good morning again we'll be getting
underway shortly so thank you if just
one quick housekeeping detail restrooms
and water fountain are to my right and
hook another right if you need to step
out for for a quick break and there will
be a break in the program later which
the the chairs will let you know about
I'm mark
[Music]
[Music]
[Applause]
good morning so for those who you may
not know me my name is Dan Hill
I'm the acting under secretary for the
Bureau of Industry and security and I
want to welcome you to our public
hearing on a 232 investigation on steel
joining us today is a panel of experts
from across the government and I'd like
to introduce them first my immediate
left closest to me then working our way
down the table is Matt Orman our acting
assistant secretary for export
administration Peter claisen who is with
our office of chief counsel Erika
Maynard who is the person who has put
all this together and deserves our
thanks for doing a great job and good
next to her is julie al saud ye with the
ITA julie is our steel expert next to
her is Liz Clark an economist from ITA
both of them have been advising them
advising us on a regular basis as we
proceed with the investigation
and then we have Beth Sanjana from the
US Geological Survey Nicholas Carr
vanadis from Department of Defense and
then eric bana from the Defense
Logistics Society Department of Defense
Defense Logistics Agency I'd like to
welcome everybody today's public hearing
is now my pleasure and honor to
introduce our Secretary of Commerce
Secretary Ross is a true friend of the
Bureau of Industry and security
he has been tasked by the President of
the United States to be the voice of
business in the Trump administration
daily he ensures that US entrepreneurs
and businesses have the tools they need
to create jobs economic opportunity and
they have a voice now in Washington in
our secretary Secretary Ross is a former
chairman and chief strategy officer of
WL Ross & Company and has over 55 years
of investment banking and private equity
experience
mr. Ross has restructured over 400
billion dollars of assets and has been
chairman or lead director of more than
100 companies operating in more than 20
different countries we are very
privileged to have him leading the
Department of Commerce during these very
important economic times please join me
in a warm welcome for the Secretary of
Commerce Secretary Wilbur
good morning to start I'd like to
highlight a few members of our team who
were instrumental in putting together
today's proceedings acting under
secretary Daniel Hill assistant
secretary Matthew Borman mr. Brad Botwin
and Miss Julie AL saud are we just a few
weeks ago the Department of Commerce
initiated a national security
investigation of steel imports
authorized under Section 232 of the
trade promotion surge expansion act of
1962 President Trump then issued a
memorandum directing the department to
conduct the investigation expeditiously
this begins with an evaluation of the
current state of the u.s. steel industry
as well as current imports of steel
products and raw materials the purpose
of the investigation is to determine if
the steel being imported into this
country impairs our national economic
and military security if we determine
that steel imports are indeed a threat
to our security the department will
recommend responsible action to the
president today we will hear remarks of
several American steel producers as well
as numerous industry experts familiar
with steel trade and manufacturing we
hope the public will provide us both
with factual input as well as
suggestions for potential remedies key
questions need to be answered most
importantly does the problem rise to the
level of crisis sufficient to warrant
action beyond existing countervailing
duty anti-dumping cases if the President
does decide to take action should it
cover all steel from everywhere
what do we do in terms of the 20-plus
percent of steel imports from our NAFTA
partners should all products be covered
is some sort of tariff rate quota
appropriate or a more broadly based our
or their products or countries that
should be excluded is there some more
innovative solution if we go the tariff
route should it be broadly applied or a
tariff schedule for groups of products I
look forward to getting your inputs as
we collect more information each
panelist will be given five minutes to
speak then members of the United States
government panel will ask questions
related to the written and oral
submissions we are streaming the hearing
online and also will provide a
transcript for later review we have a
lot of panelists today I think 37
altogether and and so with that let's
get down to business
thank you Thank You mr. secretary of
course once again we'd like to welcome
all of you to today's public hearing on
the Bureau of Industry and security
section 230 to national security
investigation into the effect of steel
imports on u.s. national security the
Federal Register notice was published on
April 26 2017 and that set today is the
date for those who wish to testify on
this matter as the secretary indicated
37 speakers will present testimony today
there is anyone who has not submitted
comments for the public record and would
like to do so we will accept those
comments through May 31st which is one
week from today just to quickly review
the ground rules for today's hearing the
panel those of you who have been
selected to testify will be called to
the podium when it's your turn the order
of speakers is listed in the agenda that
was
provided when you checked in and we'll
be calling up the speakers in order the
speakers will be asked to limit their
testimony to five minutes a timekeeper
is on hand and that person will give you
a reminder when your end or ending
nearing the end of your time please do
not go past your allotted five minutes
as we hope to allow equal time for all
who are here to testify today
no outside equipment is allowed during
your testimony these proceedings also as
the secretary indicator being recorded
in the transcript is going to be posted
on the Department of Commerce website
the panel asks that when you do come up
to the podium please identify yourself
in the organization that you represent
prior to the beginning of your statement
we will not be taking any questions from
those testifying or from the audience
during the hearing however we may seek
clarification on specific points you've
raised we now begin with our first
speaker congresswoman Marcy Kaptur from
the state of Ohio good morning please
let me express my appreciation to
President Trump and his able Secretary
of Commerce a Wilbur Ross for initiating
this hearing I'm honored to appear
before your distinguished panel and say
to those in the audience that I
appreciate being placed here at the
start because we have votes up on the
hill today my remarks issue a clarion
call vital to our nation's defense
industrial base please help us save the
remaining modernized US steel
manufacturing and let us begin in
communities like Lorain Ohio America
today faces a national steel crisis
rising unprecedented global
overproduction coupled with unfair
dumping threaten the viability of our
United States steel industry like few
times before moreover declining domestic
prices exacerbated by currency
manipulation and the uneven impact of
the VAT tax relished by our competitors
bear down further on a beleaguered
industry our steel
cannot wait for long American steel
needs action now I will play some
additional articles in the record
including one from the American Iron and
Steel Institute Kevin Dempsey general
counsel and I will give my
recommendations and then in the
remaining time attempt to summarize my
recommendations are first that the panel
stop foreign dumping of steel on our
market beginning with tubular piping
number two to preserve our modernized
capacity so our nation can maintain our
strategic industrial and defense bases
third to develop bridge financing using
the full executive power of the
administration to secure first a
modernized u.s. steel production
platform and capacity along with
economic development and trade
adjustment assistance to communities and
workers harmed by that continuing
dumping and figure ways to neutralize
the impact the negative impact of the
VAT tax finally to prescribe immediate
retaliatory means to halt circumvention
by China South Korea Russia India
Vietnam and any state-directed economy
that continues to harm production in our
country according to Cleveland State
University Ohio alone saw a raw steel
production drop by 49 percent since 2000
this occurred despite hundreds of
millions of dollars of investment in
modernization in our state and who
exactly bears this burden of washout it
is the US companies caught in a terribly
unfair global playing field and
thousands of working families in
districts such as the one I represent
all across America's heartland
not just Ohio but Indiana Michigan
Wisconsin Pennsylvania to name a few
for years many of us who have fought
mightily against unfair trade deals have
seen our hard-working neighbors brought
to their knees for years we've been
promised federal intervention
to end predatory trade practices to
stabilize local economies and achieve
open global markets much is at stake for
America and for Americans who have
dedicated their lives to achieve a
competitive and highly efficient
industry critical to our future last
month I wrote the administration along
with Ohio senator Rob Portman and
sherrod Brown on behalf of the more than
700 newly idled US Steel workers and
their families in Lorain Ohio they were
just notified that in less than two
weeks they will permanently lose their
jobs this represents a dagger through
the heart of Lorain Ohio lorraine is a
town that once employed 12,000
hard-working men and women in the steel
industry and despite over 200 million
dollars invested in lorraine steel
modernization by the industry with wage
health and pension benefit sacrifices by
workers hundreds more of the remaining
steel jobs have been disappearing in the
last two years it feels as though the
life of a vibrant community is being
drained out as imports flood into our
marketplace even coming through import
portals like the port of Cleveland right
next door we cannot slow walk to a
national response that seeds the future
to a rigged predatory set of practices
by other nations that win market shares
by violating the rules through no fault
of their own workers lose their
livelihoods to unfettered dumping on our
market and that steady drip of victims
lay across our communities drowned by
steel from South Korea China Russia
India and Vietnam for many decades
Lorraine was one of America's premier
steel towns it deserves to be so it is
my understanding that US workers now can
produce a ton of finished steel in under
1 man hour a pace that makes their
operations the most efficient in the
world so if that is true why has America
steel been battered by the continued job
washout according to a 2016 report from
Duke University China alone produces
2,300 million metric ton
of Steel despite the fact that only 1500
million metric tons are necessary to
meet global demand that is an 800
million metric tonne overage globally
just from that country are the rest of
the world's free market steel producing
nations to be buried under heaps of
Chinese dumped steel by an economy that
is state-run the US Trade
Representative's office said in 2015
that China's capacity alone exceeded the
combined capacity of the United States
the European Union Japan and Russia
further the u.s. racked up a trade
deficit of 2.2 billion dollars with
Korea alone in 2016
not including subsidized energy tariffs
by state-owned Korean Electric Power
Corporation
additionally tubular steel imports the
same type of steel made in Lorain rose
by 86 percent from 2016 to 2017 so there
seems to be demand but continuing unfair
practices render the global steel market
unviable according to economist at Duke
and this adversely affects companies and
workers in places like Lorraine I will
place on the record the story of Thomas
Kelly a fine American one of the
thousands of steel workers to lose their
jobs due to unfair trade practices he's
worked hard he's been able to raise his
family his three children one of whom is
looking at college has instead taken a
job to help support the family now after
22 years at the mill and facing yet
another layoff mr. Kelly is forced to
start over and fight for his job and his
family while he pursues every
opportunity available believe me
the programs of the federal government
do not easily help him adjust to a new
future if there is to be one sadly his
story is not unique
more than 14,500 American workers have
lost their jobs in the last two years in
this industry as a result of our
inability to quickly address their
plight and the play
of this industry indeed entire
communities suffer as family struggle
small businesses lose customers and
local governments lose revenue it is my
understanding that according to section
232 the Department of Commerce has 270
days to complete an investigation I urge
this administration and this panel to
expedite this artificial schedule and
work as quickly as possible to link to
those workers and those firms and
communities such as I represent so they
do not face such a difficult future I
can guarantee you the lives of Americans
are at risk and Ohio steel workers and
businesses simply do not have 270 days
the time for action is now I appreciate
the opportunity to appear before you
today and secretary Ross thank you for
expediting this year Thank You
congressman I'd like to assure you we
have no intention of taking 270 days our
hope would be to complete the report by
the end of June thank you thank you all
very much
Thank You congresswoman I think we're
ready for the next speaker
representative from the Embassy of China
thank you questions no further questions
thank you again
Thank You mr. chair good morning
everyone my name is GUI
and I'm from the Chinese embassy I
welcome the opportunity to present
present present as the position of the
Ministry of Commerce of China in this
investigation on the effects if any of
steel imports of the national security
of the United States the Ministry of
Commerce believes there is no evidence
that steel imports threaten to impair
u.s. national security
United States defense and the national
security requirements are plainly not
dependent on imports of foreign made
steel
simply put United States national
defense and other critical sectors need
for steel can be and are readily
satisfied by US domestic production
first your agency as well as the US
Department of Defense had previously
determined that US national defense
requirements for finished steel are very
low resinous to statistics of the
American Iron and Steel Institute show
that just three percent of the total US
domestic steel shipments go to national
defense and homeland security clearly
current and projected US national
defense command
first you can be readily satisfied by
domestic production moreover the US
Department of Defense has long
established domestic procurement
requirements that apply to all steel
used it in critical national security
systems annual reports of us to massive
steel producers show that they cover the
steel supply for national defense and
national security applications and the
capacity and the shipments of steel of
these companies are exceed US national
defense
and security requirements thus still
protect still produced domestically in
the United States remains in abundant
supply relative to US national defense
requirements second the United States
imports is still from a divided the
developed diverse array of more than 100
countries and territories the portion of
imports of imports from each individual
country is relatively low compared to
two total importers Canada for example
the largest source of imported is do
accounts for only 17% of still imports
and that the vast majority of us do
imports nearly 70 percent are from close
US allies furthermore u.s. reliance on
imported steel is declining your
Commerce Department found that steel
imports have declined by more than 25
percent since since 2014
third the u.s. steel industry is healthy
and has the capacity to produce the
steel still needed to satisfy the
country's national security requirements
in particular US producers have
state-of-the-art technology to produce
high-end high values new products the
top domestic us do producers are
actively making significant new
investments both domestically and abroad
that increase the efficiency of their
domestic output and enhance their global
strength and competitiveness furthermore
given current capacity utilization rates
around 70% of the u.s. steel industry
has significantly significant expansion
potential to continue providing ample
supply for national security needs
the US government already provides
domestic producers with adequate treat
protection
over the last 40 years the u.s.
initiated more than 200 treaty remedy
investigations are imported steel
products from over 25 countries this
order these orders provide the u.s. in
industry with full protection from
imports of skill as well as generating
revenue for the US cherry due to high
rates of duties for the work volume of
imports of steel from China has
significantly declined in recent periods
and we present a very minimal portion of
the u.s. steel imports still imports
from China which are primarily low-end
products sought to distributor
distributors and processing centers are
down six 6704 percentages September 2015
Chinese steel imports plainly do not
impact us recording time please thank
you thank you
our next speaker come to the podium
please
good morning my name is Alexander zoom
equipped with the trade representation
of rushing the USA thank you for the
opportunity to speak today on behalf of
the Minister of Economic Development of
the Russian Federation currently imports
of a broad range of steel products from
Russia into the United States are
subject to substantial limitations
imposed by an agreement suspending the
entire dombay investigation and cut to
length carbon steel plate and by
anti-dumping duties against hot rod
fletcher old carbon quality steel these
two remedies have had the effect of
disciplining imports of steel products
from Russia
to such an extent and that the Russian
Kim parts must be excluded from any
remedy recommendation in the current
investigation a contrary result would
unfairly subject imports of the Russians
to two duplicative and severe
limitations regarding cut tool and
carbon steel plates in accordance with
the plate suspension agreement that was
put in effect in 2003 each signatory
Russian producer and exporter agrees not
to sell its merchandise subject to this
agreement to any unaffiliated purchaser
in the u.s. at prices that are less than
normal values of the merchandise as
determined by the department on the
basis of information submitted to the
department there is only one Russia
producer who provides necessary
information to the department and held
the possibility to sell subject goods to
the USA the quantities of shipments of
the product from Russia to the United
States plummeted by more than 25 times
from 250 2000 tons in 1996 to 10,000
tons in 2016 the Department issues the
normal values which exclude the risk of
unfair trade practices by the Russian
import the US market of controlled oils
and sheets has been closed for the
Russian exporters due to the prohibitive
level of anti dumping duties of up to
180 4.50
percent since the end of 2014 prior to
that there was a suspension agreement
enforce Russian produces treated the
agreement with Julie respect although it
was designed for non market economic
country in 1999 also in September 2016
less than three quarters ago the
department finished an anti dumping and
countervailing investigations against
certain cultural still flat products
with no measures for the Russian
originated products due to negligible
amount of Gimple proving that input of
these goods from Russia did not cause
any injury to the US industry in light
of the array of limitations that already
exist and have already severely reduced
the volume of imports of Russian flat
rolled carbon steel products into the
United States we urge the department to
use great portion in course of the
current investigation in order to ensure
that the Russian merchandise is not
subject to excessive redundant and
conflicting restrictions the statute
directs the president to provide relief
only to the extent the cumulative impact
of such action does not exceed the
amount necessary to prevent a remedy the
serious injury in the current case
however the Russian kimba's have already
been so drastically limited by the
measures enforce that further
limitations would be excessive in terms
of the amount necessary to prevent her
remedy the injury found by the
department it would be unfair therefore
for the department to recommend the
remedy to the president that is not
necessary to fulfill the statutory
standard for the imposition of relief
for the reasons outlined above we
respectfully retreat that there is no
need for the imposition of additional
inputs restraints on the Russians to
produce additional remedies under
Section 232 would unfairly impose
redundant and potentially conflicting
remedies on inputs from Russia we
respectfully ask the Department to
abstain from recommending any additional
remedies on imports of steel from Russia
thank you thank you let me see if the
secretary or the panelists have any
questions
no I don't think we have any okay so no
questions thank you we could have our
next speaker come up please Secretary of
Commerce
mr. Ross member of the panel thank you
for inviting me to participate my name
is Carol Tasha Lee I am director of
international affairs for euro fare
within European responsible for EU trade
actions covering imports as well as
third market access the EU not only
imports around 25 million tonnes of
Finnish steel excluding tubes it also
exports more than 20 million tonnes EUR
of our companies are long-standing
reliable suppliers of steel to the
United States many have steel plants in
the United States the US and the EU
government as well as industry share the
same concerns of global steel over
capacity excess steel production and
unfair trading practices euro fare has
been working with the European
Commission to tackle unfair injurious
input searches using our trade defense
instruments F applied without inhibition
EU trade defense actions are effectively
supporting our industry we have not
considered measures of the salt that you
are considering in this investigation
but more work is need to address the
root causes discussed in fora like OCD
and the g20 steel excess capacity forum
concrete action must be taken
collectively by the EU us and other
like-minded governments to secure
balance in global and regional markets
we do not believe that restrictive
unilateral action based on national
security will allow for lasting
solutions we all need however as the US
pursues
investigation euro fare believes the
analysis national security must be
narrowly tailored to focus on direct
tracks to national security first the
analysis should focus on specific steel
products needed for specific users
directly tied to national security
particular defense application what do
tin mil products used to make cans for
food and beverages have to do with
national security how real is the risk
that one did you as will not be able to
produce enough rebar or sections for
construction and infrastructure given
its massive scrap availability in this
regard we know that many of the sub
sectors identified by the Department of
Homeland Security as critical
infrastructure applications have little
or no relevance to national security
needs second if a clear direct national
security link exists the investigation
should determine whether US producers
have sufficient capacity to meet the
needs of the Defense Department and
critical infrastructure applications
third the investigation should consider
factors showing that imported justement
is not needed in particular the
consideration whether adequate
complimentary imports are available from
US allies like the EU F so action should
not be taken to adjust imports
furthermore any import adjustments
should differentiate based on the threat
posed to u.s. national security by
specific foreign steel suppliers not all
foreign sources of Steel are the same
with respect to national security
euro fair companies are long-standing
reliable suppliers of high quality
Steel's
that are needed to maintain US national
security and many have invested in u.s.
