Stopping the flood of steel imports is crucial for national security

Nearly every military platform and weapon system in our nation’s arsenal is dependent on steel produced in America; much of our nation’s critical infrastructure relies heavily on steel. But the domestic steel industry is under attack from repeated surges in imports of dumped and subsidized steel from numerous countries around the world.

Several trade associations claiming to represent a number of American industries that buy steel recently wrote a letter to the president opposing any imposition of restraints on imports of steel for national security reasons (the administration’s Section 232 investigation), as reported in the Post-Gazette on Sept. 11 (“Not So Fast: Curbs on Steel Imports Would Harm Economy, Industry Leaders Tell White House”). These associations state that they support a strong national defense and a strong domestic steel industry, yet demand unlimited access to cheap imported steel. They cannot have it both ways.

There is more than 700 million metric tons of excess steel capacity in the world today — more than eight times greater than the annual output of all American steel producers. More than half of this global overcapacity is in China alone. This massive steel glut is driven by subsidies and other interventionist foreign government policies. It has led to high levels of dumped and subsidized imports in the U.S. market, causing severe economic harm and significant job losses.

U.S. Steel has been forced to reduce its tubular products workforce by more than two-thirds, idle 50 percent of its tubular mills and abandon about 40 percent of its Oil Country Tubular Goods (OCTG) products — those products that make it possible for energy companies to explore and bring to market the oil and gas America needs to guard its security. Today, imports make up approximately 50 percent of the OCTG market. Foreign suppliers have made it their mission to steal much of this market from U.S. companies, presenting a tremendous loss of domestic capacity, which endangers America’s national security.

Steel import levels show no signs of slowing down in 2017. Foreign imports are up 25 percent in the first half of 2017 compared to the first half of 2016, with the import market share reaching 29 percent in July. As a result, approximately one quarter of our domestic steel capacity today is not being utilized. That translates to idled plants and thousands of unemployed workers.

The American steel industry has relied on our traditional trade laws to address the impact of these unfairly traded imports, and these laws have provided some temporary relief. However, every time we obtain relief on dumped and subsidized imports from one set of countries, imports surge in from other countries and do further damage to our industry. This trend is simply unsustainable, both for our industry and for our country.

If the flood of imports drives our steel producers out of business, the United States will become dangerously dependent on unreliable foreign sources of supply for the steel that is critical to our national defense, including our energy security. Our military could never be sure if orders would be processed to the needed specifications and in a timely manner. Industries in the United States that buy steel would be in the same boat. Our national security and our economic future as a nation would both be at risk.

That is why we believe action to preserve our steel industry is very much needed today, and why every industry that buys steel should also support such action by the president. As Benjamin Franklin once said, “We must, indeed, all hang together, or most assuredly we shall all hang separately.”

Thomas J. Gibson is president and CEO of the American Iron and Steel Institute, a trade association in Washington, D.C., representing the steel industry.

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