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article imageAs US mulls action on steel, foreign producers urge caution

By AFP     May 24, 2017 in Business

Foreign steel producers on Wednesday called for prudence as the Trump administration considers possible actions to shield domestic companies from unfair imports on national security grounds.

The remarks came at a public hearing as part of a Commerce Department investigation into the effects steel imports on US national security. The adminstration is similarly scrutinizing aluminum imports.

US producers have been cheered in recent weeks by the Trump administration's new stance, hoping it could bring more relief to struggling industries than scores of scattershot anti-dumping cases.

Domestic producers on Wednesday said unfair competition was undermining the US industrial base in ways that could jeopardize energy production and the manufacture of weapons, armor and vehicles.

Still, some analysts say technological advances and increased productivity, more than trade, have accounted for much of the industry's job losses.

John Ferriola, president of Nucor Corp, said his company's steel helped produce US Humvee light military trucks, Abrams battle tanks, Bradley fighting vehicles, the Patriot surface-to-air missile system and the plating used for armored vehicles, Navy aircraft carriers and destroyers.

This required "continual investment" in expertise, research, development and testing to meet exacting US Navy standards, he said.

"Unfortunately, global overcapacity and unfairly traded imports threaten our ability to invest," he told the hearing. "Production overcapacity in the steel industry has reached crisis levels."

David Rintoul, head of the tubular business segment at US Steel Corp, said foreign producers in South Korea and China had "made it their mission" to capture the US market for certain steel products used in oil and gas production and exploration, using subsidies and other unfair support.

- Trade barriers questioned -

However, foreign producers told the hearing that new trade barriers could be both unnecessary and counter-productive.

Karl Tachelet, head of international affairs at Eurofer, an association of European Union steel producers, said his organization had also been fighting unfair practices and global oversupply.

"We do not believe that restrictive, unilateral action based on national security will alow for lasting solutions we all need," said Tachelet, calling for the investigation to focus on "specific uses" directly tied to national security.

"What do tin mill products used to make cans for food and beverages have to do with national security?" asked Tachelet,

"How real is the risk that one day the US will not be able to produce enough rebar or sections for construction and infrastructure given its massive scrap availability?"

- China, Russia, Ukraine -

Yu Gu, a representative of the Chinese Commerce Ministry, said the US Defense Department had found that US defense needs for steel were low and cited research that concluded that just three percent of domestic shipments served national defense purposes.

"Clearly, current and projected US national defense demand for steel can be readily satisfied by domestic production," he said.

The deputy head of Russia's US trade mission, Alexander Zhmykhov, said his country's steel exports were already subject to heavy anti-dumping restrictions and duties in the US, which had seen certain imports tumble.

"Russian imports have already been so drastically limited by the measures enforced that further limitations would be excessive," said Zhmykhov.

Ukraine's representative said his country's steel industry was under attack, suffering seizure and expropriation by foreign-backed separatists in eastern Ukraine, but was also crucial to that country's stability and security cooperation with the US.

A 2001 investigation showed that the US was not vulnerable to imports of iron or and semi-finished steel, said Vitalii Tarasiuk, minister-counsellor at the Ukrainian embassy.

"We are confident that evidence in this case will likewise show that steel imports do not threaten US national security," said Tarasiuk.

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