CHICAGO | Four million people whose livelihoods depend on the steel industry are suffering because of a tsunami of imports that has reached a record 34 percent market share, steel executives said.
Once-busy plants sit idle. Job losses have mounted. U.S. Steel Corp., the nation’s second largest steelmaker, alone has issued layoff warnings to around 9,000 workers, including those who manned the idled East Chicago Tin and the permanently shuttered Gary Works coke plant.
Steel industry CEOs said at the American Iron and Steel Institute annual meeting in the Loop that more layoffs could be prevented if the federal government just enforced existing trade laws at a time when imports are twice as high as normal. They also said they’re reviewing trade cases that would result in tariffs, and called for more protections, such as against currency manipulation that makes foreign imports cheaper despite added shipping costs.
Former Republican presidential candidate Mitt Romney, Illinois Gov. Bruce Rauner, former M16 Chief Sir John Scarlett and former Gen. Stanley McChrystal — the commander of U.S. forces in Afghanistan, all spoke at the four-day industry conference. Steel executives heard about leadership best practices, cyber threats, and how the global middle class is projected to double in the next 10 years. But talk turned quickly to the imports that are undercutting the domestic steel industry.
“To not have a domestic steel industry, we would be in a horrible position,” McChrystal said. “A superpower like us would be in a terrible position.”
Steel imports have always been around, but they normally account for 15 percent to 18 percent of the total market, American Iron and Steel Institute Chairman Chuck Schmitt said.
Last year, finished steel imports shot up 38 percent to capture 28 percent of the market share, beating the record of 26 percent that was previously set in 2006 and 1998, just before most of the domestic steelmakers went bankrupt.
“This is an issue of American jobs and American livelihoods,” ArcelorMittal North America Flat Rolled CEO Jim Baske said.
“We’re asking for fair trade. With the business decisions we have had to make, on Sept. 3, almost eight months ago, hot-rolled ran $676 a ton. Now it’s $440 a ton. In any industry, a 35 percent to 36 percent reduction in that period of time would put pressure on the business. Fair trade will correct it.”
The United States needs to do a better job of enforcing existing laws against steel dumping, where metal products are imported at less than what it costs to produce, Nucor President and CEO John Ferriola said. In one case, a tariff was so low that Turkey doubled its imports to America after it was imposed.
“It’s easy to avoid layoffs,” he said. “We have a strong industry. If we would enforce current laws and give the industry a level playing field, it would compete successfully. The American worker is the most efficient worker in the world.”
The American steel industry has many natural advantages, including cheap energy, raw materials; it doesn’t need to import.
Shipping steel to America can add $20 to $30 more per ton, and it makes no economic sense that imports are cheaper, Ferriola said.
“It makes no sense the United States, the low-cost producer in the world, would be operating at 65 percent to 70 percent capacity,” he said. “Enforcing trade laws would prevent layoffs. People are losing jobs. Families are getting hurt and damaged. It’s not that hard. Just enforce the rules. Give us a level playing field.”<