U.S. Steel Giants Warn Foreign Imports Imperil National Security
(Bloomberg) -- Chief executive officers of America’s largest steelmakers said global overcapacity of the metal is at crisis levels as they urged the U.S. to determine that cheap steel imports are a threat to national security.
Speaking at a public hearing into the impact of steel imports, CEOs including Nucor Corp.’s John Ferriola and AK Steel Holding Corp.’s Roger Newport said the U.S. must build up defenses against a flood of production from China and other nations that offer state support to the industry. The U.S. must think outside the traditional remedies in combating foreign governments’ “ruthless” focus on winning control of the market, David Rintoul, who heads U.S. Steel Corp.’s tubular business, said at the hearing in Washington on Wednesday.
The meeting is part of the Commerce Department’s Section 232 investigation of the effects imported steel have on national security that Commerce Secretary Wilbur Ross initiated last month. Section 232 is a seldom used part of the 55-year-old Trade Expansion Act that’s resulted in more than a dozen investigations since the 1980s into areas like machine tools and circuit ceramic packaging developed by the defense department.
China’s steel exports to the U.S. have declined by more than 67 percent since September 2015 and the U.S. has enough domestic supply to meet its own needs, Yu Gu, first secretary at China’s Ministry of Commerce, said at the hearing.
The testimonies come as American steel producers are benefiting from a raft of trade cases last year that helped boost many companies to their biggest gains in at least a decade. Nucor, the largest domestic steelmaker, rose 48 percent, the most since 2006, while U.S. Steel surged four-fold, allowing the iconic steelmaker that in 2015 was facing debt troubles to sell shares to generate financial flexibility and use for capital expenditures.
Ross said the department expected to conclude its investigation by the end of June, before the 270-day deadline that typically is set for a Section 232 probe. Commerce has also opened a similar investigation into aluminum imports.
The U.S. is nearing a point that it will depend on other nations for vital steel imports, which “is a very dangerous proposition,” Barbara Smith, chief operating officer at Commercial Metals Co., said at Wednesday’s hearing.