plants to makes new products employing
American workers if the bureau would not
have adequate information or sufficient
at hand to perform this analysis it
could issue special airs to users US
producers and foreign producers of steel
a lack of information on consumption of
specific Steel's and US produces
capacity to make them is not a reason
not to perform a meaningful analysis ITC
regularly issues questionnaires and
trade remedy investigations Bureau fair
is available to contribute to such
framework including data to ensure that
the investigation produces focused
analysis thank you thank you any
questions panel
thank you ready for our next week thank
you
hello I would like to thank Department
of Commerce and secretary Rose for
permitting me to speak at this very
important hearing my name is vitaly
terra suka and they have economic and
trade office of the Embassy of Ukraine
to the United States I'm here on behalf
of the government of Ukraine to share
our views concerning this matter
Ukrainian the united states are in good
relations on matters of national
security and economy inputs of steel are
a normal feature of the trade relations
between our countries such input from
Ukraine do not in any way threaten to
undermine the national security of the
United States to the contrary Trading
steel provides mutual benefits to both
countries so we respectfully ask the
United States not to impose any measures
under Section 2 3 - against inputs from
steel from Ukraine the United States and
Ukraine have maintained the close
diplomatic and security relationship
since Ukraine regained its independence
in 1991 Ukraine has closely cooperated
with the United States for nuclear
non-proliferation issues including given
up its nuclear weapons the US Department
of Defense is assisting Ukrainian is
defense and security reform including
related the defense planning policy
strategy and financing it crania
military officers attend US military
schools to receive vital training
instruction and professional development
Ukraine has contributed a large number
of troops to Iraq to support the United
States efforts there from 2003 to 2005
Ukraine had the fourth largest number of
foreign troops in Iraq after the United
States United Kingdom and Poland as a
result of the illegal occupation of the
autonomous Republic of Crimea and the
City of Sevastopol by the Russian
Federation and its further military
invasion in certain areas of Daniel
Lugansk regions since 2014 slightly over
7% of the territory of Ukraine temporary
remains out of control of the government
of Ukraine under the circumstances
maintaining close cooperation in the
diplomatic and security fields is
clearly in the mutual interests of both
of all countries the United States is
not a major export market for Ukrainians
to Ukraine steel producers are
principally focused on regional markets
in Eastern Europe the Middle East and
North Africa experts of steel to the
United States Bailey ranked 19th of all
expert destinations in 2016
as a result of the illegal export
creations of Ukrainian companies assets
and property by the Russian forces in
certain areas of the Donetsk and Lugansk
regions of Ukraine in March 2017 a large
part of Ukraine steel industry was put
in uncertain position Ukraine's steel
industry is under attack both physically
and economically but foreign backed
separatists in the eastern portion of
Ukraine in March a large segment of
Ukraine still in the string the net
region was seized by the separatists
this has put the Ukrainian steel
industry in a very uncertain position
the viability and success of the train
steel industry is crucial to economic
and political stability of Ukraine it is
also vital to the bilateral us Ukraine
security relationship which bolsters US
strategic interest in the region the US
government in 2001 completed the similar
section 232 investigation concerning
inputs of iron ore and semi-finished
steel the Department of Commerce
concluded in that case that there is
neither evidence showing that the United
States is dependent on imports of wire
or a semi finished you know where
evidence showing that such input
threatened the ability of domestic
producers to satisfy national security
requirements applying the same
methodologies we are confident that the
evidence obtained in this case will
likewise show that the students did not
threaten the US national security taking
into account that the United States and
Ukraine are members of the WTO would
like to emphasize that any possible
measures should be in line with the
obligations under the WTO we look
forward to continued cooperation with
the United States government in securing
peace protecting international war and
stabilizing the Ukrainian economy we do
hope to continue to develop an open and
mutually beneficial trade and investment
relationship with the United States
thank you for the opportunity to testify
here today
thank you we're ready for our next
speaker thank you very much
good morning secretary ross and
distinguished panel members my name is
David Rintoul I'm the president of the
United States Steel Corporation tubular
business segment thank you for the
opportunity to elaborate on the national
security consequences that significantly
has aspirate the harm we suffer when the
u.s. fails to act against steel products
imported in violation of US law I'm a
proud ten-year veteran of US Steel and a
nearly 40-year veteran of the steel
industry it is no small matter that I
speak about today I hope you will agree
that in fact is quite a big deal not
only for one of our nation's
foundational companies but for the
United States as a whole for more than a
century the iconic United States Steel
Corporation born during America's
industrial sentencing represented the
unique ingenuity competitiveness and
boundless aspirations of our country as
one of the leading pioneers of the
American century US still literally
helped to lay the foundation of our
great cities build the tools and
transportation infrastructure that
unified the continent and heeded the
call to arms when as a nation of war we
stood against the forces of those who
would forever change our way of life one
aspect of our defense infrastructure
that is dangerously threadbare involves
our country's liens on imported steel
products known as oil country tubular
goods otherwise known as Oct G a family
of products that makes it possible for
energy companies to explore for retrieve
and bring to market oil and gas that
America needs to guard a security
through a reliable and dependable supply
of domestically produced energy today
imports make up approximately 50% of the
oct G market driven by Chinese
manufacturers over the last several
years and now overtaken by plants in
South Korea foreign suppliers have made
it their mission
to steal this market from US companies
well aware of the danger such a loss of
domestic capacity would pose to
Americans national security so you might
ask how did we get here and how bad is
it sadly the answer is threefold first
the government South Korea China and
elsewhere have deemed dominance in this
market a matter of their national
security to accomplish this goal
they've plainly subsidized their
domestic industries providing as much
regulatory and other support as needed
and work steadily to undermine US
efforts and for the record the domestic
market in China is essentially in -
sorry in South Korea is essentially
non-existent and in China it's minimal
at best
second the results of this behavior by
countries enlarged and counties in large
swathes across America has been
predictable and painful in human terms
and has left us with a long term deficit
when it comes to this key manufacturing
capability in the tubular business at US
Steel alone this unfair competition has
resulted in the closure of 50% of our
mills since 2014 and forced us to lay up
way too many of our friends and
colleagues as a result of this and the
harm is agonizingly real in 2014 we had
more than three thousand people working
as part of our team focused on tubular
products and production at its low point
six months ago that number had dwindled
to 950 a reduction of over two-thirds
even today as the energy market has
begun a modest turnaround we've only
been able to engage a total of 1,300
people in our business in the last two
years alone US Steel's tubular business
has suffered severe financial losses
adding to this pain is the fact that
during these losses and while they
occurred imports from South Korea Mexico
and Russia continued to crush our cross
our borders
including those from some of our
competitors who claim to be American but
closed all of their American plants and
brought pipe in from foreign sources
which brings me to point number three as
a nation we need to understand that the
traditional remedies used in trade
related matters from increased import
duties to more rigorous enforcement
simply weather in the face of the
audacity of these foreign companies and
their government sponsors while these
foreign companies and governments
operate under the guise of competition
and fairness their actions are driven by
an old holds barred ruthless focus on
winning control over the markets that
Americans need to defend the nation near
and long-term threats putting a stop to
this foreign government enabled
encroachment into America's critical
energy independence infrastructure is no
less a matter a nation's security than
building new generations of ships and
aircrafts and strengthen our cyber
defenses they are all crucial simply put
if we as a nation are hostage to the
other parts of the world
for the development of key pieces of our
energy sector then we can never lay
claim to true energy independence which
puts us at tremendous risk
mr. rhetoric you could wrap up your
remarks please it's about five minutes
if you could wrap up your works thank
you two more sentences American American
companies have always thrived when the
plane field is level and rules are clear
honest competition is at the heart of
our democracy and we look forward to a
time in the near future when that norm
once again governs the marketplace we
must let truth justice in American Way
prevail thank you thank you sir I think
we're ready for our next speaker and for
all of you who have remarks that are
longer than you've submitted then you
have time to get in five minutes those
will all be in the record thank you
thank you
good morning I'm John Kerry Ola chairman
CEO and president of new core
corporation on behalf of new coil and
our more than 24,000 teammates I would
like to thank you for the opportunity to
appear before you today we welcome this
investigation and to addressing the
unprecedented crisis facing the u.s.
steel industry caused primarily by the
massive global overcapacity in historic
import levels this crisis must be
resolved if we ought to continue
supplying steel for US national defense
and critical infrastructure applications
as the largest steel producer and
recycler in the United States
Nucor is proud to supply our armed
forces with a wide variety of
mission-critical steel products to keep
our soldiers and our nation safe for
example new core power products are used
in Humvees suspensions and track
forgings for the Abrams tank and Bradley
Fighting Vehicle our structural steel
goes into the Patriot missile system and
our armored plate protects soldiers and
sailors in armored vehicles aircraft
carriers and destroyers in addition
Nucor steel supports the critical
transportation and energy infrastructure
that is vital to our entire economy we
agree with President Trump that and I'm
quoting core industries such as steel
are critical elements of our
manufacturing and defense industrial
base
that is why new choirs invested
significantly to become a reliable
supplier of these products playing a
role in our nation's defense requires a
long-term financial commitment for
example new Corps is one of only two
steel companies in the United States
certified to produce Navy grade armored
plate for aircraft carriers destroyers
and submarines entering this market
required purchase purchasing specialized
equipment hiring knowledgeable personnel
developing advanced chemistry's and
processes and undertaking rigorous
testing and certification procedures to
meet the Navy's requirements this is the
type of continual investment that is
necessary to satisfy the rapidly
evolving needs of our armed forces
unfortunately global overcapacity and
unfairly traded imports threaten our
ability to invest production over
capacity in the steel industry has
reached crisis levels there is more than
700 million metric tons of global steel
over capacity more than half of which is
located in China alone in fact China's
estate supported steel industry now
exports more steel than is produced by
all three nafta countries combined
China is at the heart of this crisis but
governments in countries like Korea
Brazil Russia and Turkey also do their
part to drive excess steel capacity
these governments continue to plug the
world but artificially cheap steel and
much of it finds its way to the United
States when markets are opened and the
government doesn't keep mills running
for political reasons a sustained surge
of low-priced influence has eroded the
u.s. steel industry over the last decade
shipments have fallen by approximately
20 percent and nearly 20,000 workers
have lost their jobs in 2015 the
industry operated at a 1.7 billion
dollar net
and despite improving demand in 2016
American Mills only operated at around
70 percent of capacity u.s. steel makers
can barely maintain what they have let
alone continue to invest in developing
new products this threatens the
industry's ability to supply the
advanced steel products that our
military relies on steel is used in
national defense applications may be a
relatively small share of our overall
sales but these products are made at the
same facilities and by the same workers
who make other products a commercially
healthy industry is vital to ensure that
a stable supply of products the national
security and critical infrastructure
applications this includes the entire
production chain beginning at the
melting stage and continuing continuing
through the finishing and fabrication in
a time of national crisis the US cannot
afford to rely on imported steel slabs
from foreign suppliers like China and
Russia national security begins with
primary steelmaking broad-based action
is the only way to target all imports
and also address the root cause of the
of the current crisis chronic over
capacity in countries that do not
operate on a market basis in closing we
urge you to find that steel imports
threaten our national security and to
take broad action that will ensure the
long-term viability of our nation's
steel industry thank you for your time
thank you I do have a question for you
could you speak a little bit to the
relationship between the capacity of the
bills and the investment that's that's
generated by the various companies yes
you know when you talk about the
utilization rates that are lower today's
is a direct correlation between
utilization and profitability our
ability to cover our fixed cost of our
operations is impacted when we have up
when we operate at such a low capacity
utilization when we're not making money
it's very difficult to continue to
invest in new machine
and invest in our teammates in order to
help them be ready when we have a need
for national defense good thank you
we're ready for our next speaker thank
you Thank You secretary Ross my name is
roger newport and i am the CEO of a k
steel corporation I want to thank you
for the opportunity to testify on behalf
of a case deal and our 8500 us-based
employees a case deal welcomes the
Department of Commerce is section 232
investigation of the serious threat
posed by imported steel to our national
security for decades the steel industry
has battled global overcapacity in the
oversupply of US imports many of them
dumped and subsidized just since the
beginning of 2015 over 14,000 steel
workers have been laid off and numerous
production facilities have been idle
including 8 K Steel's blast furnace and
steelmaking operations in Ashland
Kentucky
unfortunately unfairly traded imports
remain a severe threat to the long-term
viability of the domestic steel industry
a case deal is the only company in the
United States that produces a
combination of flat world carbon steel
stainless steel and electrical steel
products I can certainly speak to the
adverse impact of imports on each of
these types of steel I like to focus my
remarks on electrical steel a case deal
is the sole domestic producer of grain
oriented electrical steel or goes which
is used in cores and chorus emblems for
the production of electrical
transformers transformers are a key
component of our nation's electricity
grid from the large transformers that
transmit power across the entire grid to
the smaller transformers that deliver
power to our homes and businesses a case
deal is also the sole domestic producer
of high-end non oriental ectric will
steel or nose products nose is also
critical for electrical grid as it forms
the heart of massive generators that
actually create electrical energy about
2,000 highly skilled workers melt and
finish electrical steel products at our
Butler Pennsylvania in Zanesville Ohio
facilities and we also conduct extensive
electrical steel research and
at our new state-of-the-art research in
Innovation Center in Middletown Ohio why
we strongly believe that electrical
steel plays a crucial role in our
national security through many others
pursuant to policy directives issued by
both President Obama and President
George W Bush the Department of Energy
has identified electricity transmission
systems as infrastructure that is
critical to our national security and it
requires urgent attention the government
has identified equipment failure and
aging infrastructure in the US as
threats to our national security because
virtually all household and businesses
rely on electricity the security and
long-term viability of the u.s.
