Nucor CEO makes case for tariffs on imported steel

Leaders of companies who have been among the most outspoken in objecting to unfair competition from foreign steel and aluminum exporters were at the meeting, including Nucor Corp., which had two executives there.

What happens with steel is important to the economy of northeast Indiana. Greater Fort Wayne Business Weekly’s 2018 list of largest manufacturers in the region included Steel Dynamics Inc., with 825 northeast Indiana employees, and Nucor with 738 in the region.

Within northeast Indiana, Nucor has Vulcraft Indiana and Nucor Fastener Indiana operations in St. Joe, Harris Rebar operations in Auburn and Nucor Building Systems Indiana operations in Waterloo.

Northeast Indiana locations of Steel Dynamics include its local headquarters as well as corporate offices for its subsidiaries New Millennium Corp., OmniSource Corp. and Iron Dynamics Inc. in Fort Wayne; a division of its Flat Roll Group in Butler and its Structural and Rail Division in Columbia City.

Following opening remarks by the president, Trump began his listening session with metals industry executives by inviting comments from Dave Burritt, president and chief executive officer of United States Steel Corp. He then turned to John Ferriola, chairman, president, and CEO of Nucor, according to a partial transcript of the meeting, posted to www.whitehouse.gov.

“We believe very strongly that it’s time for decisive and meaningful action to stem the flow of illegally traded imports into this country,” Ferriola said. "And we are counting on the administration to fulfill the promises that were made and to give us that level playing field to compete. We are confident — we have 25,000 teammates that — if they are given a level playing field, they will out-compete any company and any country in the world. All we want is a level playing field. And, today, we’re not getting that. The cheating is phenomenal. The amount of circumvention that takes place is incredible."

From Ferriola’s perspective, this cheating increased after foreign steelmakers learned the U.S. Department of Commerce would investigate its impact on national security under Section 232 of the Trade Expansion Act of 1962, as amended.

“Just look at last year,” Ferriola said. “Last year, Mr. President, the imports increased 15 percent in 2017, over 2016. Once we initiated the beginning of the 232, other countries saw this as the need to get in before it went into effect. So what we’re asking for today is fast action and action that will last.”

A summary of the 232 investigation report released Feb. 16 included a recommendation that the president consider a global tariff of at least 24 percent on all steel imports from all countries.

It also recommended a tariff of at least 53 percent on the following dozen countries: Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam.

It also recommended a quota, which would not allow U.S. steel imports from any country to exceed 63 percent of the 2017 level for that country.

The recommendations would help increase U.S. steel production to 80 percent of capacity, which Commerce said was necessary for the industry’s long-term viability. To reach that level, the department said the industry would need to come up from operating at 73 percent of capacity.

Trump had made it clear at the outset of the public part of the listening session that he was on the same page with Ferriola and other industry executives who would be speaking there.

U.S. steelmakers “used to be a lot bigger, but they’re going to be a lot bigger again,” he said. “They’ve been very unfairly treated by bad policy, by bad trade deals, by other countries. They’ve been horribly treated by other countries, and they have not been properly represented. More importantly, because of that, workers in our country have not been properly represented. So we’re going to build our steel industry back and we’re going to build our aluminum industry back.”

Following Ferriola’s comments, Trump said the United States had imposed a 30-percent tariff in recent months on washing-machine imports, which has resulted in the start of construction on domestic washing-machine plants.

A tariff his administration imposed on solar-panel imports improved the financial health of a couple of U.S. solar panel companies, which he said are talking about reopening at least seven domestic solar-panel plants that had closed.

“Pretty much all of you will immediately be expanding if we give you that level playing field, if we give you that help,” Trump said. "And you’re going to hire more workers, and your workers are going to be very happy."

He called the previous policies and trade deals "disgraceful," emphasizing the role steel and aluminum play in the U.S.

“We need it even for defense,” Trump said. “We’ll be signing (the tariffs) in. And you will have protection for the first time in a long while, and you’re going to regrow your industries.”

The American Iron and Steel Institute responded to Business Weekly's questions about the meeting with a statement supporting the position the president announced at the meeting and noting steel imports into the United States surged 15 percent last year from 2016, and had captured 27 percent of the U.S. market.

“About one fourth of domestic-steel capacity today is not being utilized,” Thomas Gibson, the institute’s president and CEO, said in the statement. “This is fueled by the massive excess steel capacity in the world today, which is more than eight times larger than the annual output of all U.S. steel producers, and driven by subsidies and other interventionist foreign government policies.”

That translates into idled plants and the loss of thousands of jobs.

"We are pleased that the president is addressing this issue and look forward to the formal announcement next week,” he added.

The Fort Wayne-based steelmaker, Steel Dynamics Inc., was not on a CNBC list of companies attending the meeting and could not immediately be reached for comment on it.