Tariffs will bolster Texas’ manufacturing industry
U.S. steel producers have long faced an unfair surge in imports from China
There has been a lot of hyperbole about the impact of President Trump’s important decision to institute tariffs of 25 percent on steel imports. The Steel Manufacturing Association is the primary trade association for America’s electric-arc-furnace steel producers, and we want to set the record straight. President Trump’s national security tariffs and other measures to adjust steel imports will support manufacturing jobs in Texas. They are necessary to deal with a longstanding threat to the steel industry’s ability to serve defense and infrastructure needs.
Steelmaking plants are an important part of the Texas manufacturing economy, generating 10,000 jobs in the state and supporting more than 50,000 more related jobs. Our members own and operate dozens of manufacturing, recycling, processing and corporate facilities in Texas including: Commercial Metals Company (Dallas, Seguin); Gerdau Long Products North America (Beaumont, Midlothian); JSW Steel (USA), Inc., (Baytown); Nucor Corporation (Jewitt, Longview, Terrell); TMK IPSCO (Houston, Baytown); and Vallourec Star, LP (Irving, Houston).
For too long, steel producers have faced a relentless inflow of imports due to global excess capacity caused by countries that do not follow market principles. In particular, China has used unfair subsidies to engage in an unprecedented state-driven expansion of its steel sector. Since the 2009 financial crisis, China shifted its excess production onto global markets in the form of large exports, much of it coming to the United States. There is nothing market driven about this development. China does not follow freeenterprise practices and continued to pursue government-supported expansion long after it was clear Chinese demand was no longer growing as it had in the early 2000s. The U.S. market experienced repeated surges of imports from China and many other countries. American producers’ steel output was suppressed, with many workers laid off. Negotiations with other countries to try to address global excess failed to yield effective results.
After an 11-month investigation by the Department of Commerce, in consultation with the Department of Defense and other agencies, the government found that the increasing imports and excess steel are threatening national security. The tariffs and other measures are designed to remove that threat and restore the steel industry to health. We support these objectives.
It is important to note that many downstream steel-consuming industries also face distortive government practices by “China, Inc.” Fabricators and distributors benefit when U.S. steel production is healthy and capable of producing a diverse range of steel products in the regions that need them. Our customers know that it is not good for U.S. steel production to be decimated. In this uncertain world, relying on foreign steel alone is not a good thing, particularly in the event of a national security emergency.
Steel manufacturers are companies that generate excellent manufacturing jobs with good benefits for workers in Texas and throughout the nation. We are excited to grow production, open new facilities and reopen idled mills as the measures are implemented.
Allowing the current global excess capacity import crisis to continue to decimate the U.S. steel sector is not the way to strengthen our manufacturing base. That is why we support President Trump’s section 232 national security program on steel imports and will work with him and his administration to make the program a success.