electrical infrastructure is a critical
national imperative a secure reliable
supply of electrical steel is necessary
to maintain the electrical grid major
blackouts such as the one in San
Francisco last month that shut down the
financial center of the city demonstrate
that the lack of reliable electrical
grid infrastructure is a major major
threat to our national economy major
blackouts may occur as a result of grid
obsolescence severe weather events like
Hurricane Katrina or superstorm sandy or
cyber terrorists or other attacks on the
electrical grid infrastructure a secure
domestic source of electrical steel is
more important than ever before and a
case deal has sufficient production
capacity to meet current and future
estimated demand within the US and we
can quickly react to national
emergencies as we did following
Hurricane Katrina due to competition
from dumped and subsidized imports the
only other US producer of goes Allegheny
technologies shuttered a plant and
discontinued goes production in 2016
high-end electrical steel is very
difficult product to make as it requires
significant amount of dedicated capital
equipment and a sophisticated
well-trained workforce therefore if a
case deal were to exit the market there
would be no operation electrical steel
manufacturing equipment in the United
States and specialized labor and related
expertise and operations would be lost
and many of a case deals town and
operators and researchers would simply
relocate to other businesses or
industries foreign countries or become
unemployed a case deal strongly supports
presidential action to stem the surge of
imported electrical steel we are very
concerned that importers the simply
sidestep to really
that covers steal by using foreign
electrical steel to build cores and
transformers outside the United States
then simply import those cores and
transformers into the country
therefore to effectively address the
vital national security interests of the
United States and protect a domestic
electrical grid for the long run the
Department of Commerce must include
imported cores and transformers in any
relief that covers imports of electrical
steel without addressing this supply
chain issue any remedy of electrical
steel will easily be circumvented
keeping imports of electrical steel
cores and transformers at a reasonable
level would balance the interest of
protecting our national security with
allowing a reasonable level of imports
to meet the ongoing needs of buyers of
these materials complete reliance on
imports for these critical products
would ultimately lead to dependency on
foreign sources for the materials needed
to maintain and modernize the electrical
grid thank you for the opportunity
testifies thank you we're ready for our
next speaker
good morning I'm John Brett president
CEO of ArcelorMittal USA thank you for
holding this hearing on the impact to
steal importance on national security
our country's defense an industrial base
depends on strong and sustainable
domestic steel industry to supply our
military and critical infrastructure
needs our company has a long a rich
history of supporting our nation's
defense capabilities we are also a major
supplier to the US energy industry today
I'd like to speak to the relationship
between supplying our military customers
and our broader commercial business our
efforts to meet the demands of our
energy customers and our view of the
challenges facing us and global steel
producers serving the needs of our
nation's military has been a longtime
priority of ArcelorMittal USA and our
processor companies today this tradition
continues as we support our nation's men
and women in uniform as the largest
supply of armored steel play for
military applications on land and at sea
our armor plate products find
applications and fighting vehicles used
by the Army and the Marine Corps we also
supply steel to Navy aircraft carriers
submarines destroyers and other ships
preserving the domestic steelmaking and
fishing capacity to provide a highly
specialized steel for defence purposes
is without a doubt a national security
issue
however the steel ton is directly used
for defense applications the small
compared to that of the broader
commercial market as large a suppliers
we are to the US military our sales for
defense defense applications represent
only 1% of our total production defense
related sales are still alone are not
the determining factor in whether steel
mill is sustainable instead the
commercial viability of steel operation
is imperative for retention of that
operations ability to serve the defense
needs of the nation as you know our
school or middle USA is joined with
other US producers to bring several
trade remedy cases in response to a
flood of unfairly traded imports from
China and other countries
our operations which produce steel for
military applications were not immune
from the negative negative impact of
these imports we petitioned this
department and the ITC for relief from
unfairly traded imports of cut to linked
plates from 12 countries after imports
increased by over 100 percent
the ITC found that as a result the u.s.
plate industries opera income had
dropped 75% our steel plate sales
dropped by a third by 2015 our plate
operations were running at only 55% of
their capacity and prices fell to the
lowest levels in more than 10 years
we're forced to price the levels that do
not cover our cost then we are also not
generating the capital required to
reinvest in our operations and if we
cannot reinvest we cannot remain on the
cutting edge of new technology for the
future in other words the impact of
imports has felt through our throughout
our entire business commercial and
military staying on the cutting edge of
new technology is equally important for
our energy customers as we produce a
full range of steel grades for the
energy transmission and distribution
markets we've been a leader in
developing Apix 70 steel grades
essential for u.s. pipeline projects we
even we have invested significantly in
the production of both plate and hot
rolled steel for our us line pipe
customers our ability to serve these
markets is threatened when competition
from unfairly traded imports threatens a
sustainable business in addition to the
plate case it has been a similar story
on hot roll call row and
corrosion-resistant steel US imports of
these products increased 69 percent
between 2013 and 2014 the impact on our
business was devastating mr. secretary
we appreciate the attention this
administration is devoted to the state
of the steel industry it was my honor to
stand in the Oval Office when the
president announced this investigation
nonetheless the United States must
address the problem of global excess
steelmaking capacity our every other
action you or we take won't matter
Chinese government policies have driven
their steel production to over 800 mm
metric tonnes last year in 2016
China exported 108 million metric tons
these exports have direct negative
effects on US producers they also have
an indirect impact by displacing steel
in other countries hoops producers then
shipped to the US market or into the US
as downstream products made from cheap
Chinese steel which while China is the
main culprit we say challenges from
countries as diverse as Korea Russia
Turkey and others the result we sell
less steel receive less money for the
steel we do sell and employ fewer
workers over the long term this
situation is not sustainable we welcome
this investigation because we need
solutions to unfair trade practices but
as you consider additional actions
please remember that we also need to
find a solution to the excess steel
capacity that is impacting global
markets an objective any action should
include increasing pressure on China to
change the policies led to the creation
of non-economic steel capacity and
discourage other governments from
adopting similar policies thank you
thank you I think we're ready for our
next speaker thanks so much thank you
good morning my name is Barbara Smith
I'm the president and chief operating
officer of commercial metals company a
steel producer headquartered in Irving
Texas I appreciate the opportunity to
appear before you to discuss why high
levels of imported steel threaten the
national security of the United States
CMC is one of the world's most
technologically advanced and efficient
steel producers we have pioneered the
micro mill technology which enables us
to produce rebar more efficiently and at
the lowest possible cost the American
steel industry as a whole is as modern
and competitive as any in the world
we can provide the United States with
nearly all the steel products a modern
industrial economy needs however steel
imports are seriously damaging our
ability to produce steel products in the
United the United States requires for
national defense critical infrastructure
and our general economic strength steel
is essential to the national security of
the United States the products EMC makes
that is most obviously vital to our
national security is advanced armor
plate CMC makes armor plate that is used
in a variety of applications including
tanks mine Resistant Ambush Protected
vehicles and other military vehicles the
lives of our soldiers literally depend
on this product among other projects for
the Defense Department
CMC was proud to supply the rebar used
to repair the Pentagon after the 9/11
terrorist attacks in addition to armor
plate for military CMC produces a
variety of specialized bar rounds angles
and shapes that are used by the
transportation energy construction and
mining sectors
these are critical infrastructure
sectors that are vital to our national
security
however CMC's most critical role in the
national security is as a major producer
of rebar a product critical
of critical importance to this nation's
infrastructure national security depends
upon economic security economic security
depends upon a broad-based vibrant and
self-sufficient economy our economy
depends on a world-class system of
infrastructure connecting and supporting
all economic activity here at home and
abroad rebar is an essential product for
national security as this product is
used to support every aspect of our
critical infrastructure this includes
the roads bridges airports power
transmission lines and all the other
critical facilities that we use every
day god forbid that we are attacked
again on our own soil without the
capability to produce the necessary
products like rebar to restore our
country unfortunately many of the
world's major producers including Turkey
China Taiwan Japan and Mexico make far
more rebar than they need for the sole
purpose of export to other countries
these exporters have taken full
advantage of the open US market as rebar
imports have increased by nearly 50
percent from 2014 to 2016
growing imports have had a significant
effect on CMC's profitability employment
and our ability to innovate and invest
in response to the flood of imports of
the past several years CMC was forced to
close 30 US locations since 2008 and to
reduce our workforce by 4,000 jobs
imports have also adversely affected our
ability to make new investments
CMC invested millions in our
technologically advanced micro mill in
Mesa Arizona and in the building of the
most modern rebar mill in the world in
Durant Oklahoma we were planning to
commission a whole series of micro mills
which would have created thousands of
high-paying jobs across the United
States
unfortunately competition from imports
has been so fierce that we had to put
our expansion plans on hold the
situation has gotten so bad that the
returns on a number of our investments
aren't even covering our cost of capital
allowing our steel industry to shrink
further will endanger our national
security
if CMC cannot continue to invest it
won't be able to produce the armor plate
we need for army vehicles and other
military applications the specialized
plate and bar products required for the
transportation energy construction and
mining sectors or the rebar needed for
every kind of infrastructure application
this story is being repeated throughout
our industry I'm afraid that the United
States is nearing the point where we
will be depending on other countries for
the steel products essential to our
national security this is a very
dangerous proposition I urge you to
conclude that steel imports threaten the
national security of the United States
and to recommend that the president take
prompt and comprehensive action to
address this crisis thank you very much
thank you for testimony mr. Gibson next
speaker thank you
good morning secretary Ross and at the
panel I'm Tom Gibson I'm the president
and CEO of the American Iron and Steel
Institute and I appreciate the
opportunity to testify today
a strong and viable domestic steel
industry is critical to America's
national defense national economic
security and homeland security
virtually every military platform is
dependent on US produced deals and
specialty metals an applications range
from aircraft carriers and nuclear
submarines to patriot and Stinger
missiles armor plate for tanks and
specialty Steel's for every aircraft
that's in production today these
critical applications require consistent
high-quality domestic supply sources but
respectfully based on we heard some
other things this morning national
security is more than weapons systems
steals importance to national security
must also be looked at in a broader
context to include our nation's critical
infrastructure our military and our
broader economy depend on transportation
infrastructure like roads bridges
railroads transit systems and airports
all of which are built with steel
products such as rebar plate sheet and
fabricated structural members Public
Health and Safety require reliable and
efficient water and sewage systems that
are built with steel components
including tubular goods tanks and
culverts in addition steel is critical
to our energy security our nation
depends on reliable domestic energy
source and on domestic steel products
that are necessary to develop and
transport the energy oil country tubular
goods are essential to oil and gas
production and steel line pipe is needed
to move these energy supplies to market
as we've heard electrical power
generation is another critical national
security needs served by steel grain
oriented electrical Steel's are a
principle raw material for power
distribution and distribution
transformers which are critical to the
grid non oriented electrical Steel's are
an important raw material for using
critical and destruct
including large pores and electrical
power generators and industrial
applications for oil drilling in oil and
gas pipelines the US Steel's ability to
supply our defense establishment and our
nation's critical infrastructure needs
depends on the steel industries
continued ability to compete in
commercial markets and maintain a
domestic manufacturing presence
simply put commercial viability is a
prerequisite for national security
availability repeated surges and imports
of dumped and subsidized steel products
from numerous countries in recent years
have entered the u.s. industry and
thread and further interest into injury
putting our national security very much
at risk Finnish steel imports took a
record 29 percent of the US market in
2015 and while steel imports declined in
2016 as a result of success in a number
of trade cases it still remains at a
historically high level twenty five
point four percent last year and in 2017
imports are on the rise again with total
imports up 19 percent in the first three
months of the year and finished steel
imports now taking twenty six and last
month 27 percent of the market these
high level of imports have been a
critical factor forcing several steel
companies to temporarily close major
steelmaking facilities employment in the
steel industry declined by fourteen
thousand jobs from January 2015 to
December 2016 foreign government
interventionist policies in the steel
sector have fuelled massive and still
growing global over capacity and steel
estimated to be more than 700 million
metric tons more than half of that over
capacity 425 million tons is located in
China while government market distorting
policies have produced a dramatic
increase in the size of the Chinese
steel industry to the point to data that
represents half of all global steel
production this massive increase in
Chinese capacity and resultant increase
in Chinese exports to the world have
resulted both an increased imports of
Chinese steel to the United States and
it increased imports from third
countries as Chinese exports these
these are further processed into
downstream steel products that are then
re exported to the United States for
example Chinese billets are being
further processed in turkey into long
products which are then sent here to the
United States while Chinese flat rolled
steel is being converted in pipe
products in Korea which are then dumped
into the US market in addition the
Chinese model is now being emulated in
other countries as well
perpetuating the growing overcapacity
problem causing further injury from
dumped steel products to date the u.s.
steel industry is relied on our trade
laws to seek to address unfairly traded
steel imports into our market and while
the trade laws have provided some really
they leave openings for steel products
not subject letters to come in and
reclaim that share which is I believe
what we're seeing going on right now so
accordingly aisi recommends that the
administration use the current section
232 investigation to fashion a more
comprehensive and broad-based program of
action to safeguard America's national
security thank you for the opportunity
to testify and I'll be happy to take any
questions thank you so much are we ready
for our next speaker
good morning my name is Tim Tempe and
I'm the chairman CEO and president of
Timken steel I'd like to thank secretary
Ross and members of the Commerce
Department for having us here to testify
this morning on on such a significant
issue
my great-grandfather great-great
grandfather
HH Tim pian established steel production
in Canton Ohio in 1917 generations of
people from this company have have taken
us from what used to be a bearing only
producer to a global steel company that
creates high-performance steel for
demanding applications almost for almost
every market as we celebrate our
centennial year this year our 2,600
employees like the generations before
them take pride in making the cleanest
steel in the world our niche in the
steel industry is is special bar quality
where spq steel to serve customers
across a wide variety of industries our
customers share two things in common
first their products endure a high
degree of stress and operate in harsh
environments they need to be
consistently high-performing steel to be
successful and second our customers are
vital to the national security of the
United States you'll find our steel in
every kind of military equipment and
ordnance for example an example is work
we've recently done with the US Air
Force to improve the strength and
toughness of their buck-buck of their
bunker-busting bombs we've delivered
high performance steel at a lower price
improving the effectiveness of the
weapon in a limiting its target and
limiting collateral damage while also
reducing the total cost to the American
taxpayer there's a famous military quote
that says if you find yourself in a fair
fight you didn't plan your mission
properly
well one essential part of that planning
is to ensure that the military has the
best most modern tools possible and
American companies like Timken steel are
delivering the type of innovation that
gives the men and women of the military
an advantage in completing their in
their missions and
turning home safely we also serve
companies across a wide range of
industries many of which have a vital
role in preserving and enhancing
national security you'll find our
products a mile below the Gulf of Mexico
in an oil strength in a million of
million vehicle transmissions that move
people and goods across the road safely
every day and in the landing gear of
tens of thousands of aircraft that
touchdown every day our products are
throughout energy transportation and
manufacturing and they enable customers
to push the bounds of what's possible in
their products put simply we like the
tough stuff the harder the better our
ability to serve customers who preserve
and enhance national security is
dependent on the domestic steel
industries continued economic viability
the world has an over capacity of Steel
so you've heard this morning and many
foreign competitors export their steel
to the US Shores
depressing pricing and to place
displacing our sales we're not afraid of
fair competition we have the some of the
best people and assets in the world our
employees not only can compete but they
can out innovate and out work anyone in
the world and the work our engineer set
engineer sets the global standard for
special bar quality steel you've heard
this morning a lot of numbers there
three that keep me awake at night seven
hundred million four hundred twenty five
million in nineteen ninety four million
the world has 700 million metric tons of
steel over capacity 425 of which are in
China and demand total demand in the US
market is 94 imports are a very real
issue for the u.s. steel industry
particularly when foreign competitors
don't play by the rules as a company
we're using every competitive tool we
have to combat unfair imports we commend
the kamas commerce department for
evaluating all the levers it can pull as
well there is no one-size-fits-all
remedy for this issue with hundreds of
steel products across multiple countries
the remedy must be flexible enough
to address the complex nature of global
steel trade
we recommend assessing all of the tools
in the remedy toolbox including tariffs
quotas VRA s and more and in some
instances a combination of remedies may
be necessary we appreciate your
leadership on this issue all of us
attempt conceal take great pride in
contributing to the security of our
nation and share your belief that a
strong steel industry is critical to our
national interests thank you thank you
for your testimony we're ready for the
next speaker Thank You secretary Ross
and members of the committee
my name is Barry settlement on the CEO
and chairman of zuckerman industries
before I make my statement I'd like to
say that I find it extremely ironic the
Russian steel giant hail sever stall
vacated all of its steelmaking assets
here and sold them because they couldn't
make money due to massively dumped
imports supplement industries is the
largest pipe and tube producer in North
America we produce over 2 million tons
of tubes annually consuming almost 2.2
million tons domestically produced steel
our millions of miles of tubing are the
threads that so the security blanket
that covers our great nation tubular
products are critical to maintaining a
strong defense and essential civilian
sectors of the US economy and is the
backbone of our nation's infrastructure
in 2008 we produced 125 thousand tons of
hollow structural steel tubing used for
the border security fence which protects
this country and its citizens from
illegal border crossings and illicit
drug trafficking we produce fire and
suppression pipe that is routed
throughout our buildings schools
hospitals power plants industrial plants
warehouses military bases we produce the
electrical conduit to provide safe
passage and routing to all of the wiring
in the buildings we see especially in
our data centers mission commissioned
critical military and Space Center's
power plants and trans
rotation systems we make the pipes that
carry water and waste throughout all of
our buildings in civil infrastructure
our military bases airports
transportation systems and ports all
rely on our pipes we produce the oil
country tubular goods and line pipe that
is vital to the expert exploration and
extraction of oil and gas that provide
us with the energy to run our economic
and military machine our tube
transports the fuel and gas to planes
trains automobiles houses and buildings
for heat to fuel power generating
turbines and to support solar panels and
wind turbines to propel clean energy use
our structural tubing is used for
protective posts which you see
throughout the city and many others for
vehicle barriers it is used for
buildings and agricultural equipment to
farm our fields and feed not only the
u.s. population but the rest of the
world highway signage guardrails bridges
electrical distribution towers cell
towers rail cars are all made with our
hollow structural tubing the very
foundation of one world trade is sitting
upon our pilings our drawn over mandrel
tubing is used for hydraulic cylinders
that makes movement and all machinery
possible including mining equipment
construction machinery transportation
robots automation ask any military man
if a hydraulic cylinder is critical to
their success there's not one piece of
military equipment that doesn't have a
tube in it not one from gun barrels to
rocket launchers to helicopters to naval
ships tanks armored personnel carriers
the list is infinite ask the people of
Flint Michigan if water pipes are vital
to their survival
in sum to ask if pipe and tube is vital
vital to our national security is not
the right question the question is
really how could our country possibly be
secure without it our economy and our
military would grind to a screeching
halt without a vibrant domestic tube
industry we employ tens of thousands of
people provide income levels far
superior than the minimum wage victory
is touted of late in addition our
industry consumes over 20 million tons
of flat rolled steel produced in the
United States to sing the largest
category so if we go out of business
they go out of business
imports have dead
Sumida our industry resulting in the
closure of a host of pipe and tube mills
and throwing thousands of work in the
first quarter of this year imports in
all pipe and tube categories exceeded
60% of domestic consumption with some
categories rising above 70% and higher
it would be the epitome of folly to
allow our nation to continue to permit
imports to grow putting US producers out
of business and making our country
vulnerable due to its reliance on
foreign producers in China Korea Vietnam
and elsewhere
my company strongly supports in the form
of duties and quotas trade remedy cases
have not addressed the problem when
Fraley traded imports and massive torn
over capacity third country dumping is
rampant in our industry and a strong
response is essential to ensure ongoing
viability of our industry we have to
break the cycle of dependency on
imported pipe and - and the only way to
do that is by drawing a hard line to
prevent the cheating that will
undoubtedly go on even with quotas if we
allow our domestic industry to disappear
we'll only have ourselves to blame for
placing our country in an extremely
vulnerable position we have the best and
most efficient steel and tube producers
in the world we should make it hit here
and put America first thank you thank
you sir we're ready for our next speaker
thank you
good morning mr. secretary
good morning to all the panelists my
name is Denny Oates I'm chairman
especially steel industry of North
America also known as SSI na I'm also
chairman president and chief executive
officer of Universal stainless and alloy
products SSI na is a Washington dc-based
trade association representing virtually
all continental specialty metals
producers which would include high
technology high value stainless and
other specialty alloy products SSI a
membership includes almost all North
American manufacturers of stainless
steel and nickel-based alloys including
super albums other specialty metals such
as titanium and titanium alloys
zirconium niobium alloys are also
produced by SSI NA member companies
there can be absolutely no doubt that
the domestic specialty metals industry
is critical to the national defense
attached to my testimony is a report
entitled specialty metals and the
national defense this report summarizes
the contributions of the specialty
metals industry to the national defense
also attacks a press release issued when
that report was made public the report
proves unequivocally that specialty
metals are vitally important to
virtually every US military platform
without these specialty metals the US
military homeland security forces would
not have the ability to fight a war
defend our borders or protect our
citizens from terrorism the press
release quotes then acting deputy
undersecretary of defense Gary a pal who
said and I quote there is no question
that specialty metals are critical to
the national defense and the u.s.
