Trump is right to act on for­eign steel

The Hamilton Spectator - - OPINION -

This ap­peared in the Pitts­burgh Post-Gazette:

The pres­i­dent and CEO of U.S. Steel, David Bur­ritt, said he be­lieves that Pres­i­dent Don­ald Trump will take strong, de­ci­sive ac­tion against for­eign steel dump­ing. We hope he is right. A crack­down — long past due —not only would help Amer­i­can steel­mak­ers’ bot­tom lines but shore up na­tional se­cu­rity.

Dur­ing the Cold War, the fed­eral gov­ern­ment was so con­cerned about Amer­ica’s steel-mak­ing ca­pac­ity that it stock­piled the raw ma­te­ri­als needed for pro­duc­tion. Now, com­mu­ni­ties na­tion­wide are strug­gling with pol­lu­tion caused by those sites.

The geopo­lit­i­cal con­sid­er­a­tions are dif­fer­ent to­day, but steel-re­lated na­tional se­cu­rity con­cerns re­main. Worse, they re­main un­ad­dressed. U.S. steel­mak­ers strug­gle to com­pete against for­eign pro­duc­ers that sell at be­low-mar­ket rates, partly be­cause of sub­si­dies from their gov­ern­ments. The un­fair com­pe­ti­tion comes from ad­ver­saries, such as China, but also from al­lies, in­clud­ing Ja­pan, Tur­key and South Korea.

This is not about petty pro­tec­tion­ism. If steel­mak­ers can’t com­pete, they shut down, and Amer­ica loses ca­pac­ity. Or, with rev­enue down, the com­pa­nies put off cap­i­tal projects needed to re­main mod­ern, un­der­cut­ting their com­pet­i­tive­ness in another way. Once ca­pac­ity is lost, it can’t be ramped up again in a hurry.

Dur­ing an in­ter­view last week with The Wall Street Jour­nal, Trump, who cam­paigned on a pledge to level the trad­ing play field, as­sailed steel dump­ing but said ac­tion might have to wait “till we get ev­ery­thing fin­ished up be­tween health care and taxes and maybe even in­fra­struc­ture.”

Dur­ing a call with an­a­lysts in the same week, Bur­ritt out­lined $1.2 bil­lion in cap­i­tal im­prove­ments his com­pany is mak­ing to stay in the game, and he said he be­lieves a strong re­sponse on dump­ing from fed­eral of­fi­cials — “we do be­lieve they’re go­ing to go broad and they’re go­ing to go deep” — is forth­com­ing. Well and good, but the re­sponse should come sooner rather than later. Dur­ing the Cold War, the gov­ern­ment went to great lengths to en­sure the steel in­dus­try’s vi­a­bil­ity. It’s no less im­por­tant now.

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