Steel Industry Claims Tariffs are Working

Thomas J. Gibson, president and CEO of the American Iron and Steel Institute (AISI), recently reiterated the Institute’s support of steel tariffs and opposition to congressional legislation (Senate/House) introduced in February to eliminate those tariffs. Gibson warned that The Bicameral Congressional Trade Authority Act,” would prematurely terminate the tariffs.

According to Gibson, the Administration’s trade actions, tax and regulatory reform policies, in addition to the strong economic climate enabled by those policies, have allowed the American steel industry to begin to recover after more than a decade of low capacity utilization and weaker earnings.

Low or zero tariffs on U.S. steel imports have led to repeated surges in imports fueled by global steel overcapacity. Capacity utilization at existing mills has increased in recent months to over 80 percent — levels not seen in the last ten years. Some shuttered plants are being re-opened, laid-off workers are going back to work and companies are making investments in new steel production facilities.

“But this recent progress will disappear, and our steel industry will again suffer dire circumstances, if the tariffs are prematurely terminated. The massive overcapacity in steel still exists globally. And China in particular is producing steel at record levels — exceeding one billion net tons in 2018. This means there is plenty of excess supply that will flood into our market but for the continuation of the Section 232 tariffs. The Section 232 trade remedy is critical to ensuring steel remains a vital asset for our national and economic security.” Gibson stated.

To underscore its point, the AISI reported that for the month of December 2018, U.S. steel mills shipped 7,804,093 net tons of steel. This is a 6.5 percent increase from the 7,328,247 net tons shipped in December 2017. Shipments for 2018 totaled 95,279,566 net tons, a 4.8 percent increase vs. 2017 full year shipments of 90,886,717 net tons.

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