specially metal metals industry is a
very important supplier of these
materials to various defense contractors
and myriad defense programs will be
negatively impacted by specialty metal
supply disruptions furthermore
Department of Defense studies provide
further evidence of the critical
importance especially metals to the
national defense a series of reports
entitled defense industrial base
capability studies clearly show the
applications which contain specialty
metals which are essential to meeting
national defense requirements and are
critical components of technologies that
focus on 21st century warfare a key
concern however is that the domestic
specialty steel industry must be healthy
and profitable in order
apply the critical defense applications
simply put the survival of the industry
is dependent upon the core commodity
products produced by our members this
includes basic stainless steel in the
form of sheet and strip plate bar rod
engine and billet the specialty steel
industry cannot exist simply by
producing materials for defense
applications while it's difficult for
the specialty metals industry to
identify the exact percentage of our
total production which goes to specific
defense applications because many of our
sales go through service centers were
distributors before they reach the end
user a reasonable estimate would be
about 10% if civilian applications which
play essential supporting roles for
defense such as aircraft highways power
plants and related markets are
considered the percentage is much larger
perhaps as much as 50% let me be clear
the specialty steel industry could not
abandon manufacturing in the United
States and focus on technology
development simply doesn't work that way
technology development travels with the
manufacturing process our steel mills
basically are our laboratories it would
be an a Eve to think that manufacturing
these materials would be transferred
abroad to countries like China while
technology development remained in the
United States it wouldn't work import
competition has taken a serious toll on
US producers in the 1970s there were
approximately twice as many specialty
metals producers in the US as today we
have battled unfairly tree unfairly
treated imports for decades we have
filed and won many any dumping and
countervailing Duty cases the Commerce
Department in the US International Trade
Commission reached the Furman of
findings in any dumping case last year
against imports of stainless steel sheet
and strip from China we constantly
monitor develop monitor developments in
the products determine whether
additional trade cases should be filed
as I believe all of you are aware there
is tremendous over capacity worldwide to
make stainless steel china alone has
excess production capacity equal to
twice the size of the entire US market
that's excess production capacity equal
to twice the size
to our us part and it remains to be seen
whether China will cooperate with the
rest of the world in the global steel
forum simply to develop a database
demonstrating current production
capabilities global overcapacity endemic
dumping and foreign government subsidies
all pose direct threats to the US
producers and an associated threat to
our ability to provide the critical
materials that are essential to national
defense in conclusion let me express my
sincere in our industry sincere
appreciation for the efforts of the
administration to recognize the threat
to our national security and to
undertake this investigation to
determine how to deal with this very
vital problem thank you very much for
having us thank thank you for your
remarks we're ready for our next speaker
good morning mr. secretary members of
the panel I'm Terry Hartford vice
president of defense for Allegheny
technologies incorporated ATI is a
us-based manufacturer of advanced
specialty materials including
nickel-based alloys super alloys
titanium alloys and stainless steels
these metals are the building block of
our defense industrial base ATI is one
of the largest and most diverse
specialty metals and components
manufacturers in the world virtually
every major military aerospace and
helicopter platform contains an ATI
specialty steel or a vacuum melted
nickel based alloy or titanium alloy
including the Joint Strike Fighter the
f-18 the Apache Blackhawk and Chinook
helicopter programs our materials are
also utilized in the production of
land-based military vehicles such as the
Abrams tank naval vessels in their
nuclear propulsion systems missiles and
rockets armor and munitions the
applications of these materials are wide
reaching and in many instances these
materials are soul sourced and not
substitutable many of these applications
involve the use of proprietary materials
that we have developed directly with the
department's of Defense the Air Force
and the Army these are not off-the-shelf
items in fact it is their superior
performance under the most severe
operating conditions that enable our
defense systems to function at eye level
zuv performance and reliability ATI
applauds the administration's
willingness to study the relationship
between steel imports and national
security in this investigation to
understand that relationship however
requires an understanding of the
operations of companies like ATI
that are leaders in the development of
specialty metals that will power our
military into the future ATI grew
through investment technology
development and innovation into the
diverse specialty metals producer that
it is today a core business segment
however is stainless steel production
like most US specialty steel mills the
ability to sell stainless steels into
the commercial market requires us to be
cost competitive to sustain
our business companies like ATI cannot
exist simply by producing materials for
leading-edge defense applications the
production of materials for all defense
applications represents in our case
about 10 percent of our production thus
the future of the industry is dependent
on the viability of all of its
businesses not just defense related
production the equipment used to make
materials for defense applications is
the same as the equipment used to
produce materials like stainless steel
for large volume non-defense
applications including infrastructure
projects it is the efficiencies provided
by these larger volume non-defense
related businesses that sustain the
development and production of
leading-edge specialty metals for
defense applications the economic
welfare of our high volume stainless
steel operations directly impacts our
ability to serve the needs of national
defense it is in connection with these
operations that imports directly affect
our ability to serve the nation's
defense needs for more than 40 years the
u.s. stainless steel market has been
targeted by unfair imports over that
period we have made significant
investments and also relied on the trade
laws to respond to these challenges from
illegally traded imports most recently
ati and the other stainless flat rolled
producers were forced to confront a
Chinese state-owned juggernaut whose
stainless production capacity is nearly
eight times the size of the US market
and who has excess capacity which is
more than double the size of the US
market the recent import surge from
China between 2013 and 2015
created conditions in the stainless flat
world market that forced ati to close
our Midland Pennsylvania facility in
2015 with the loss of hundreds of jobs
through the use of the trade laws we
were able to obtain anti-dumping and
countervailing duties against China that
should restore temporarily some fairness
to the marketplace but this remedy came
after the closing of our Midland plant
the fundamental structural problem of
over cap capacity however remains and
continues as a direct threat to our
putting 80s revenues come primarily from
commercial markets complemented by
significant positions in defense ATI
recently invested 1.2 billion dollars to
build the world's most advanced hot
rolling and processing facility in
Brackenridge Pennsylvania we will be
processing some of our most
sophisticated specialty alloys at that
facility many of which will be the
foundation of our future military
programs the new mill however will to
operate profitably and efficiently needs
to be able to produce stainless steel in
commercial volumes if our commercial
markets continue to be victimized by
unfairly traded imports we will not be
able to operate our mills at a level of
profitability and return on investment
that will permit us to invest in the
research and development and the high
performance metal metals so critical to
our national defense this investigation
must recognize the linkage between our
national defense needs and result in a
remedy that enables our specialty metals
manufacturers to achieve the returns on
investment in the commercial markets
that will support support the rd of high
technology specialty materials that are
vital to our national defense
this means targeting the fundamental
issues of overcapacity and unfair trade
that have played plagued our commercial
stainless steel markets without doing
harm to the existing trade laws as well
as the domestic sourcing requirement for
specialty metals that has ensured a u.s.
source of critical materials necessary
to meet our military needs thank you
very much thank you sir we're ready for
our next speaker
good morning deputy secretary Borman and
members of the panel my name is Lorenzo
Gonsalves and I serve as chairman
president and chief executive officer of
cliffs Natural Resources a company were
headquartered in Cleveland Ohio
thank you for the opportunity to speak
here today during its 170 years of
existence cliffs has been the largest
supplier of iron war to this to Muse in
the United States we currently own and
operate four of the seven active our war
minds in the country directly employing
approximately 3,000 Americans in stark
contrast for the Australian our war
mines which almost entirely produce and
sell our war sinter feed fines to China
and other countries cliffs operations in
the United States exclusively produce
our war pellets while our war finds feet
center operations that contribute
immensely to the well known air
pollution problem in China the pellets
we sell to our domestic clients make the
Americans to industry one of the most if
not the most environmentally friendly in
the entire world
Chinese non-compliance with minimum
environmental standards is the most
absurd unfair and unacceptable advantage
the Chinese have in exporting their
excess steel I would speak today both in
my capacity as cliffs chairman and CEO
and from decades of experience in this
new industry prior to joining cliffs I
served as CEO of two other American
companies metals USA hold it's a leading
national his to service center company
and California's two industries the
biggest is to supplier on
west coast of the United States in light
of my 10 years at metals USA in my
active role in the previous cases under
sections 201 and 2/3 - back in 2001 when
I was at California
I would like to confront a very
important part of the problem that has
never been properly addressed and which
is now a full-blown crisis the problem
is the role played by some domestic
service centers and these two buyers as
enablers of the entire steering port
crisis by providing a home within the
United States for illegals to import
dump these two products do not find
their way to this country they
spontaneously nor do this imports whim
to us Shores average to product that
enters the country is brought here
because I still trader distributor
service center or end-user will buy or
already bought that still some is Tobias
traders and service centers by design
acquired dumping and illegally
subsidized steel and in many cases
intentionally circumvent duties and
tariffs assigned to his two products
this bad players know exactly what they
are doing but they do it anyway because
they feel they are beyond rich as
evidence emails sent from traders to his
to buyers in the United States offering
to navigate around duties applied to
stew from China and South Korea have
been submitted along with the written
version of my remarks let it be clear
any American company or individual who
is complicit in such a scheme must be
held accountable these two buyers are no
different than recipients of the stolen
goods after a robbery
while these recipients did not directly
perpetrate the initial crime
it is known as the lesson of fence to
nominally acquire stolen goods their
only real concern is not to be caught
they do not care that artificially cheap
the products negatively affect the
health of the domestic iron industry
industry and by extension the military
readiness of the United States while not
all service centers and these two buyers
act as domestic enablers of illegal
trade the ones providing dumped and
circumvented these two products a
destination within the United States
must be punished any real solution to
our important crisis must include a
commitment by the federal government to
directly confront the American companies
and individuals that facilitate the
trade of illegals to imports by ensuring
that these products find a home within
the United States in closing I would
like to remind the panelists that the
worst enemy is the one that pretends to
be a friend some of these perpetrators
use a speech very similar to ours
despite their actions if any of these
individuals do have the courage show up
here today please ask them if importing
illegal steel is part of their business
model and if so why they continue to do
that I am sure that they will not accept
accountability because they're illegal
short-term profits are a lot more
important to them than the military
readiness of the United States thank you
once again for the opportunity to speak
here today thank you for your testimony
I think at this point we'll take a
10-minute break
so reconvene at 11:50 with mr. Adams as
the next speaker all right so 10:50
you
[Music]
it's closing sir
[Music]
all right thank you very much for
returning to your seats so quickly we
are going to reconvene if everyone we
can close the doors please we will
reconvene now for second half of today's
hearing thank you once again for joining
us
[Applause]
thank you all very much
mr. Boorman
okay why don't we proceed with our next
speaker mr. Adams see here he is here
thank you you're already up there good
good morning mr. secretary distinguished
panelists thank you for the opportunity
to share my views on the effects of the
national security of an imports of steel
I applaud the administration's
initiation of this section 232
investigation as a 30-year retired
Brigadier General of the United States
Army with a background of strategy and
intelligence and as a lead author of the
2013 study of the u.s. defense
industrial base remaking American
security my experience and research
convinced me that imports of cheap and
subsidized steel from our strategic
competitors put our nation's security at
risk by eroding the u.s. steel
industry's position as a fundamental
building block of our national security
infrastructure are therefore advocate
concerted action at all levels of
government to preserve a strong domestic
steel industry our nation's security
rests on a military equipped with the
technology weapons systems and platforms
needed to protect our nation
supplemented with logistical and
critical infrastructure from
nuclear-powered submarines to aircraft
carriers and from main battle tanks to
mine-resistant vehicles steel shields
our nation and the lives of our warriors
a healthy domestic steel sector
including the many small and specialty
manufacturers that depend on steel is
critical to sustaining the capabilities
needed to preserve our national security
the glut of low-priced steel in the
world market resulting in large part
from China's Russia's and other
potentially hostile trading partners
actions undermines the ability of
american-made steel to fairly compete in
the marketplace left unchecked the
current steel market situation will
continue to result in plant closures
mass layoffs and the loss of key
technology and manufacturing know-how in
this insecure world the need to build
more defence
forms in a hurry they come sooner than
we would like as China expands its
global presence a situation in which
China exercises market control over
global steel these are the all the more
alarming there is more to this issue
than lowest-cost is best while low
prices for steel can reduce defense
acquisition costs irreparable damage to
our domestic steel industry and loss of
our steelmaking capacity will increase
defense industrial base dependency on
China and other potentially hostile
governments it is a myth that steel will
always be available for us defense
requirements domestic steel makers
health depends on the health of their
commercial sectors conversely the
overall health of domestic steel makers
is not contingent on defense production
if the commercial market is disrupted
the defense production sector cannot
survive reliance on foreign sources of
steel especially from strategic
competitors results in uncertain supply
for critical national requirements
especially in a crisis in 2004 on duty
in Iraq I witnessed our warriors applied
jury-rigged armor plates often sent by
their families to their vehicles to
protect against IEDs
when DoD asked foreign suppliers to
up-armored American vehicles they put
our requirements in their months long
queue only American steel companies
subject to rated orders scheduled in
weeks rather than months supplied armor
plate for the up armored vehicles that
protected our warriors from IEDs we must
take urgent action to address these
risks take aggressive action to
safeguard America's economic and
national security by recommending resin
remedies to the president that will
yield a meaningful opportunity for US
producers to recapture lost market share
and rebuild
broken supply chains take a broad view
of steel products that are necessary for
our national security well the first
products that come to mind or ships and
tanks we must also consider and include
steel used to construct America's
logistical and critical infrastructure
everything from our electrical grid and
transformers to real networks and
underground water systems focus on the
entire supply chain include
everything from iron to semi-finished
steel products the semi-finished steel
slab constitutes roughly 90% of the cost
of a finished hot rolled steel product
thus allowing for the importation of
foreign slabs despite a 232 safeguard
remedy could undermine the goal of
stabilizing protecting steel production
we must ensure that the entire supply
chain of iron and steel making in the
United States benefits from actions
resulting from this investigation we
must establish enforceable mechanisms
for the elimination of global
overcapacity in the steel sector and
implement rules to counter
anti-competitive behavior of state-owned
entities especially in China we must
proactively apply our trade enforcement
laws to provide relief from market
distortions before plants are forced to
close and capacity is irreparable lost
we must rigorously apply domestic
sourcing policies in our procurement
government procurement of steel our goal
is to maximize domestic capabilities
combined with supplies from
unquestionably reliable foreign partners
the one supplier in whom I have complete
confidence is Canada not only do we
currently have a steel surplus with
Canada but we share a border and have
synergistic economic and national
security interests however treating
Canada as a unique partner under any
Section 232 relief measures requires
that Canada also align its trade
enforcement efforts with ours mr.
