Port of Tampa Steel Conference Debates Foreign Steel Imports & Regulation

He pointed to offending countries such as South Korea which lost a dumping case presented against it on oil country tubular goods (OCTG). Even so, they have continued to ship steel and are at the highest level in 5 years. January OCTG shipments have surged despite the dumping ruling. “Trade cases,” he said, “are seen as the last option…” for the domestic steel mills.

This is how the second panel began their discussion entitled, “Regulatory / Trade Crossfire” with David Phelps, former president of the American Institute for International Steel (AIIS) as the moderator. The panelist consisted of Phillip Bell, Richard Chriss who succeeded Mr. Phelps at the AIIS, trade attorney Lewis Leibowitz who spoke at our 4th Steel Summit Conference this past year and attorney Alan Price whose clients include Nucor, Tenaris and others.

Lewis Leibowitz pointed out that the steel industry employs about 150,000 workers. At the same time there greater steel using community is made up of about 6,000,000 workers.

He pointed out that there is nothing “illegal” about importing steel. “It is not an issue of morality,” he told the audience.

“There is a global sense that the U.S. law is unfair to global exporters and U.S. consumers… The U.S. does not produce enough steel to satisfy demand,” remarked Leibowitz.

During the Question and Answer period Leibowitz pointed out that the steel industry is a barometer of the great health of the U.S. economy. “When imports go up the economy is strong. Imports chase prosperity.”

Alan Price obviously had a different view on the subject. He pointed out that there is a massive global excess of capacity of about 600 million tons of which only half is in China.  

Price pointed out that there have been no new anti-dumping orders between 2002 and 2013. Over the past year we have had a number of new orders including rebar, wire rod and oil country tubular goods (OCTG).

The U.S. law is “fair” he told the audience, and he used an example from Turkey where two shiploads of rebar were received and the Turkish government immediately raised duties to 30 percent. “They solved their problem very easily,” he said.

He went on to say, “Trade laws are important market correction mechanisms.” He told the audience that the rest of the world has a one way dumping system while the U.S. has a balanced system.

During the Question & Answer period Price told the audience that there as a 7 million ton increase in the amount of steel used in the United States during 2014 and 5 million of those tons went to offshore producers. He said, “It is critical the U.S. industry get a larger increase of the improvement.”

Richard Chriss of the AIIS spoke about the 3.3 years that must pass before an importer knows the final duty liability they face on a particular product. Phillip Bell responded to this by saying, “Retrospection prevents them [importers] from gaming the system.” Alan Price also pointed out that the U.S. is not the only country with a retrospective system.

Chriss pointed out that he believes the retrospective system will ultimately be removed. He told the group that the General Accounting Office (GAO) was looking at the retrospective system with the understanding that it needs to be reworked.

Chriss pointed out during the Q & A session that the domestic producers are themselves large importers of foreign steel. “Many of the domestic producers use an incredible amount of inputs [slabs or other semi-finished products].”

There was also a discussion regarding currency manipulation prompted by comments from Keith Busse out of the audience. He challenged the group by saying that the U.S. steel industry was the most efficient in the world and, with most commodities being purchased in U.S. dollars he wondered how foreign steel can compete if it wasn’t for currency manipulation of subsidies.

Chriss pointed out that the U.S. government buying of bonds and other policies which impact the value of the U.S. dollar. He advised against using the currency manipulation argument as a basis for fending off foreign imports. “We might run the risk of encouraging litigation of currency issues at the WTO and elsewhere,” he told the audience.