Congressman: Maintaining a Strong Steel Industry is a “Matter of National Security”

By Elizabeth Brotherton-Bunch
May 10 2021 |
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Rep. Frank Mrvan (D-Ind.), who toured the Burns Harbor steelmaking facility on Monday, also voiced support for a major infrastructure investment package.

The “Section 232” tariffs on imported steel must remain in place to ensure American steelmakers and workers can “compete on a level playing field,” Rep. Frank Mrvan (D-Ind.) said on Monday.

Speaking at a digital press conference alongside Cleveland Cliffs President and CEO Lourenco Goncalves, the congressman said that Section 232 trade enforcement is “a matter of national security” that not only ensures the United States is able to make the steel it needs for its national and economic security, but also will support “the next generation of jobs.”

And Mrvan also voiced support for President Biden’s American Jobs Plan, noting that major infrastructure investment will not only improve the health of America’s roads, bridges, ports, pipelines and more but also will provide a major boost to American manufacturers like Cleveland Cliffs.

“It is not only investing in the infrastructure, it’s investing in the American manufacturing base and the American worker,” Mrvan said.

Mrvan joined Goncalves on Monday for a tour of the company’s Burns Harbor steelmaking plant in Indiana. Cleveland Cliffs took over Burns Harbor and 18 additional facilities after it acquired ArcelorMittal USA in 2020. Since that time, Cleveland Cliffs has hired 710 people for positions at the former ArcelorMittal facilities, Goncalves said, adding that the company also plans a number of capital investments designed to improve them.

“We plan to grow them, and we want to be here,” Goncalves said. “We want to have all these companies that we acquired… to be growing. And they are growing. We are hiring people.”

Section 232 trade enforcement has been essential to ensuring companies like Cleveland Cliffs can compete. Dozens of steel facilities closed and thousands of steelworkers lost their jobs over the past decade because of global steel overcapacity and the dumping of unfairly traded steel into the U.S. market.

But Section 232 helped the domestic steel industry stabilize. As the Economic Policy Institute recently found, the trade enforcement action led to the direct creation of 3,200 jobs and investments of $15.7 billion in new or upgraded steel facilities. Notably, Section 232  has “had no meaningful real-world impact on the prices of steel-consuming products,” like motor vehicles or household appliances.

But removing Section 232 now could spell disaster for the domestic steel industry, EPI warned, as global overcapacity remains unresolved. It also would provide “an advantage for low-priced, high carbon-polluting producers overseas.”

Mrvan noted that the Congressional Steel Caucus, of which he is a co-chair, has maintained strong support for Section 232. The caucus sent a letter to President Biden in February asking him to keep Section 232 “in place to ensure the industry can continue its road to recovery.”

Tariffs like Section 232 are always supposed to be a temporary stop gap, Goncalves said, but the problem is that global overcapacity continues unchecked. There isn’t a level playing field right now.

“We need to find ways that bad players will not be allowed to play the wrong way and take advantage of the American market, and more important, take advantage of the American workers,” he said.

Goncalves dismissed the notion that there are supply and demand issues in steel because of Section 232. Those issues have far more to do with the COVID-19 pandemic, as the shutdown of auto plants in March and April 2020 had widespread consequences, including in the steel industry.

Things are coming back now, but there are lingering effects, which can be seen all over the place (think: semiconductor shortages). “When everybody shuts down at the same time, you create disruptions,” Goncalves said.

The domestic steel industry is working hard to meet demand, and Goncalves added that Cleveland Cliffs is working to do so while offering “the lowest price possible in this business.” The only way that steelmakers across the globe can compete is via unfair trade practices. “Nobody else can come here and undercut our prices unless they start dumping,” he said.

It would be a huge mistake, therefore, to confuse what’s happening as a result of COVID-19 shutdowns with Section 232. Removing the tariffs now would allow trade cheaters to resume practices like dumping, imperiling the domestic steel industry at a critical time.

“Tariffs are there for protection, and sometimes, to protect national security,” Goncalves said. “We can’t mess with that.”