secretary I applaud the administration's
initiation of this section 232
investigation and is indicated to
recommend actions to adjust steel
imports so that they will not put our
national security at risk
we need concerted action to address the
risks to our domestic steelmaking
capacity before we lose it
especially for our most dangerous
long-term strategic competitors and to
ensure that the u.s. steel industry
remains a strong and ready foundation
for our national security
thank you sir thank you for your
testimony if I could ask what questions
just for some of those who may not be
familiar could you give us a quick
summary of what a rated order is for
those who may not be familiar with that
generated order requires the American
producer
to bump the US defense requirement to
the front of the line so it's a it's it
is a it's a safeguard in itself it
allows the producer to advance steel
armor plate for example right to the
front before all the other other orders
that they've already received okay thank
you for your testimony I'm ready for our
next speaker and while our next speaker
is coming up we've moved our timekeeper
right up here to the front row so if the
speakers could keep an eye when you see
the yellow sheet up you're at one minute
and when you to the red sheet you're at
your five minutes morning secretary
Rossum panel I'm John stop president and
CEO of Brothers Inc and CEO of stuff
Corporation our steel pipe manufacturing
division I also represent the American
line pipe producers association alpha
I'd like to thank you for this
opportunity to testify today and explain
how imports of large diameter line pipe
threaten the u.s. national security
stuff was founded in 1856 and has been
supplying products that the US military
since the Civil War
back then it was iron planning for
gunboats that helped secure the Lower
Mississippi during World War one stuff
provided fabricated steel sections for
maritime vessels and during World War
two stuff Bill Bailey bridges and LC
tees we also make bomb bodies which is a
rated product for the Air Force and Navy
beginning in the early 1970s and
continued to make those products today
in 1952 stuff again manufacturing pipe
in Baton Rouge Louisiana to supply
invasion pipe to support the Korean war
effort we then turned our efforts to the
energy business and made significant
investments over time including adding a
coating plant in 1994 and in 2009 we had
another high taking facility stuff is
strongly committed to producing the
highest quality line pipe and has done
so for decades while also exclusively
using domestic steel stuff together with
American steel pipe Berg pipe and Durham
bond make up alpha a domestic coalition
of large diameter line pipe
manufacturers together we account for
the vast majority of large diameter line
pipe domestic production our members
produce for a number of US national
security applications including for oil
gas jet fuel chemical water and slurry
pipelines all which are vital for our
infrastructure we also produce specific
products for US strategic defense
including steel bridges and munitions we
are proud to produce steel products and
protect our citizens and critical
infrastructure
however unprecedented Global's steel
overcapacity and a continuing surge of
pipe imports made from dumped foreign
steel are threatening our ability to
continue this section 232 investigation
comes at a pivotal time the domestic
steel industry faces a growing import
crisis driven by global over capacity
this affects line pipe as well as
governments in China Korea and Turkey
and elsewhere have provided their
producers with massive subsidies to
expand capacity and production foreign
excess of their demand resulting in a
severe supply cot the large diameter
line pipe industry and our domestic
steel suppliers are being directly
harmed as a result this is not just a
China problem we face damaging imports
of line pipe from Korea which now has
well over 20% of the US market Japan
where imports have almost doubled as
well as Turkey and many other
sources the harm is evident from our
drastically reduced production revenue
investment steel purchases and
employment in 2015 which was a strong
consumption year the domestic industry
was operating at well below capacity and
in 2016 conditions became much worse the
industry is now operating in at less
than 30 percent of capacity this is
unsustainable
and it directly threatens our national
security our alpha members have been
forced to idle their mills and
dramatically reduce their workforces
u.s. national security implications are
substantial the industry is losing its
ability to produce large diameter line
pipe needed to modernize the aging
infrastructure without a healthy and
prosperous steel and pipe making
industry the u.s. could not replicate
the big inch and little big inch
pipelines that fuel the Allied victory
in world war ii thank you thank you for
your testimony ready for our next
speaker
good afternoon
secretary Ross and members of the panel
thank you for the opportunity to speak
at this hearing my name is Ryan Chadwick
and I'm the vice president and general
counsel of tmk EBSCO tmk EBSCO is one of
the largest producers of steel pipe for
the energy industry in the United States
our energy related products include oil
country tubular goods and line pipe up
to 16 inches we also produce standard
pipe industrial pipe and structural
steel products tmk ebsco has 1.6 million
tonnes of annual steel pipe producing
capacity at our facilities in
Pennsylvania Kentucky Ohio Arkansas Iowa
Oklahoma Nebraska and Texas
approximately 75% of our pipe production
capacity is for welded pipe the
remainder for seamless pipe tmk ebsco
currently employs one thousand three
hundred and seventy employees of these
facilities and at its headquarters and
R&D; facility in Houston Texas at full
capacity tmk ebsco would employ over
2,600 individuals in the United States
according to the US Energy Information
Administration net imports of petroleum
products account for 25% of u.s.
consumption of petroleum and u.s.
natural gas production is equal to about
99 percent of US natural gas consumption
our country has made great strides on
the path to energy independence however
dependence on imports of steel pipe to
support this critical energy
infrastructure leaves our country less
able to independently provide for its
energy needs and less secure our
pipeline infrastructure as well as aging
with much of it installed prior to 1970
we must have a secure supply of steel
pipe to repair and maintain this
pipeline infrastructure over one third
of electricity generation in the United
States
powered with natural gas increasing the
need to assure the security of steel
cyclones steel pipe supplies to support
the transmission of natural gas to these
generation facilities total steel pipe
production in the u.s. is approximately
10% of total steel production in the
United States by tonnage a healthy
domestic steel pipe industry helps
ensure a healthy domestic steel industry
after final ad and CBD duties were
implemented in 2010 against Chinese
steel and steel pipe Chinese steel over
capacity was redirected to other
countries such as South Korea after 2010
we saw a steady increase in imported
steel pipe manufactured by foreign
companies able to take advantage of
reduced steel prices caused by steel
overproduction at unprofitable Chinese
companies by 2013 producing welded pipe
became largely unprofitable for tmk
ebsco and many other domestic producers
the gap between US and Chinese hot
rolled prices expanded to as much as 340
dollars a tonne last year and as of May
11th this year was 266 dollars a tonne
the Chinese steel coil prices warped the
world's steel market outside the United
States lowering prices to well below the
US oil price it is very difficult and
often impossible to compete with foreign
steel pipe producers that have an
advantage such an advantage and lower
input costs in some instances foreign
and steel pipe has been priced close to
the prices for domestic steel coil if
the status quo is maintained many of the
steel pipe production facilities in the
United States particularly for welded
pipe will remain or become money losing
operations if the administration takes
action on imported steel under Section
232 and does not take action on the
imported steel pipe the resulting influx
of cheap steel pipe imports is likely to
drive many domestic
juicers out of business because there
will at the same time be a significant
increase in US Steel oil prices for
domestic steel prices both tmk EBSCO and
a strong consensus of the u.s. steel
pipe industry at the CPI annual meeting
last week in Washington DC agree that
quotas rather than tariffs only might be
a better choice for relief under Section
32 please consider whether these quotas
should be based on 2010 and 2011 levels
of imports a period after relief from
massive Chinese imports and before the
onslaught of imports from many other
countries thank you thank you for your
testing and we're ready for next speaker
[Music]
good afternoon thank you for this
opportunity my name is Tim Jones vice
president of manufacturing for nippon
steel and sumak and cold heading wire
Indiana Inc we say NSC I an sei is a
newly established manufacturer of steel
wire or automotive cold heading and
forging processes located in Shelbyville
Indiana NSC is scheduled to open in
October of 2017 and begin production of
steel wire starting in January 2018
this is an exciting opportunity for us
in our community the then governor mr.
Mike Pence was so excited to speak at
our groundbreaking last summer when
fully operational NSC is production
facility will directly employ
approximately 70 people in Shelbyville
an sei is unique in that it will not
follow others by simply importing
finished steel wire from Japan rather
the company will import the raw material
that is high-quality wire rod from Japan
and produce finished steel wire in the
United States however in order to do so
NSC I needs access to a reliable supply
of high-quality Japanese steel wire and
NSC I if an SDI is not able to import
these materials the company will be
forced to shut down because the wire
quality needed for the production of
fasteners and other safety critical auto
parts can be achieved only with the high
quality wire rod available from Japanese
manufacturers the quality of this wire
rod produced by the Japanese
manufacturers is unavailable in the
United States in short Japanese wire rod
is superior to wire rod produced
elsewhere because only the Japanese
manufacturers have demonstrated the
ability to consistently meet the
precision and performance requirements
of fastener and other safety critical
auto part manufacturers these downstream
manufacturers require wire rod that is
both extremely durable but also
lightweight the Japanese wire rod
manufacturers are uniquely able to meet
these contradictory requirements due to
their advanced methods of controlling
for surface defects inclusions and size
tolerances in sei intends to win
business from its downstream us
customers based on the quality and
reliability of our products import
duties on wire rod from Japan will
compromise the viability of our business
and lead to the elimination of many jobs
in Shelbyville in the surrounding area
further such duties would cause serious
damage to automobile and fastener supply
chains in the United States potentially
affecting the jobs of thousands of
people throughout the country to block
imports of Japanese wire rod will simply
lead to the export of US jobs and the
import of finished products we make here
for these reasons I urge you to find
that Japanese wire rod is integral to
the US economy and that such imports do
not compromise the national security of
the United States good thank you for
your testimony good morning my name is
of young belly I am president of
industrial America located in Greenville
Alabama
Hyundai Motor Manufacturing Alabama LCC
WA hmm a is yes automobile manufacturer
located in LA Varma Kia moto
mentoring Georgia came mg is the u.s.
automobile manufacturer of locating
choosier thunder still operated steel
processing center in Alabama that
precedes
hold role and corazon recent steel for
hmm a came mg and photo supplier of Tata
those companies all three companies are
applicable of Lee Aikido with the
understeer of a Korea or Korean produce
over various steel products
Hyundai has invested about 2.8 billion
dollar industry establishment with a
plan of a future
investment over 3.1 billion dollar hmm a
employee 3500 American workers and kmg
employs 3000 American workers in 2016
hmm hmm gee creator of purchases 378
thousand metric tons of cold rain
curtain resistant steel 108 thousand
metric bones were purchased from
domestic steel producers and 270,000
metric tonne were imported from Korea
and Japan Thunder still America is the
sterile processing center and they still
employ 170 70 employees going forward
and they still plan to purchase about 40
percent of a whole drawer and person
essence field from domestic still
produce the balance will be imported
from Korea and Japan and other source
hmm a kmg helped to plan to invest about
3.1 billion in upgrading and expanding
the u.s. mentoring operations
the investment in this automobile
facility or based on the assumption that
hmm a kmg would be able to purchase a
high-quality Cauldron horizontal
distance steel from domestic and
imported source
roughly 10% of understeer requirement
are not available from domestic steel
manufacturing indoor quality and
Polaroids of requirement turn this
across to still in written by this
action this lecture notes written by
investment already made by hyundai as
well as doe planet investment for
Autobot America right hmm a and K mg by
par most important petrol in purchasing
colder and colder later on still product
quality product
uniform you
hmm hmm deep rapport purchase from us
supplier we are the steel is available
and meet these quality requirements both
hmm a hmmm GE requirement increase
quantity of advanced high-strength steel
and ultra high-strength steel these
high-strength still are difficult to
produce and not all the material used to
produce these qualities in the
dimensions and total tolerance demanded
by kmg hmm a the investment in AMG hmm a
and Hyundai steel cable increased
employment and provide jobs and economic
activity in the common community
communities we are there are located
that previously did not exist at the
same time this investment Demento
ability to also access high quality in
portable hold role and coordination
skills as note some of this grade and
quality are not available from us
producers use existing trading lemon law
or LED for they protect the domestic
steel industry although restriction ana
necessary thank you for your testimony
ready for our next speaker
Thank You mr. chairman I'm Gary orlich
on behalf of AI is our 108 members
include steel importers steel exporters
railroads port authorities unions
stevedores and many other logistical
functions three points first the best
indicator of the future of the American
steel industry is where sophisticated
investors put their money one group of
investors just opened two brand new
steel mill 1.5 million tons actually a
little more in Arkansas having spent a
billion dollars you've already heard
this morning about other new facilities
being opened this is not an industry
that's going to disappear second the use
of section 232 must be treated with
extreme care conventional wisdom is that
it's only been used twice both of those
were minor uses in the 70s the only real
use was once 1959 to 1973 the u.s.
solely to please important domestic
politicians put import quotas on the
import of crude oil from that period
when that men had three direct
consequences first we pumped out our own
reserves by 1973 we were a net importer
having always always been a net exporter
and just in time for the oil embargo
thank you policy failure second during
that 14-year period American industry
companies like steel mills paid 50 to 75
percent more for crude oil than their
competitors in Europe and Japan and we
didn't get a thank you note I had major
competitive influence third somewhat
unanticipated the first who could have
been foreseen was that we gave Canada a
close ally an exemption the minister of
oil from Venezuela then a close ally
flew to Washington and
1859 and said give us an exemption we
said no he didn't go back to Caracas
he flew straight to Riyadh and founded
OPEC so there's a cautionary tale for
use of 2:32 that was under a prior
statute I think it's 252 but I'm not
sure third finally your analysis of
national security has to include the
near certainty of retaliation because
there will be retaliation
the most obvious target for retaliation
is u.s. arms exports we export
approximately 20 billion dollars a year
numbers are fuzzy and lumpy so it's a
rough guess there are lots and lots of
competitors out there who would love to
sell their airplanes instead of ours and
that's probably the most likely target
defense production in the US depends
completely not for economics on foreign
sales without the foreign sales none of
the projections worse works the cost of
the planes goes up so the next obvious
target is us agriculture there are of
every major crop in the US depends on
exports for its economic viability the
there are over 600,000 very extended
families producing cattle in this
country several hundred thousand
producing pigs hundreds of thousands
more corn wheat soybeans etc they have
been the targets of retaliation they
will be the targets of retaliation if
you're looking at the national security
of the US please include food thank you
thank you for your testimony
good afternoon mr. secretary my name is
Robert bud white on the president of the
can manufacturers Institute on behalf of
the metal cam manufacturing industry
thank you for giving us the opportunity
to testify on Wyatt the Commerce
Department should exclude template from
tariffs or other restrictions IRS relies
on a mix of domestic and imported steel
the important employed steel is subject
to a tariff or restriction our history
and our American workers will be at a
severe competitive disadvantage
it's important to note that see my
member companies employed ten thousand
American workers who produce twenty four
billion
steel cans annually the cam
manufacturing industry is responsible
for thirty six billion in total economic
activity pays 1.7 billion dollars in
taxes federally and 1 billion in state
taxes template steel is a unique type of
steel does predominately made for chemic
approximately 2% of all steel is
template the US Department of Commerce
and the ITC recognized template Steel's
a separate category requiring its own
consideration and examination please
note template is not used in any defense
for national security applications
tariffs or trade restrictions against
Tim coated steel have a severe economic
impact in our industry in our us-based
magic factor to employees the dominant
issue is us template steel production
does not meet domestic demand in 2016 US
demand was 12.1 million tons while
domestic supply was 1.2 million tons
this means only 58 percent of domestic
demand can be met by US template
producers there's been a noticeable
decline in the quality of domestic
template the rejection rates
domestically produced template are
approximately 300 percent to five
hundred percent higher versus our
foreign suppliers additionally only 50
percent of domestic steel deliveries are
on time the possible tariff restriction
would harm or interfere versus competing
packaging materials which are not
subject eros even a small increase in
the price of our raw materials will
create a destructive competitive
disadvantage forcing possible closures
of can manufacturing plants in the US
and negatively impacting the 10,000
workers there
families and communities one could
easily foresee we're finished cans are
even filled cans with food product made
overseas could be imported at a lower
cost and US produced cans finally let me
say the vast majority of Steel cans that
we manufacture are used for canned food
which are was an affordable solution for
feeding our country X access to
affordable nutrition is vital for 42
million Americans that live in food
insecure households including 13 million
children those in government food
assistance including the USDA SNAP
program formerly known as food stamps
consume canned fruits and vegetables
have even higher rate than the average
American and it cost 20 to 50 percent
lower tariffs or trade restrictions
would have a harsh consequence on those
less fortunate and diminish the value of
that of taxpayer-funded federal food
assistance programs we are confronted
with a US template steel industry that
delivers significantly lower quality
ships chronically late is an ism able to
satisfy us demand we really have no
choice but to turn to foreign suppliers
the American can manufacture industries
requests the administration exclude
template products prints investigation
and any future tariffs or actions thank
you thank you for your testimony
we have our next speaker who should be
Tracy norburg
thank you good afternoon mr. secretary
and distinguished members of the panel
I'm pleased to be here today to share
with you the unique perspectives of the
tire manufacturing industry I'd like to
first just take a quick minute and
explain the initial submission that we
made identified our organization as the
rubber Manufacturers Association
coincidentally we changed her name
yesterday which is sort of an unique
timing issue but we are today the u.s.
