Are the Once Golden Geese Dying?
The Wall Street Journal
To The Editor:
Mr. Usher describes steel market "realities and consequences" as he sees them. But the restructuring plan he and other steel executives advocate does not consider the consequences their plan would have on the rest of the U.S. economy and especially on their own customers, the steel -using industries of America.
Mr. Usher argues that if no protection is granted on steel imports , "America might lose" this industry, with serious consequences for national security and the economy. With a competitive and thriving mini-mill sector and several viable integrated producers (including U.S. Steel ), there is no danger of the U.S. steel industry disappearing. In addition, a recent Department of Commerce investigation made it clear that there is no risk to national security from current steel market conditions. On the other hand, import restrictions threaten to harm more than 100,000 domestic steel -using businesses and their 12.8 million employees, not to mention their families and communities. If tariffs on steel are imposed, every single state in the U.S. would lose more jobs than could be maintained through protectionism.
Nor can we agree with Mr. Usher that U.S. trade laws should be more energetically enforced; 50% of all current steel imports to the U.S. are covered by antidumping or countervailing duty orders. True market forces have not been allowed to function in steel trade for some time and the U.S. steel industry should acknowledge that it has had protection for most of the last 30 years. The industry will never be competitive if it does not compete.
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. It is financially impossible for most steel -using companies, which are small, to pay higher prices for steel for the sake of a few integrated producers. Protection will drive many steel using businesses off shore, and many others into bankruptcy.
GR Spring & Stamping