STEEL CONSUMERS: STEEL INDUSTRY CONSOLIDATION DOES NOT REQUIRE IMPORT RELIEF
Washington, DC - Jon Jenson, Chairman of the Consuming Industries Trade Action Coalition (CITAC), said today the announcement this week by U.S. integrated steelmakers that they are discussing a possible consolidation is good news, but the industry's plea for import restrictions is a demand "that is entirely without merit and will hurt the U.S. economy."
"Now that government and the industry have both acknowledged that consolidation is necessary for U.S. integrated producers to be healthy and competitive, and that legacy cost relief would make that rationalization possible, steel import restraints should be off the table," said Jenson. "We're not willing - in fact, it's financially impossible for many of my members - to pay higher prices for steel to help these guys restructure."
The ITC will vote on Friday, December 7 on remedy recommendations which could include tariffs, quotas, tariff-rate quotas or other assistance to U.S. steel producers. The domestic industry has asked for 40-50 percent tariffs on close to 80 percent of imported steel.
"The real shame is that the injury finding and the potential import restraints to follow have the power to hurt millions more Americans than they could possibly help. Restrictions will cause shortages and increase cost, which could either drive U.S. steel users out of business or offshore. We're talking about 12.8 million American workers in downstream industries, many of whom are at risk. In difficult economic times like these, when the airlines, automakers and virtually all sectors are laying off workers, it makes no sense to put more Americans out of work for the sake of a few companies. Integrated steel producers are not exempt from the laws of the marketplace," stated Jenson.
"An important point that's often overlooked in this debate is that the steel producers who have filed for Chapter 11 do not represent the entire industry. The U.S. has healthy, profitable mini-mills that are gaining a greater share of the market. They don't need artificial restrictions to boost their profits and the integrated producers do not have a case for import relief either," concluded Jenson.
A CITAC study published earlier this year, and available on the CITAC website, revealed that steel quotas - a possible result of the Section 201 investigation - could cost American consumers billions of dollars annually or the loss of three jobs in steel-consuming sectors for every steel job preserved.
CITAC is a coalition of American companies and trade associations that support open and expanding international trade in the interests of the United States, both economically and for national security.