tire Manufacturers Association and so
the testimony that I have submitted
today reflects that new branding the US
EMA represents the ten manufacturers
with manufacturing operations here in
the United States in order to be a
member of our trade association indeed
tire manufacturers need to manufacture
here our members include Bridgestone
Americas Incorporated Continental Tire
the Americas Cooper Tire and Rubber
Company the Goodyear Tire and Rubber
Company humo tires USA michelin North
America Pirelli North America the Coon
I'm sorry Sumitomo rubber industries
Toyo tire holdings of America and
Yokohama Tire Corporation in the United
States our members employ over a hundred
thousand workers operate fifty five
manufacturing plants and operate in
nineteen states we generate over 27
million dollars in annual sales here in
the US I was particularly interested
that secretary Ross asked Testim cokes
testifying today to identify areas that
could be exempted from this
investigation and I would ask that you
consider exempting tire cord quality
wire rod from this investigation due to
the unique manufacturing and quality
performance requirement that tires have
and I'd like to explain that to you
today
tire manufacturing this is vital to the
US
economy both in civilian and military
applications millions and millions of
Americans and millions of tons of goods
each day we rely upon tires performing
safely across the country our members
have a direct interest in this in this
investigation because of the steel that
we use in our tires virtually all of the
steel wire rod that's consumed entire
manufacturing is actually manufactured
not domestically but is imported due to
the unique needs of tire manufacturers
for a high-quality carbon steel product
that is free from defects and can add
unique strength and performance
properties to tires it is our
understanding that domestic steel mills
cannot meet these requirements today and
it is vital for the entire industry that
these materials continue to be imported
for our products depending on the
outcome of this investigation potential
remedies could have a significant impact
on the domestic tire manufacturing
industry in particular any activity or
any restriction that curtails the
availability of the supply of tire cord
quality wire rod or bead wire could
negatively affect the ability of the
u.s. tire manufacturing industry to make
tires here any such trade constraint
could potentially have a cascading
negative impact across the US economy
our products are used to transport goods
and services throughout this country and
in addition the US military depends on
the tire manufacturing industry to
supply tires to protect our national
security
tires contain a number of highly
engineered components including high
carbon steel as I mentioned the steel in
tires is manufactured to very strict
specifications and must be meet these
specifications in order to ensure the
strength durability on air retention and
other requirements of the tire this tire
rod contains a point eight percent of
minimum carbon content has a low alloy
content and is it has a very low small
diameter and generally free of surface
defects the high carbon
as concern and consistent surface
quality are required to assure
performance of tires to stringent
requirements all types of modern tires
contains steel and actually truck tires
contain a greater percentage of steel
due to the higher load and durability
requirements of truck tires military and
related vehicles of course also have
demanding performance requirements and
we ask that these materials be
recognized in your investigation tires
are actually certified to meet very very
stringent requirements in the United
States they're widely recognized as
being the most stringent tire standards
in the world these tire standards
require that tires us perform very
durably over an extended period and in
fact with very low air pressure required
so the tires we make here today must
have this steel in order to perform
safely both for our military and
civilians given that unique needs of
tire manufacturers we ask that you
exclude tire poor quality tire cord
quality wire rod from this investigation
recognizing the unique needs of a
domestic manufacturing thank you for
your comments we have the next speaker
please our question oh sorry
the last couple of speakers that have
mentioned that is not available US
production capability and capacity to
make those products I bench to hear
afterwards from the producers US Steel
Nucor and others that do make steel here
if they think they can make steel for
your products or canning or other
speakers who spoke about the lack of US
production capability and capacity I
think this issue has been well
understood in the anti-dumping context
and in fact tire cord quality wire rod
was excluded from the investigation in
2001 due to these unique performance
requirements in the end
the US domestic industry chisel okay
yeah bitch and hearing from the US
manufacturers about that thank you thank
you
secretary ross and honourable members of
this panel my name is Susie agar and I'm
with Adi the air distribution Institute
adi is a nonprofit organization that was
formed in 1947 to promote steel products
and fittings for the heating venting and
air-conditioning industry currently
there are 16 members within our
organization who run over 36
manufacturing facilities throughout the
United States
we proudly employ over 5,000 full-time
workers and 150 part-time workers a key
product used by Adi members is light
gauge corrosion resistant steel commonly
known as core specifically we utilize
hot dipped galvanized steel and core
form which conforms to ASTM a 653 grade
C S type B it also has a zinc coating of
the most popular use of G 30 please note
that first and foremost the key products
we import are not in any way tied to the
national defense industry our products
are not used for armored defense
vehicles ships aircrafts or
infrastructure the HVAC products we
manufacture are predominantly used for
the housing industry and for the
construction of light commercial
buildings for decades domestic mills
have vacated the residential HVAC market
by choice because most domestic mills
are governed by a tonnes per hour pace
kill it's simply not profitable or nor
advantageous for them to produce light
gauge steel or aluminum rightfully so
they have focused their production on
fabricating heavier gauged metals these
metals are used for the appliance
automobile heavy construction tube and
pipe industries they are not favorable
because of the higher prices they
command but also because they are more
taxing to produce there is neither the
demand nor the desire for domestic mills
to produce light gauge metal
and aluminum the scarce availability of
domestic light gauge metals coupled with
the high prices they charge is directly
reflected in the average yearly totals
that adi members produce from the
purchase from domestic mills
approximately seventy seven thousand
tons of galvanized metal and nine
hundred and sixty tons of aluminum all a
100 one tooth thickness on a yearly
average adi members purchase
approximately 200 tons of these same
type light gauge metals from foreign
sources adi members also have a need for
multiple widths of steel there are many
types of steels that we purchase that
are currently available from only one
domestic mill within the united states
we would prefer to purchase from
domestic mills but due to restricted
availability and pricing we are
basically forced to find meals outside
of the united states many just choose
not to work with us because of the
tariffs already added from the 2015
anti-dumping lawsuit our members and
therefore our US consumers are already
feeling the effects of higher priced
steel additional tariffs and
restrictions from a second action will
drive prices up
domestically prices have increased
between 16 percent between 2015 and 16
and an additional 10 percent in 2017
alone we would anticipate a serious
disruption and probable scarcity of
metal if we were forced to buy higher
steel from either within or outside the
US this would also escalate the
probability of the housing industry to
seek alternatives to ducted HVAC systems
additionally Java's would be lost due to
the lack of demand for our affordable
products we truly believe and support
president Trump's initiative to prepare
America for adequate readiness in the
event of a national security event we do
not want our types of gauge metals to
interfere with domestic mills being able
to react quickly if there was a crisis
we're sympathetic to the intent of this
investigation however US manufacturers
like ourselves are truly in a unique
niche the production of light gauge HVAC
duct work and fittings we need rarely
accessible as well as reasonably priced
still we respectfully ask that you
exclude light gauge aluminum and
galvanized metals in the o1 o2 oh one
two thicknesses from the section 232
investigation we respectfully appeal to
the US government to give our industry
consideration by not imposing additional
tariffs adding restrictions or
prohibiting our ability to purchase
light gauge metals from foreign markets
Thank You secretary rose secretary Ross
an honourable panel thank you I do have
a question for you could you elaborate a
little bit on your statement that says
you have the members by approximately 77
thousand tons of galvanized metal and
aluminum from a domestic supplier but
then roughly 200,000 tons from foreign
sources and it said you testimony said
pricing availability but could you
elaborate on that we we sent a survey
out to the ADI members and asked them to
provide information on an anonymous
basis of how much they do buy
domestically in the Oh 100 1/2
thicknesses and then how much they also
buy from foreign markets so
significantly less on the domestic side
for the latter gauge and more from the
foreign but this gave it a to give you a
sense as to how much of that was price
versus availability it pricing was a
part of it for sure
and I would say readily availability as
well all right thank you okay we're
ready for our next week
good afternoon my name is John cross
president of Steel scape an American
company that manufactures coated and
painted steel for US companies Steel's
Cape has facilities in Washington state
in California together employing over
almost 400 men and women in productive
high-paying jobs if the president were
to initiative Institute broad-based
restrictions on steel imports it would
jeopardize the viability of Steel scape
itself and in the process threaten the
livelihood of 400 employees let me tell
you what steel scape the structure to
import the raw material that we use to
produce or coated and painted steel this
imported substrate is not only not
threatened the country's national
security but actually promotes it by
permitting steel scape a u.s. steel
manufacturer to participate productively
in the US economy steel scape has two
facilities one on the Columbia River in
Kalama Washington and one located in
Rancho Cucamonga California both
facilities produce coated steel products
but not from liquid steel our Klamath
facility transforms hot rolled coils
into cold rolled in galvanized coils
while our Rancho facility purchases cold
rolled steel to produce galvalume coils
both facilities also paint close to the
coated steel they produce a large
portion of steel escapes output ships to
steel to ASC profiles and affiliated
American company which uses our skill to
manufacture steel profiles and building
components for commercial and
residential use through the western
United States both steel scape
facilities need imported steel substrate
to make their coated products the
calamus site is located literally
alongside the Columbia River a deep
water port facility which allows
ocean-going vessels to discharge
directly from the dock to still escape
shortage our shipping costs from
Australia for example range from $60 to
$100 per ton less than rail rates from
US Mills east of the Rockies sourcing
steel from West Coast producers is also
problematic for us there are only two or
three suppliers of hot rolled steel in
the West Coast and they're focused on
supplying their own downstream needs and
customers the dynamics of the West Coast
market are such that all flat rolled
steel producers
the market have to import a large
portion of their raw material to use
from abroad steel scape is no different
steel scape is subject to another
structural restriction that prevents it
from purchasing raw material from us
Mills any steel substrate that Kalama
would buy from domestic suppliers would
have to arrive by rail which Kalama
cannot accommodate due to space and
capital limitations in addition
domestically produced steel does not
compete with imported steel for steel
escape substrate business steel scape
requires imported steel to survive as an
American producer of coated steel
products the proof of this is this last
year when the Commerce Department
imposed almost 30 percent dumping duties
on hot rolled steel from Australia steel
scape did not replace its Australian
opera steel with a single ton of
domestically produced opera instead we
imported out roll and cold rolled
substrate from other countries to meet
our needs
by doing so steel escape was able to
remain a going concern setting nearly
400 jobs and it's not only Steel's get
jobs that would potentially be at risk
as I mentioned much of steel escapes
production goes des SC profiles which
uses the coated steel to produce metal
building components if ASC could not
provide reliable high quality steel from
steel scape made from imported substrate
its operations and another 230 jobs
could be at risk the steel substrate
that Steel's came must import from
Australia and other countries does not
threaten the security the united states
steel industry rather it helps the
industry survive and prosper further
that steel is not for any defense or
national security use it's simple flat
rolled steel that we coat and paint ship
for use in commercial and residential
buildings throughout North America this
kind of Steel has no impact on the
United States national security
requirements steel scape in short needs
to import steel in order to produce
steel in the US we asked the Department
to consider the special situation of
companies such as ours companies that
depend on imported steel to survive as
American steel producers thank you thank
you for your testimony
good afternoon secretary Ross
distinguished panel my name is Jim tenet
I'm the CEO of hiyo coatings company or
OCC located in Yorkville Ohio which is
on the Ohio West Virginia border the OCC
is domestic US producer of tin plate
template products are used in food and
beverage cans paint cans aerosol cans
and other similar products whose CC
operates a world-class 130 thousand
square foot electrolytic template
manufacturing facility with a capacity
to produce 250,000 tons per year of the
highest quality template available
anywhere an OCC plant opened in 1997 it
was the first tin plating mill that was
constructed in North America in over 30
years
OCC employs 66 American workers who live
in Ohio and West Virginia those jobs in
the very survival of OCC as a u.s. tin
plate manufacturer are threatened if
imports of Tim no black plate the steel
substrate used to reduce template are
restricted as a result of this
investigation OCC is owned by TCC a
Korean producer of tin plate and s mark
the total investment to date and OCC is
80 million dollars the investment in
this mill and his continued operation
was conditioned on the ability to import
some of the black plate substrate
necessary to produce tin plate black
plate is especially still that was
developed and designed for the
production of tin plate it has no other
significant uses besides FCC there are
three other domestic producers of
template in the United States
ArcelorMittal US Steel and USS pasta or
UPI
the volume of template and black plate
required directly for national defense
needs is limited and OCC believes that
the existing domestic capacity is
adequate to meet current and projected
national defense requirements unlike our
three competitors in the tin plate
market OCC does not have its own captive
supply of black plate rather OCC
is dependent on purchasing backlight in
the merchant market the le domestic
producers a black plate however are also
our competitors in the template market
primarily our slaw and us ArcelorMittal
and US Steel as the West Coast producer
UPI is not a viable supplier black plate
for OCC sourcing of 100% of our black
plate requirements from our competitors
is not a viable option for sec unless
we're able to continue to also purchase
high-quality black plate from import
sources OCC may have to close the stores
in 2012 RG steel our former parent
company and source of OCC black plate
went through bankruptcy and was
liquidated until the third quarter of
2016
OCC obtained its black plate from
ArcelorMittal Costco and from Japanese
suppliers the only viable domestic
supplier at this point is ArcelorMittal
OCC is no longer able to import black
plate from Korea and Japan and has not
done so since the third quarter of 2016
as a result of the anti-dumping and
countervailing Duty actions against cold
roll as a result OCC continues to
purchase black plate from our seller
metal and from some import sources but
OCC lack sufficient raw materials to
maintain its efficiency in 2015 OCC
operated sixty percent of capacity
declining to 50 percent in 2016 as a
result of the in temping and
countervailing any orders in the first
quarter of 2017 OCC is operating at
forty percent of capacity because of
shortages of black plate substrate
moreover despite us steeled assurances
before the International Trade
Commission that they could supply black
plate u.s. still has never even offered
competitively placed correctly to OCC as
compared to offers from our soar metal
or other suppliers
US Steel offers have been at prices that
were higher than the current market
price for the finished template so
clearly US Steel's not interested in
supplying us EC do the fact that we
compete with them in the template
OCC cannot survive with ArcelorMittal as
its only supplier if OCC sourced all of
its black play from our sort metal that
plant were to have any kind of a
shutdown fire strike etc OCC was shut
down secondly our soul or metal is OCC's
direct competitor in the template market
they will always prioritize their own
needs ahead of ours any further import
restrictions on black plate would be
devastating to OCC and would threaten
its survival as a US producer to the
extent the dis proceeding is designed
designing an industrial policy towards a
steel industry and still users thought
must be given to the cost of shutting
out imported still needed to supplement
domestic production and to support
downstream users of stealing
restrictions on import to black plate
have weakened not strengthened the US
industry thank you
thank you for your remarks
please our next speaker please mr.
