Steel industry pleads it’s vital to U.S. security

The Trump administration’s investigation into whether imported steel threatens national security was enthusiastically greeted Wednesday by U.S. steelmakers, who said the best way to ensure the vitality of their industry is through a comprehensive approach to curbing unfairly traded imports.

But others who testified at a U.S. Department of Commerce hearing

in Washington, D.C., pleaded for a measured approach — saying U.S. steelmakers either can’t or refuse to supply quality, affordable steels used by other U.S. companies that make cars, tires and products for the energy and construction industries. Protecting those jobs is important, too, they emphasized.

The four-hour hearing came a month after President Donald Trump ordered an investigation under an infrequently used provision of a 1962 trade law that allows the president to penalize imports if they affect national security.

Thirty-seven speakers testified before a panel of officials from the Commerce Department and other government agencies. Commerce Secretary Wilbur Ross said his agency expects to send its report to the White House well before the 270-day deadline imposed by law.

“Our hope would be to complete the report by the end of June,” Mr. Ross said at the outset of the webcast hearing.

U.S. steel producers have complained for years that unfair imports have forced them to lay off workers and close plants. Imports currently account for about 26 percent of the U.S. market, down from 30 percent or more a few years ago.

To combat the imports, domestic producers have filed and won dozens of trade complaints accusing foreign producers of selling steel that is below market cost or that is government subsidized. The victories led to duties that make imports more expensive.

But domestic steelmakers say foreign competitors easily avoid penalties.

“We’re playing a game of whack-a-mole,” Mark Millett, president and CEO of Steel Dynamics, a Fort Wayne, Ind., steelmaker, told the panel.

David Rintoul, senior vice president of Pittsburgh-based U.S. Steel’s tubular business, agreed. “We need to understand that the traditional remedies do not work,” he told the panel.

Mr. Rintoul said imports of tubular steel used by the energy industry have captured nearly 50 percent of the U.S. market.

The biggest offenders are China and South Korea, which have little use for the products in their own countries, he said. Consequently, U.S. Steel mills that employed more than 3,000 people in 2014, employed 950 six months ago and currently employ about 1,300, he said.

“Foreign suppliers have made it their mission to steal this market,” Mr. Rintoul told the panel.

A representative of the Chinese embassy said U.S. producers can easily meet defense industry needs. He cited U.S. steel industry statistics that only 3 percent of the 86.5 million tons U.S. mills shipped last year went to national defense and homeland security.

“There is no evidence of steel imports threatening to impair U.S. national security,” the Chinese official said.

U.S. steelmakers urged Mr. Ross to take a broader view of national security. From their perspective, protecting U.S. steelmakers from a wide variety of imports would make the industry healthier and enable it to invest in new technology.

“National security begins with primary steelmaking,” said John Ferriola, president and CEO of Nucor, a Charlotte, N.C., steel producer.

Terrence Hartford, who heads the defense industry business of Allegheny Technologies, told the panel that the Pittsburgh specialty metals producer’s health depends on all of its businesses, including the stainless steel unit that has been under relentless pressure from imports.

“Imports directly affect our ability to address the nation’s defense needs,” Mr. Hartford said.

Others claimed steel used to drill for or ship oil or natural gas or in transformers used to transmit electricity are vital to the nation’s defense.

“We need to talk about the complete industry,” United Steelworkers union president Leo Gerard said.

Several speakers said any penalties the Trump administration decides to impose on imports should not apply to them. They said their companies and workers rely on imports because domestic steelmakers cannot make the quality steels they need at affordable prices.

“The quality is not available in the U.S.,” said Tim Johns, vice president of Nippon Steel and Sumikin Cold Heading Wire, a Japanese-owned joint venture in Indiana that supplies steel wire to the U.S. automotive industry.

Once Mr. Trump receives the Commerce Department report, he has wide latitude. He could decide to do nothing, which is unlikely given his campaign promises, or impose penalties designed to remove the threat to national security.