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The American Iron and Steel Institute said that a new report by the Economic Policy Institute “Why Global Steel Surpluses Warrant U.S. Section 232 Import Measures reaffirms that the steel tariffs put in place in 2018 have been effective in facilitating significant investments in new and upgraded mills, creating thousands of new jobs and protecting US national security and that continued global steel overcapacity fuelled by foreign government subsidies and other trade-distorting policies and practices threatens additional harm to the American steel industry absent continuation of the tariffs.
AISI President & CEO Mr Kevin Dempsey said “This study makes it abundantly clear that the steel tariffs are working. We commend the economic analysis conducted by EPI which confirms that, due largely to the Section 232 steel tariffs, the American steel industry has been able to invest nearly 16 billion dollars to build, upgrade or expand steel facilities while also enabling the industry to effectively restructure. While these investments have created 3,200 new jobs, the tariffs kept many more workers on the job as the industry was threatened by significant challenges from foreign government trade-distorting policies and practices that have created substantial steel overcapacity worldwide. We are pleased that the report also recognizes that those challenges still exist and that keeping the steel tariffs in place is critical until a permanent solution to the chronic problem of excess global steel production capacity is achieved. We urge that opinion leaders, policymakers and steel partners all across the US take a look at this important new report and work to ensure that steel tariffs remain in place.”
EPI Report highlights “A strong domestic steel industry is critical to US national defense, to the health of America’s critical infrastructure, and to the competitiveness of many domestic manufacturing industries. Beyond supplying high quality steel in sufficient quantities to meet national defense needs, the US steel industry also plays a critical role in supporting the welfare of other industries essential to the broader health and operation of the economy and government. For decades, chronic global steel supply gluts have undermined the US steel industry with surging imports to US markets undercutting prices, domestic production, employment, and investments. This oversupply jeopardizes the fundamental health of the US steel industry, one of the cleanest and most energy-efficient steel industries globally. Global steel surpluses are the result of chronic global excess steelmaking capacity in major exporting countries, including China, India, Brazil, Korea, Turkey, the EU, and other nations, much of it from state-owned and state-supported enterprises that are heavy polluters. In 2018, the United States determined that steel imports posed significant risks to national security and imposed a 25% tariff and other trade remedies on certain steel products under Section 232 of the Trade Expansion Act of 1962. This report examines the impacts of these measures on domestic steel production and consuming industries, and it recommends that these measures be retained until a multilateral solution to the problem of global excess steel capacity can be achieved.”
Key conclusions of this report include:
The US steel industry is a vital component of the American economy
Global steel markets are plagued by chronic excess capacity
The economic picture for US steel producers brightened considerably beginning in 2018 until the pandemic began
Administrations dating back to the mid-20th century have worked to mitigate the effects on US steel producers of unfair global practices
China has massively and rapidly expanded its steel production capacity
Countries across several continents followed in China’s footsteps, developing more excess capacity
Rapid expansion elsewhere comes with falling domestic production
Section 232 measures delivered near-immediate benefits
Section 232 measures have had no meaningful real-world impact on the prices of steel consuming products (such as motor vehicles)
Widespread exclusions to Section 232 measures mitigate positive economic impacts
Jobs, national security, and the steel industry itself are at risk if Section 232 measures are discontinued or weakened in the post-pandemic economy
Relaxing or reversing Section 232 measures also would provide an advantage for low priced, high carbon polluting producers overseas.