director not speaker Ross and panel
members I want to tell you I'm really
excited about being here the Steel
Workers Union have been having this
fight for forty five years trying to get
fair trade in steel in the last 15 years
the steel industry went from producing
125 million tons a year to slightly over
85 million tons a year
our union says 2012 that's filed 86
trade cases are participated in 86 trade
cases we 181 of them why do we win we
win because they cheat included in my
formal testimony as the document looks
like this called Chinese steel
overcapacity in five different US China
consultations on steel China promised
five times to reduce its capacity that
first one they were producing roughly
the same amount of tons as America by
the time we got to 2014 after breaking
their promise five times that they would
reduce capacity they were now producing
1.2 billion tons
and as some of the earlier speaker said
that that 1.2 billion tons
ends up with depending on which
economist you want to accept somewhere
between 400 to 700 million tons of over
capacity that is flooding the market I
have way too much to save and too little
time to say it but the reality is that
when we're going to talk about the steel
industry we need to talk about the
pleat industry we need to talk about the
basic materials iron to steel products
that are occluded like silicon metal
manganese and chromium and that are
needed to make the alloys when we look
at what's going on I was going to talk
about all the different things that
steel ends up being a part of whether
it's the food chain or the water supply
we have close to 2 million miles of
water pipe in America I don't think
there's a person that lives in the
Northeast that hasn't experienced a
water line break from water line pipes
that could be 50 60 80 or 90 100 years
old that affects our national security I
could talk about all the steel that goes
into defense industry and talk about how
that affects our national security I
could talk about that period of time
that went from 125 million tons to 85
and the tens of thousands of workers
that lost their jobs and the communities
that were destroyed I could talk about
the need for a specialty steel I could
talk about the neill for need for
electric steel to make sure that our
transformers and our transformer lines
are modernized and brought up to speed I
can talk about the need to grow our
steel industry back I'm sick and tired
of hearing people come in and say if you
want fair trade we might have to bring a
trade action against you in agriculture
our union has been fighting for for fair
trade and steeled now for forty five
years
the reality is that the trade laws
honored panel do not work they do not
work we filed dozens of cases on the
same issue the remedy is put in when the
remedy expires we have to do the same
thing or the industry finds the foreign
industry the cheaters as mr. gonzales
said they find a different way to cheat
whether they circumvent or do something
else for a long time I thought the best
way to do this is to tell those cheaters
three strikes and you're out most
valuable thing on the planet for a
company from offshore is access to this
market and we've been giving it away for
free I give an example of maybe Marcy
Kaptur mention it while I wasn't here
US Steel invested hundreds of million
dollar
and making it brand new Oct G pipe mil
in Lorain Ohio the thing had never
gotten to full capacity because was
we're doing that the South Koreans built
a brand new state-of-the-art mill we
filed a trade case we won the trade case
you know what they did the increase
their production increase they're dead
there's the destination is us why could
they do that they don't drill one inch
in their own country they knew that if
they did that and shift it into America
there was nothing we could do about it
because they continue to get subsidies
from their government so therefore we
got an Oct Gmail that is the state of
the art that's hardly working at all so
members of the panel we need to make
sure that as you do your review you
review the complete steel industry you
review why it doesn't work
you review why we've been pushed down to
85 million tons you need to look at all
the different kinds of steel I say to
people long after when you drive by a
drive by a steel mill and you see the
rows of steel in the yard they might
look all the same but most of them are
all different they're scientifically
engineered you go into a modern steel
mill and from the front end to the back
end you might not see a human being but
that mill will roll out at 1/10 of one
inch of deviance almost perfect for its
customer and if we can't earn the price
the cost of capital then what will
happen we're already down to the bare
minimum of 85 billion tons and our
industry has been under attack as I say
for 45 years I want to make one other
quick point we're a bi-national Union we
have members on both sides of the border
Canada is one of the few countries
that's always been there to stand by the
United States indeed our national
security intelligence relationship with
Canada is truly unique we share an
uncontested border we have intelligence
sharing relationship known as 5i5 eyes
and it's limited only to five countries
we have the North American Aerospace
Defense NORAD and its existence in more
than 60 years we're at least that Canada
be excluded from the
because it's been considered for those
45 years that I've been talking about
it's been considered as part of the
North American steel industry and
considered as part of the American steel
industry last point I wish this happened
in more places but we actually have a
trade surplus with Canada I'd love to
have a trade surplus with Japan South
Korea India China and we can maybe get
there if we enforce modernize trade laws
thank you very much for your time thank
you for your comments we have the next
speaker please he was on such a good
role I enjoyed that running into my time
as well good afternoon my name is David
Zelezny and it is my privilege to speak
here today on behalf of the american
institute of steel construction start by
thanking secretary and secretary ross
for initiating this investigation and
also the members of the panel for your
work on it my focus today is on
construction aisc is a nonprofit
nonpartisan technical institute and
trade association that has served the
structural steel design community and
construction industry since 1921 aisc
develops industry standards
specifications and codes for steel
construction conducts technical research
and operates programs for education
technical assistance and quality quality
certification together with the
affiliate with our affiliate national
steel bridge Alliance aisc represents
more than a thousand US businesses
involved in the structural steel
industry and has more than 40,000
professional affiliate and student
members ase estimates the u.s.
structural steel industry directly
supports about 200,000 jobs most of
which involves skilled labor steel
fabricators provide a critical
intermediary role in the structural
steel supply chain positioned between
the mills that produced steel plate and
shapes and the cranes that lift steel
columns beams girders and trusses into
place at construction sites fabricators
convert steel produced at the mills and
to site ready pieces operating plants or
sophisticated equipment and skilled
craftspeople cut drill fit and weld
components to meet the
and specifications for each project
fabricators invest invest in both both
physical assets and human assets because
while some fabrication processes can be
automated most of the labor and
fabrication plants and fitting and
welding which are difficult skills to
automate on custom design projects
equally important fabricators are
entrusted with the design drawings for
projects drawings that show the forces
the buildings are designed to resist
both natural forces and forces that can
be introduced by actions designed to
damage or bring structures down in short
fabricators are responsible for steel
that goes into pros into projects from
high-rise towers in Manhattan to dams in
California from wastewater plants in
Michigan to power plants in the Gulf
states from bridges crossing the
Mississippi River to ports handling
cargo on the coasts indeed our company
based in South Carolina is entrusted
with the structural steel for the US
Capitol Visitor Center and also
entrusted with the security enhancements
that were designed into that structure
after the terrorist acts of 9/11 to
protect members of Congress in the event
of a future attack for most of the long
history of the American structural
American steel industry major projects
and like bridges high-rise towers and
secure government facilities were
routinely fabricated in American plants
however following the passage of NAFTA
fabricators working in the Northeast's
on immediate erosion of domestic market
share in cities like Boston and New York
as Canadian fabricators rushed into
those areas then as the Chinese steel
industry grew Americans were shocked to
see steel for the bay bridge in
California fabricated in China almost
overnight the American construction
market became a rich target for foreign
steel industries and while oversight was
focused on imports of mill steel foreign
companies were bringing steel into the
US market as fabricated products with
virtually no resistance today offshore
American access to American construction
markets has become so soft that on major
one major project in New York City steel
plate made in China was shipped to a
fabricator in Mexico fabricated into
building components they're brought
freely into the US under NAFTA rules
shipped 3,000 more miles to New York
City and somehow all of that offshore
material labor and freight was priced
below domestic fabricators cost
according to Commerce Department
statistics import
fabricated structural steel has
increased by a hundred and thirty six
percent in the past five years far in
excess of the growth of the u.s.
construction market fabricated steel is
being imported not just from China but
from Canada Mexico Italy the UK and even
the UAE among many other places and
because fabricated steel is imported for
specific projects and not as a commodity
is exceptionally difficult and expensive
for individual fabricators to prove a
violation of trade laws through
traditional trade case procedures
turning to the specific areas of
investigation under the statutory
language of section 232 a ISC
respectfully requests the department
make the following five findings first
the domestic production and fabrication
of structural steel is necessary for
national defence and security
requirements in this context we're
talking not just about traditional
military installations and equipment but
the security and integrity of our
infrastructure buildings bridges power
plants water treatment facilities and
other major projects built with steel if
it is important to have an American
structural steel industry to build these
projects then trade policy involving
steel imports must address both produced
steel as melted and poured product and
also fabricated components to be
effective
second there's ample capacity in the
domestic structural steel industry to
meet national marketplace requirements
many fabricators have invested in both
their equipment and human resources and
they can handle major projects they also
have the ability to grow as current
markets expand as markets expand but
steel fabrication is an incredibly risky
and competitive industry even in good
markets it's virtually impossible to
operate successfully when markets are
undercut by below cost offshore
fabrication third the close relation
between the nation's economic welfare
and national security is undermined by
foreign tactics to obtain easy access to
domestic steel to domestic steel
construction markets fourth the domestic
structural steel industry supports high
wage skilled labor jobs a strong tax
base and stable employment opportunities
unlike offshore fabricators American
fabricators off the market-based wages
and healthcare benefits to their
employees comply with detailed safety
and environmental regulations in their
plants and pay significant federal state
and income taxes local sales taxes and
use taxes and payroll taxes this all
adds domestic
fabricators cost which can only be
recovered if they can be passed on to
the marketplace
so when offshore fabricators with none
of these costs have open access to the
same marketplace domestic fabricators
are going to obvious disadvantage with
the wanted this of course one of the
reasons why attaching Buy America
requirements to infrastructure is
incredibly important even if
infrastructure is financed by
non-government sources
finally while prior government efforts
to counter illegal steel dumping and
illegal subsidies under trade agreements
and WTO rules have all been well-meaning
they have been proved they have proven
largely ineffective to address imported
fabricated steel offshore producers have
responded to tariffs on milk produced
steel by moving products downstream to
the fabricated level hurting both
fabricators and producers and again it
is exceptionally difficult for
individual fabricators to prove a
violation of trade laws through
traditional trade cases on individual
construction projects with respect to
relief the secretary asked for
innovative remedies one one we have no
ASC has no specific recommendation on
tariffs or quotas except to say that if
they must be extended downstream if
they're going to be effective
our suggestion with respect to
innovative remedies would be for
commerce to designate classes of
structures that are strategically
sensitive or important high-rise towers
power plants port facilities bridges and
attach no domestic fabrication
requirements to those to those projects
on behalf of aisc appreciate the
interest and look forward to working
with the department in any capacity
where we can be of assistance thank you
thank you so much we have our next
speaker please thank you
good afternoon my name is Philip Bell
and I'm president of the steel
Manufacturers Association also known as
the SMA I would like to thank secretary
Ross and the panel for the opportunity
to share ideas with you this afternoon
regarding the department section 232
investigation into the national security
effects of imported steel on a personal
note I would also like to thank
secretary Ross for taking time out of
his busy schedule to address the members
of both the steel Manufacturers
Association and the American Iron and
Steel Institute at our annual members
conference the SMA is a Washington
dc-based trade association that is the
voice of steel makers that rely on the
electric arc furnace or EAF steelmaking
technology which is the dominant
steelmaking technology used in America
SMA membership contains a variety of eaf
skilled producers and seating including
some of the nation's largest steel
makers and employers such as new core
skill Dynamics Gerdau commercial metals
and charter manufacturing as 21st
century steel makers our members utilize
post-consumer recycled ferrous scrap in
their principal feedstock turning this
waste into world-class steel SMA members
account for over 75 percent of domestic
steelmaking capacity and directly employ
more than 60,000 workers in 43 states
and 125 congressional districts it is
imperative to our national security that
the United States have a strong viable
domestic steel industry with sufficient
productive capacity to meet both defense
and commercial needs we cannot rely on
foreign steel producers to arm and
protect our military forces and to
rebuild and maintain our nation's
critical infrastructure still is vital
to our national defense but beyond
direct defense applications still is the
engine of economic activity and
employment that is of critical
importance to the United States imports
of Steel quite simply present an
existential threat to the American steel
industry the volumes of imported steel
today have
Payard demand for US produce steel force
reductions in domestic production and
diminished return on capital investments
u.s. steelmaking production capacity
utilization has hovered under
seventy-five percent for many years we
believe that capacity utilization of 85
percent or higher is necessary to allow
steel makers to ensure a reasonable
return on capital employed operated in
full employment levels make necessary
capital investments invest in research
and development and also officiate
efficiently operate the hot end for the
melted and poured part of steelmaking as
well as the cold end the finishing part
of steelmaking even after the 1999 to
2001 steel crisis capacity utilization
levels rebounded back to that 85 percent
threshold the ability of SFA's members
to meet episodic national defense
requirements and to improve and make
capital investments for tomorrow depends
entirely on today's demand for their US
produce steel SMA members are the safest
most productive and most sustainable
steel makers in the world and we can
compete with anyone on a level playing
field the United States also has the
world's most open markets and the SMA
supports free and fair trade the same
openness however should not be extended
to illegally traded dumped and
subsidized steel over the last decade
global steelmaking capacity has grown at
an unprecedented rate the world's still
a consumption however has not kept pace
for tributing to a large and increasing
gap between global capacity and demand
the effects of global over capacity have
been quite simply to flood the US market
typically unlawfully with imported steel
import market penetration has come as a
great price to the u.s. steel industry
and the US economy from January 2015
the end of 2016 the steel industry
employment has declined by fourteen
thousand four hundred workers as the
domestic steel industry has been
weakened tax revenues have been lost and
our national security has been impaired
based on research done by georgetown
economic services using an estimated
nationwide average annual steel worker
income of sixty 1465 dollars the SMA
estimates of the US federal government
has forgone an average of thirteen
thousand dollars in federal income tax
for each steel worker for each 1.5
million tons of steel imported into the
United States the federal government
will forgo an estimated nine million
dollars in tax revenue as applied to job
losses since 2015
this is estimated to be a hundred and
ninety million dollars SMA commends the
diplomatic efforts to reduce global
steel production and while the United
States may need to act unilaterally to
ensure that its steel producers workers
and customers are not driven out of
business by unfairly traded imports it
is our hope that like-minded countries
can join with us in our support of free
and fair trade and the rule of law we
also hope that the 2:32 process will
serve as a catalyst to explore creative
and meaningful remedies that will deal
with underselling overcapacity and other
market distortions that impact our
entire skill supply chain thank you
thank you for your testimony
thank you next speaker please
good afternoon mr. secretary and members
of the panel thank you for allowing us
to present I'm Bill Geary chairman of
cold finished steel bar Institute and
president of nelson steel company the
cold finished steel bar Institute is a
Washington dc-based trade association
representing US producers of cold
finished steel bar coal finished steel
bars incorporated into a wide range of
consumer industrial aerospace and
military products essentially any
product that contains a motor or moving
part contains one or more components
produced from cold finished steel bar
the US cold finish steel bar industry
produces high quality products on an
efficient cost competitive basis using
highly trained workers under
environmentally safe and sound
conditions the following is a summary of
national defense related materials and
applications provided by cold finished
steel bar producers projectiles and
shell cases are produced from Colts
furnace steel bars these are used
primarily for the a-10 warthog and the
Apache and Black Hawk attack helicopters
coal Finnish steel bar is also present
in armored vehicles in the form of door
hinge pins shafts gears engine parts
suspension parts rocket fuel rods
steering and braking systems and bomb
fin adapters guns
smart bombs and military aircraft all
contained numerous parts produced from
cold finished steel bar and lastly and
maybe more most importantly m16 rounds
are produced from cold finished steel
bar coping skill bar producers also
provide materials for civilian
applications which provide critical
support functions essential to the
national defense in the fight against
terrorism in transportation cold
finished steel bars president is present
excuse me in numerous auto parts
airline's seat parts locomotive axles
and jet ramps in infrastructure cold
finished steel bar is present in bridge
parts wire supports for concrete sewer
pipe parts and rebar tie wire in power
generation cold finished steel bars
present and bolts for wind turbines wire
for electric transmission towers
numerous oil and gas applications and
numerous mining industry applications
like much of the steel industry CF SBI
member companies are facing
extraordinary challenges from foreign
producers we believe there is widespread
dumping in the US market China and other
countries have built substantial excess
production capacity frequently with
government subsidies we face cop we face
competitors which have never had to make
a profit to survive thanks to government
handouts the US market for cold furnace
steel bar has declined precipitously we
estimate that within the last 45 years
the demand for cope in a steel bar in
the United States has gone from 2.5
million tons to about 1 million tonnes
per year
today this reflects the loss of much of
our US customer base unless the
underlying commercial production of cold
finished steel bars is healthy
competitive and profitable CF SBI
companies would be unable to survive and
would not be able to provide critical
materials essential to the national
defense for this reason we respectfully
urge that any remedy determined in this
section 232 case apply not only the cold
finished steel bars that we produce but
also to downstream component parts made
by our customers and are then
incorporated into sub assemblies motors
and various manufacturing systems it is
absolutely critical for the CF SBI to
continue being a viable part of this
country and its national defense I thank
you for your time and welcome any
questions
I don't think we have any questions so
thank you for your testimony ready for
the next speaker thank you good
afternoon
tip of the hat to the panel for your
stamina I think we all appreciate it
secretary Ross and in the panel
my name is Edward wor I'm pleased to be
here in my capacity as the chairman of
the committee Committee on pipe and tube
imports also known as cbt-i I also serve
as a CEO or middle tubular products
North America but today I'm here to
speak on behalf of the entire u.s. pipe
and tube industry as the chairman of the
cpt I CPT I is a leading trade
association for the steel pipe and tube
industry in the United States is founded
in 1984 in response to the damage being
done to domestic producers by imported
products
regrettably notwithstanding our
organization's efforts over three
decades the domestic pipe and tube
industry has continued to decline as
imports take more and more market share
today CPT I has 40 members with 123
facilities in 32 states our members
employ more than 35,000 workers
thousands more workers are currently
laid off awaiting better economic
conditions that would allow employers to
recall them
although 2016 provided some respite for
the domestic pipe and tube industry in
the sense that imports declined from its
peak in 2015 and 14 imports still took
more than half of the US market in 2017
and in 2017 is not looking good
imports are up 55 percent so far which
pretends badly for the domestic
producers our industry is a critical
supplier to a number of important
sectors in the US economy including
agriculture construction infrastructure
and manufacturing
I'm here today however to underscore
that a healthy pipe and tube industry is
vital to the nation's defense and
security first pipe and tube have direct
military applications such as casings
for munitions and are also essential
components of piping systems and Jets
ships military vehicles weapon systems
and prefabricated buildings second pipe
and tube or critical to our nation's
energy security oil wells for example
use pipe and two products like drill
pipe and oil country tubular goods and
both oil and natural gas are transported
through pipelines made of line pipe
petroleum products like gasoline which
is essentially to virtually any military
action are also refined in facilities
made almost entirely of pipe and tube
third pipe and tube are important to
national security because they are used
in the transmission of critical fluids
and gases for fire protection industrial
production heating and cooling and while
their water gathering systems finally
pipe and tuberin are an integral part of
the overall steel industry seamless pipe
and tube is made from steel billets
welded pipe and tube is made from flat
rolled steel domestic pipe and tube
companies tend to buy these inputs from
domestic sources foreign pipe and tube
producers by their steel from foreign
suppliers we estimate the domestic pipe
and tube makers account for as much as
one third of the consumption of u.s.
