President Trump’s tariff on steel is working for Kentucky and the nation, an Op-Ed by Thomas GibsonApril 26, 2019
The American steel industry directly and indirectly supports more than 2 million jobs. The economic engine of iron and steel is responsible for nearly 40,000 jobs in Kentucky, paying a total of $2.5 billion in wages and salaries annually, while generating $11.3 billion in industry output and $1.1 billion in federal, state and local taxes.
However, dumped and subsidized steel imports have damaged the health of the industry, causing steel plants across the country to close and production of certain steel products to move offshore.
In response to the steel crisis that has been more than a decade in the making, and after an extensive nine-month investigation by the Department of Commerce, the president last year determined under Section 232 of the Trade Expansion Act that imports of steel products threatened to impair our national security. He imposed a 25% tariff on steel imports.
This necessary action has allowed the American steel industry to begin to recover. Capacity utilization at existing mills has increased in recent months to more than 80% — levels not seen in the last 10 years. Steel shipments were 5% higher in 2018 than 2017. Steel imports have decreased 50% since the steel tariffs took effect in April 2018 through December 2018. And the share of the steel market taken by imports has fallen from 29% last April to 19% percent in December.
The Section 232 trade remedy has also resulted in the reopening of some shuttered plants, the hiring back of laid-off workers and investments in new steel production facilities — like the recent announcement by Nucor Corporation to invest $1.35 billion to build a new plate mill along the Ohio River in Meade County, creating 400 jobs and expanding its mill near Ghent, creating 70 jobs.
While conditions in the American steel industry have improved recently due to the administration’s trade actions and tax and regulatory reform policies, there is still more work to be done.
Thomas J. Gibson is president and CEO of the American Iron and Steel Institute in Washington, D.C.
There are nearly 500 million net tons of excess steel capacity in the world today. China’s record steel production exceeded 1 billion net tons in 2018 — more than 10 times all of the American steel production. This, along with China’s high level of steel exports, continues to destabilize the global industry and threaten American steelmakers. If the Section 232 tariffs were prematurely removed, this excess production could easily flood into the United States, injuring the steel industry once again.
The Section 232 trade remedy is critical to ensuring steel remains a vital asset for our national and economic security, and must remain in place as steel continues to be the backbone of American manufacturing.
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