SMU Spotlight: AISI president Kevin Dempsey on carbon tariffs and Congress

How did you get into the steel industry?

My first interaction with the steel industry was when I worked for a US senator on Capitol Hill. This was in the early 1990s when the agreement to create the WTO and the original NAFTA were being negotiated. I engaged with a lot of people in the steel industry on how to make sure that we kept our trade laws strong. I had little background in steel and the trade laws, so I spent a lot of time speaking with people in the steel industry about the issues they faced. In many ways, these were the same issues that we face today with government subsidies, foreign government interventions, and how trade laws work to address those challenges. I went on to work at a law firm with many clients who were in the steel industry. Then joined the AISI in 2009.

It sounds like you found the industry unintentionally like many of us.

Yes. Originally, when I was on Capitol Hill, I did mostly environmental and energy work. I worked on the cap-and-trade scheme created for acid rain. The combination of environmental work and the trade work has really come full circle. They all connect in all the work on decarbonization, carbon tariffs – bringing all the things I worked on, together. You can see the connections.

I’m sure it was a great experience to be up close when the WTO and NAFTA negotiations were happening!

The USTR allowed some of the congressional staff to go to Geneva and sit in some of the meetings with the negotiators. I had a front-row seat at how the negotiators were trying to balance and work with different industries. It was really exciting and a great opportunity to learn a great deal at a very young age. And we were in a much better position to help craft the legislation that was implemented the next year.

Do you feel that the experience you had as a staffer enabled you to mentor others in the industry?

Absolutely. A critical part of my job is to mentor people to make sure they have an appreciation for the key issues and what is important for our industry. Then they can understand that at the beginning of their career. That helps shape how they grow and develop into the next generation of leaders. It’s a central role that we need to play.

What’s been your favorite project that you’ve worked on throughout the years?

I’d say it’s the question of how to develop tariffs that address the carbon intensity issues. When I was at a law firm, before I joined AISI, I did some work on the side thinking about the big issues of the future. I’ve been interested in ensuring that trade policy creates the right incentives to address trade and climate change in a way that doesn’t wipe out the domestic industry. It’s one of the big issues we’re focusing on and it requires flexibility. Climate change wasn’t really at the forefront of people’s mind when the WTO was created. So, when people say that carbon tariffs don’t fit into WTO rules, it’s because the WTO was written in a different era. I think the WTO will need to be updated to deal with the big challenges, and climate is at the heart of that.

Can you give a general overview of what AISI does?

AISI, fundamentally, is in the communications business. We seek to communicate the interests and the concerns of the steel industry to government officials and the broader public. We want to educate those individuals on the key issues, how the steel industry works, and how policies affect our industry.

What does the future look like for the industry?

I think the next big thing is trying to develop carbon tariffs. It’s an exciting prospect. The ITC has put a lot of effort into understanding the information on how the industry is trying to reduce carbon emissions. The level of engagement and the interest from the ITC has been great. It’s going to be an important basis to develop the carbon trade initiative. I think we will be the first industry to have a carbon tariff scheme established.