March 27, 2019
By David Lawder and Alexandra Alper
WASHINGTON (Reuters) – Chief executives from American steel producers urged lawmakers to maintain strong U.S. tariffs on the metal on Wednesday to protect their industry, as Senate efforts to rein in President Donald Trump’s tariff powers gained steam.
The CEOs of top U.S. steelmakers Nucor Corp, United States Steel Corp, ArcelorMittal SA and Commercial Metals Co told the Congressional Steel Caucus that the “Section 232” steel tariffs were just starting to allow their industry to recover from damage caused by years of dumped imports and needed to be kept in place long-term.
Trump imposed the 25-percent global tariffs on steel imports a year ago to protect the industry from imports, citing national security grounds under a Cold War-era trade law. The move drew retaliation by countries including China, Canada, Mexico, Turkey and the European Union.
Little has been done to reduce excess steel production capacity in China that U.S. producers blame for most of the industry’s woes, and without the tariffs, unfairly traded imports would flood back into the U.S. market, the executives said.
“Now is not the time to blink,” U.S. Steel CEO David Burritt told the lawmakers at a hearing on Wednesday. “Section 232 must continue to be applied to all countries, especially the largest import sources, whether that’s a tariff or a hard quota. Even our best allies can be conduits for foreign steel from China or elsewhere.”
Canada and Mexico are trying to negotiate a plan to lift U.S. metals tariffs from their products. The Trump administration is demanding quotas to limit import volumes in lieu of tariffs, but Canada and Mexico are resisting.
Earlier this week, Canadian Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer made little headway in a meeting to resolve the issue, a Canadian official told Reuters.
“There was not a meeting of the minds,” the official said. “That of course is an opportunity for the minister to reflect and think about what our next steps are.”
One issue in the negotiations is addressing U.S. concerns about how to prevent Chinese steel from entering the United States duty-free from Canada and Mexico. The Canadian official said Ottawa was willing to work with U.S. authorities to block such imports, but added that Washington had not yet presented convincing evidence that steel was being trans-shipped through Canada.
Canada and Mexico have retaliated against the U.S. steel tariffs with their own tariffs on U.S. beef, pork and other agricultural products, raising the ire of farm-state lawmakers.
Several Republican U.S. senators are combining forces on legislation to limit Trump’s ability to impose tariffs under Section 232 of the Cold War-era Trade Expansion Act of 1962.
Senate Finance Committee Chairman Chuck Grassley, who represents the farming state of Iowa, on Tuesday said he would lead the effort aimed at restoring Congress’ constitutional authority over trade matters. His plan calls for Section 232 tariffs to be limited to a defined period of time unless extended by Congress.
United Steelworkers President Leo Gerard told the steel caucus lawmakers that Canada should be exempted from the Section 232 tariffs because of the high level of cross-border integration and common ownership in the industry. His union represents about 9,000 Canadian steel workers and 50,000 at U.S. mills.
But Representative Mike Bost, a Republican whose district saw U.S. Steel restart two blast furnaces and rehire 800 workers at its Granite City, Illinois mill last year, made clear that he was focused on rebuilding steelmaking capacity in the United States, not Canada.
“I want to let you know that the focus of this committee should be our U.S. workers,” Bost said.
The steel executives also called on the lawmakers to boost U.S. demand for steel by passing a significant infrastructure investment package this year.
“Please let this year be the time to stop talking and start investing,” said ArcelorMittal USA President John Brett.
(Reporting by David Lawder and Alexandra Alper, Editing by Rosalba O’Brien)