Steel Products Prices North America

Steel Imports: A Boon or Threat to the Economy

May 29, 2014

Steel imports to the U.S. totaled 3.7 million net tons according to preliminary data from the US Census Bureau but the reaction to this data depends on one’s point of view. The American Institute for International Steel (AIIS) and the American Iron and Steel Institute (AISI) both came out with reports on April imports, but when comparing them, it is apparent the focus of the two organizations differs.

AIIS, a supporter of steel trade to the US, noted that Canada was the highest exporter of steel to the US followed by the EU, then Russia and China (both up more than 250 percent from April 2013). AIIS also noted that although steel imports surged in April, the year to date total is well below the first four months of 2013—a “stumble” for the first quarter as headlined in the article.

AISI, on the other hand, focuses on finished steel products and breaking import data down to a variety of product categories. This ties in well with its advocacy for stringent trade regulations for foreign steel and its report illustrates which products are currently flooding the US market.

AIIS wrote the following in their May 29 imports release:

“Steel imports have been in the news a lot lately, with lawmakers advocating for protectionist actions by the Commerce Department and a well-publicized report claiming that steel from other countries is costing American jobs. The April increases may encourage more such declamations about the supposed negative effects of free trade. Steel imports, though, play a critical role in the United States. By diversifying its sources of steel, the U.S. is able to weather disruptions in domestic production, as have occurred at some mills in recent months, without the economy feeling a major impact. In addition, the ability to import quality steel at a lower price than is available domestically keeps costs down in multiple sectors, encouraging investment and promoting consumer spending. In short, when construction and automobiles cost less, the entire U.S. economy benefits.”

The AISI stance is almost diametric as evidenced by a recent statement by President and CEO Thomas J. Gibson on a new report on steel imports by the Economic Policy Institute:

“This issue is the number one concern of our members – the steelmaking companies of North America. We applaud Senators Brown and Sessions, and the research done by EPI, which confirms that the steel industry continues to face significant trade and competitive challenges from foreign government trade-distorting policies and practices; and, that a more effective U.S. trade policy is needed to level the playing field, and preserve and strengthen our nation’s manufacturing base.

“As noted in the report released today, it is critical that policymakers work to ensure that the trade laws are strictly enforced. We will continue to advocate for the government to go after unfair trade practices whenever and wherever they occur, and for policy initiatives that address the state-controlled and subsidized foreign steel industries that are fueling this surge that is adversely impacting our workers and our industry.”

Each steel organization makes strong arguments for its policies, one more protectionist and one more global minded, but both concerned at core for the US economy. SMU invites our readers to comment on where you and your company stand on the issue of steel imports—good for the US or harmful?