a loophole in the president’s action that means grain-oriented electrical steel will not be covered. Given that this steel is a key component in maintaining transmission and distribution transformers used in energy systems across the country – and that AK Steel is the only American company left that manufactures it – it’s critical this loophole is addressed, Newport argued.

The bipartisan Members of Congress who attended Wednesday’s briefing – including the chamber’s newest Member, Rep. Conor Lamb (D-Pa.) – appeared to be in agreement that something must be done to secure the steel industry against foreign threats.

“The world is complicated; it’s not getting any friendlier. So many of the actions that we see taking economically to some degree, have a military component and an ideology behind it, driving it,” said Rick Crawford (R-Ark.), who co-chairs the caucus alongside Rep. Mike Bost (R-Ill.). “And at some point in time… we just simply can’t rely on foreign sources to armor our Humvees, to provide the steel for our submarines.”

Rep. Pete Visclosky (D-Ind.), vice-chairman of the caucus, pledged to monitor the implementation of the tariffs and continue to press for strong trade enforcement. 

“On a legal and level playing field, American steelworkers can compete with anyone in the world, and the U.S. government has a responsibility to ensure that a legal and level playing field is maintained every day,” he said. “Our steel producers and steelworkers are innovative, efficient, and environmentally responsible, and they must be able to fairly compete in our global economy.” 

Click here to read the prepared testimony of witnesses and watch the full briefing.