House Steel Caucus, Steel Executives Hail Section 232 Tariffs

An array of steel executives and the United Steelworkers' president joined House members whose districts include steel mills in celebrating the Section 232 tariffs that are slated to take effect on March 23. "National security is only as strong as American steel, and the American steel industry is strongest when we have the ability to manufacture steel from start to finish inside our own borders," said Todd Young, US Steel's chief lobbyist. Only one aluminum representative was at the Congressional Steel Caucus hearing March 21. Bauxite, the raw material for aluminum, has no domestic source.

The executives said the tariffs would need to last for several years to make new investments make sense at their mills, even as some mills have already taken a furnace out of mothballs. Mark Millett, CEO of Steel Dynamics, called out South Korea, which he said imports "vast quantities of dumped and subsidized steel from China to make further processed steel products that are then shipped to the United States." Tony Frabotta, an executive with Zekelman Industries, agreed that countries are laundering Chinese steel, which is no longer economical to import because of antidumping duties. He said pipe and tube imports rose 82 percent in 2017 from the previous year. Frabotta also told Congress that one of his customers said a would-be supplier told him they could get around AD/CV duties by shipping products to Malaysia and changing the country of origin.

Even as the steel executives praised the comprehensive nature of the tariffs, saying it would be more effective than the AD/CVD approach the steel industry has taken for years, AK Steel CEO Roger Newport expressed concerns that the tariff lines are not comprehensive enough. In the case of electrical steel, Newport said, lamination cores and core assemblies will be able to come in tariff free, and imports have surged already of those products.

The lawmakers said they were disappointed their colleagues claim they're being protectionist. They said the president understands that national security cannot exist without economic security. Rep. Michael Doyle, D-Pa., brought newly elected Conor Lamb, D-Pa., to the hearing, and said, "we're breaking him in right." Doyle said the AD/CVD remedies have not been working, but he's also worried the 232 tariffs may not be as effective in boosting domestic steel production as expected. "The devil's in the details," he said. "How is this exemption process really going to work? We need to get proper funding to these agencies," he said, singling out the International Trade Commission as underfunded.