Drumbeat continues for steel tariffs

Although several key economic indicators are positive, America’s steel industry is closing plants and shedding jobs,and defenders of the sector point to imported steel as the culprit. Steel producers in China in particular are being blamed for churning out steel they can only sell at a discount.

After U.S. and Chinese officials met to discuss the situation in late November, Thomas J. Gibson, president and CEO of the Washington-based American Iron and Steel Institute (AISI), said “Overcapacity in China’s steel industry is a major factor fueling the import surge currently injuring the U.S. industry.”

One result of the meeting, according to Gibson, was that “the official U.S. government fact sheet on the meeting recognized that China’s exports of steel and aluminum are large and growing, and are the central cause of a glut of supply on the global market.”

Figures collected by the U.S. Census Bureau  and analyzed by AISI show an increase in imported steel into the U.S. in October 2015. The U.S. imported a total of 2.99 million tons of finished and semifinished steel in October, including 2.26 million tons of finished steel—a figure that is 5.4 percent higher than what was imported in September 2015.

Year to date through the first 10 months of 2015, total steel imports are down 8 percent compared with the same period in 2014.

One product segment where imports spiked in October was reinforcing bar (rebar), which saw import levels nearly double from 112,700 tons in September to 222,100 tons in October. Rebar imports are up 47 percent year to date through the first 10 months of 2015.

A Congressional representative from Minnesota is urging  Congress and President Obama to take action immediately with prohibitive tariffs on many forms of steel. An article in the Minneapolis Star-Tribune says Democratic Rep. Rick Nolan is not optimistic that Congress will act quickly, so he is urging President Obama to issue an executive order to propose a prohibitively high tariff, similar to what President George W. Bush did in 2002.

That action was eventually struck down by the U.S. International Trade Commission one year later, but Nolan is quoted as saying, “If a couple of big time free-traders like [President Ronald] Reagan and Bush can take that kind of action, there is no reason President Obama can’t do the same thing. We need to do it right now before it’s too late.”