made hot rolled steel domestic pipe and
tube manufacturers were to go out of
business
u.s. steel producers would be
hard-pressed to fill the resulting void
and demand the Reagan administration
recognized the importance of including
pipe and tube in its voluntary restraint
agreements as did the second Bush
administration when crafting a safeguard
remedy the Trump administration should
do the same
recording the publication steel bench
marker Chinese export prices for hot
rolled steel in 2016 were four hundred
and fifty three dollars a tonne whereas
US prices were six hundred seventy one
dollars a ton China's state-owned
enterprises don't care about profits and
will continue producing at a loss in
order to maintain production in
employment the administration were to
address only basic steel products and
not pipe into the domestic differential
would likely increase potentially making
domestic pipe and tube less competitive
than it already is
cpt I therefore favors a remedy for all
flat rolled steel and billets extending
to pipe and tube and associated
components like couplings and nipples as
well as fabricated products such as pipe
spools and pipe modules on behalf of the
nation's makers of pipe and tube as well
as their workers I'm grateful for this
opportunity to present you with this
testimony we'll be pleased to answer any
questions use an hour and written
submission thank you thank you for your
remarks ready for our next speaker
[Applause]
good afternoon
Raymond Minh road with a steel founder
Society of America thank secretary Ross
in the panel for opening this
investigation also thank you for the
tremendous Trump bump we got after the
election in November we saw markets
really improved dramatically through
December and have remained fairly strong
through April although may is beginning
to look pretty iffy for us in September
on September 9th 2003 a meet foundry one
of our companies took steel from the
World Trade Center remelted it and cast
the valve stem for the USS New York that
is typical of what we do in the steel
casting industry we make custom
engineered products by melting steel and
pouring it into molds to make custom
shapes so we're a very small part of the
industry there's about a 10 million ton
a year metal casting industry we make
about a million times and that's in a
steel industry of course it's over 100
million tons so we're really small
producers the u.s. steel foundries have
seen a significant reduction in the
number of plants and in the employment
since 2000 we've reduced our plants by
80 there's about 200 plants left we can
now make about 1.4 million tons a year
of capacity we're only operating at
about a million tons so we're only at
about 60 percent of capacity and we've
lost about 500,000 tons of capacity
since 2000 that means we've also closed
80 plants and about 8,000 workers so
we've lost about a third of the industry
over the last 30 years in terms of
national security like the bow stem we
make critical components for the
Department of Defense we worked with the
defense Defense Logistics Agency because
they're not well equipped to buy
engineered products like castings and so
we worked with them for the last 30
years and we've identified in their
database over 10,000 parts that require
steel castings and 75 of iron
member companies in the United States of
the 200 foundries that are still left
make Department of Defense parts so we
make over 10,000 parts and they go in
virtually every every weapon system
Acheson which is a partner company
within me makes the turret ring for the
m1 tank that's what kept them alive in
1980s and they worked with us because we
worked with the army to develop a new
armored steel to try and provide iad
protection they're developed that we're
developing that with adjusting castings
and adjusting Kansas their sister
company out Tacoma Washington is the
only qualified producer of high-strength
Steel's for the Navy for the Virginia
class submarines there are other non
domestic sources but they're the only
domestic source a great deal of that is
the result of globalization the intended
consequence of globalization is to
expand the supply chain and allow you to
have both more efficient production and
a wider range of technologies available
and most of our customers and the
military have gained the benefits of
globalization of the supply chain but
that came at an unintended cost when you
had regional economies there were always
two or two-and-a-half suppliers for each
specialty component because you needed
some redundancy and supply chain and you
wanted some competitive pressures to
keep prices under control with
globalization we've reduced the number
of suppliers in regional economy
certainly in the US economy to one for
each one of these specialty products and
that one foundry is vulnerable because
if their commercial business becomes
poor then they're no longer had the
capability of making the specialty
products that defense needs that's
really problematic a meat foundry closed
last year the one that made the valve
stem adjacent in Tacoma are both
operating at near 50% only 50% of
capacity and the only thing that's
keeping Tacoma foundry running is the
work that they're doing for the Navy for
the virginia-class submarine so it's
really a challenge for us so if we look
at what globalization has done we look
at we're in advanced manufacturing we
make speciality products and because of
when we've had unfair trade cases the
current rules based trading system is
ill configured to allow us access to get
trade remedies it costs too much it
takes too long and we get no direct
relief cost over half a million dollars
to pursue a case it takes two years to
get a resolution if I have a ten million
dollar specialty steel market that that
system is inaccessible to me even if I
get it then enforcement's problematic
because of people shifting week it
around that it's like playing game of
whack-a-mole you you restrict one
product and then they go upstream or
downstream to import another product so
we really are deeply concerned that
there's no small claims court
no expedited availability no way of
we've got members who have a clear case
of trade trade violations and yet
there's no system that allows them to
get any relief under our current trade
rules thank you thank you for your
testimony and we're ready for the next
speaker
if you would pass on my gracious thanks
to secretary Ross and distinguished
members the panel thank you for your
patience in your precious time today for
the record my name is Mark Millett I'm
the president CEO steel dynamics known
as SDI as one of the three co-founders
of the company in 1994 a company
produced 9.3 million tons of steel in
2016 at 7400 associates yet we have an
annual capacity of 11 million tons that
under utilization was direct effect of
imported steel over the last five years
we've made approximately two billion
dollars of capital investments including
a 1.65 billion dollar investment three
and a half million ton plant in
Mississippi previously owned by sever
stall of Russia we're a major scrap
company we also won the largest
galvanized she produces the second
largest structural producer and the
leading rail producer in the u.s. today
our products are vital to our national
and Economic Security they go into
national defense
military installations transportation
infrastructure building construction and
orders a Mississippi plan a major steel
is a major steel supplier to oil country
tubular goods and line pipe mills
in Texas the steel import problem stems
from global over capacity but I think
perhaps more accurately it is the
irresponsible actions of sovereign
states their continued production
regardless of demand to maintain
employment in America is simple we
produced the order we produce the demand
if demand drops
we've curtail production we reduce work
hours we idle plants we must recognize
that 70% of the global steel capacity
today is in state hands this must be
addressed through global solution for
example we filed anti-dumping and
countervailing Duty cases in 2015 on
corrosion resistant sheet and corrode
Steel's duties of over 100 percent
eliminated direct Chinese imports of
each product by over 100,000 tons per
month however just last month in April
2017 460 thousand tons of corrosion
resistant sheet and 230,000 tons a code
Roshi were imported almost 50% more than
before we filed those cases in addition
more than 700,000 tons of steel pipe and
tube were imported in April alone we're
playing a game of whack-a-mole we hit
the Chinese with duties in Chinese steel
goes to ten of the countries to become
code rolled steel corrosion resistant
sheet steel or pipe we're also seeing
our market for structural zeroed as
massive quantities of fabricated
structures are imported big
international companies such as Bechtel
a floor of fabricating hole plants in
China between 2013 and 2017 imports
doubled more doubled from 850,000 tons
to 1.7 million tons and they keep
growing today world steel dynamics
released a study on April 13th 2017 on
the International hot rule market I'll
attach it to our written comments but
the study said the Chinese export prices
were about $400 a short time which is
stated was $100 a ton fellow Chinese
marginal cost they're losing real money
the study said that US domestic prices
were at 640 dollars a tonne $240 or 60
percent higher than the Chinese export
price this is why SDI favors quotas at
the 2010 or 2011 volume of imports the
US and the rest of the world must cut
off subsidized and dumped Chinese steel
exports to stop this game of
whack-a-mole to get chart to China
really shutter access capacity now not
five or ten years from that to do
otherwise would truly jeopardize our
national and economic security and as I
said they're hearing the testimony today
I'm reminded of a President Roosevelt
but just before was Prior going into
World War two he addressed the nation he
urged that they were the arsenal of
democracy he knew that it was
infrastructure in the productivity of
the American people that would win World
War two and indeed Europe he was right
today the the productivity of the
American worker is by far better than
ever is done has been before as far
better than any other country in the
world we just make sure we have to make
sure that it has a manufacturing base to
operate in tough times in the future so
thank you good thank you for your
remarks could I address the one question
that came up sure absolutely on a I
think the question was regarding some
products cannot be imported into into
the US and certainly there are there are
products that can't be imported that the
no climatic they can be important but
they're not manufactured in the States
today I would tell you this very very
small body they're easily identifiable
and concept be separated from from the
the rest of the parts and should not be
the basis of any broad policy I think
it's illustrated perhaps to consider why
those products are made today as mr.
Gerard said earlier you know we used to
make 125 million tons of product in this
country today is 85 million times when
we co-founded SDI in 1993 there are 55
principal steel companies today there
are only 15 the good side of that is the
American steel industry is become
incredibly efficient we can compete with
anyone in the world the integrator mills
are down to one man hour per ton or less
the electric arc furnace industry is
down to
point three man-hours propose we can
compete with anything yet the industry
many cannot make the cost of capital
today the consequence is that we are
unable some some of our industry are
unable to reinvest in their facilities
make those high-cost
niche markets thank you ready for our
next speaker good afternoon I'm
Alexander Mars president of mass flange
corporation I'm here on behalf of the
Coalition of American flange producers
its members and employees thank you for
the opportunity to appear before each
and every one of you here today we fully
support the section 232 investigation on
steel imports and urge the Secretary of
Commerce to find that these imports are
threatening to impair our country's
national security and that assertive
action must be taken
mass flange corporation is a u.s.
manufacturer of stainless steel and a
live flameless from 35 years ago in 1982
and we are located in Houston Texas our
products are used to strengthen and
connect pipes valves pumps and other
equipment for piping systems mass flange
is a fully integrated forging and
machining manufacture with most
diversified offering of stainless steel
and Allen ponens we offer a complete
line of both small and large diameter
flanges in the full range of pressure
classes and in various grades of
material mass flange together with core
pipe Products Inc are the founding
members of the coalition of American
flange producers we are a domestic
coalition for
of flange manufacturers and produced
steel flanges of the numerous national
security applications because our
products are resistant to the harshest
applications they are used in navy ships
submarines warfare products aviation jet
refueling systems national refining
chemical manufacturing plants nuclear
power reactors turbine power and coal
gasification generation and liquid
natural gas recovery we also sell to
utility companies who use our products
as for the national power grid a
critical component of the infrastructure
that protects the United States and its
citizens our flanges are also used to
assemble pharmaceutical equipment vital
to the production and development of
medicines that prevent and respond to
epidemics
however import of Steel's including
stainless steel and Ella Flanders into
the US market threatens our ability to
supply products for these and many other
national security applications this is
why we are here today to urge commerce
to find that imported steel is
threatening to impair the national
security and that actions such as a
comprehensive tariff or a quota system
on all steel products I needed to
significantly restrain these imports in
our industry inputs have often entered
the market in disruptive massive weight
at a time rather than predictably
throughout the year for example we have
seen Indian producers ship substantial
year-and-a-half supplies of stainless
steel flanges to our customers over a
series of a single quarter last year but
this is not just about India we see the
same disruptive behavior from China the
Philippines that South Korea and many
others as these imports surged into the
US market our capacity to supply our
customers
invest and our production revenue and
employee numbers suffer greatly just
last month a Mira Forge Group Inc
another u.s. producer of stainless steel
alloy flanges filed for chapter 11
bankruptcy protection that decision we
are sure was not in no small parent as a
result of imports coming into the United
States and displacing American
production and business
moreover the injury of these imports
caused our industry to out cause our
industry is confirmed by the existence
of past anti-dumping orders on imports
of stainless steel flanges from India
and Taiwan and ongoing investigations
currently the international trade
commission is in the final phase of
anti-dumping investigations on carbon
steel flanges from India Italy and Spain
and countervailing duty investigations
from carbon steel flanges from India
moreover the Department of Commerce
recently calculated between nineteen and
twenty four point four percent damping
margins on carbon steel finders from
Spain as these investigations show
unfairly traded imports of steel flanges
are rationally entering the US market
and have caused and are likely to
continue causing great injury to our
industry
but this is about much more than just
dumb flanges from one or two countries
imports of these products do indeed
threaten the national security of the
United States the threat caused by
imports is unsurprising given the global
steel overcapacity crisis which has
undoubtedly spirit form over production
in a range of steel products including
flanges over the past year it has become
particularly evident that not only
second class flange or other pipe
connector products have been imported
into the United States
meaning importation of questionable
quality and workmanship from those
countries previously mentioned however
also being at a price level nuts
to our business environment with high us
quality workmanship business ethics and
national responsibilities with each new
aggressive surge of imports our ability
to adequately supply flanges for
national security applications
deteriorates the flanges we supply to
the Armed Forces go into the Assembly of
military vessels assisting to keep our
war fighters and nations safe as I
mentioned earlier they go into equipment
for wind oil coal natural gas and
nuclear energy plants the power and
energy that fields our national security
efforts are transmitted through these
pipes that are strengthened and held
together by flanges but steel imports
competing with us in the US market take
opportunities we would otherwise have
affecting our current numbers and
hindering our ability to innovate and
invest in a stronger better product to
remain competitive and continue
supplying the best to our customers in
addition as president Trump has stated
imports endanger the jobs needed to
maintain a pool of skilled workers
essential for the continued development
of advanced steel manufacturing our
industry also needs the Secretary to
broadly define steel imports to include
stainless steel and alloy flanges and
broadly define the scope of national
security requirements to include
critical infrastructure aladdin's in the
energy industry national power grid and
pharmaceutical industry in addition to
military applications on behalf of the
coalition of American French producers I
urge the Department of Commerce to find
that steel imports are threatening US
national security and urge the agency to
recommend aggressive comprehensive and
concrete actions to adjust steel imports
including stainless steel and alloy
flanges and to stop them from impairing
national security thank you for your
time
the tension thank you for your statement
we're now ready for the next speaker
good afternoon my name is Robert Landry
and I'm vice president and chief
commercial officer for the Port of New
Orleans it is my honor to appear before
you today to address the impact of
potential 2:32 actions on the Port of
New Orleans and its entire maritime
community the port appreciates the
president's efforts to spotlight and
correct improper trade practices so that
US steel producers can compete fairly in
a global environment today though I will
share some insights gained from previous
US trade sanctions of on imported steel
as an educational caution and will
suggest that other remedies to directly
incentivize or otherwise assist the
domestic steel industry be fully
explored and implemented instead of
undertaking section 230 to import
adjustments the Port of New Orleans is
annually among the top five cargo ports
in the United States as well as one of
the leading cruise ports in this country
more germane to this hearing however is
the top tier status New Orleans
maintains as one of the largest steel
importing ports in the u.s. the
importance of this commodity to the port
cannot be overstated in 2016
imported steel accounted for 45% of all
imported cargo moving across the
publicly owned facilities within the
port's jurisdiction as a result
approximately 35% of the port's cargo
related revenue is generated by this
single commodity it is with solid
historical context that I can testify to
the detrimental impacts of trade
sanctions on imported steel in 2002 then
President Bush imposed sanctions on a
variety of imported steel products from
several foreign countries
under Section 201 of the Trade Act of
1974 in the ensuing year the Port of New
Orleans suffered a 46 percent decline in
steel imports and a direct loss of over
1.6 million dollars in revenue the
section 230 to authority under the trade
expansion act of 1960 to his far broader
broader than the statutory authorities
used in 2002 and could result in Foresti
for import restrictions on a wider
variety of steel products for many more
foreign countries notably a trade
partnership worldwide LLC economic study
that reviewed the near-term impact the
2002 steel import tariffs found that
200,000 Americans lost their jobs during
2002 sanctions due to higher steel
prices more American workers lost their
jobs in 2002 to higher steel prices than
the total number employed by the u.s.
steel industry itself every US state
experienced employment losses from
higher steel cost the impact of a tariff
on imported steel would have a broad
economic impact just recently the
association of general contractors cited
the rise in commodity prices is one of
the major reasons that home prices have
increased steel was one of the major
commodities mentioned in the association
study while one would expect sanctions
on imported steel to only exacerbate the
rise and steel prices the ripple effect
on other commodities would be less
noticeable but just as adverse
for example 80 percent of the steel
products moving through the Port of New
Orleans is further transported up the
Mississippi River by tug and barge those
same barges are then used by American
farmers to deliver agricultural products
downriver to the grain elevators located
on the lower Mississippi River
without those barges moving upriver with
cargo the cost to transport us brain
increases making us agricultural
products less competitive on the
worldwide marketplace with those of
other producing countries like Brazil
and Russia the Port of New Orleans like
other commercial enterprises needs and
depends upon a strong US economy a
vibrant healthy and competitive US steel
industry is
to that goal however the wide imposition
and enforcement of new restrictions on
imported steel would create a negative
impact on the port industry the larger
maritime community and the American
manufacturers and other steel consuming
industries fair and open trade policies
combined with appropriate incentives and
other remedies for the u.s. steel
producers would be the best means to
promote all sectors of the US economy
thank you for your attention today and
for your consideration of the views of
the port in New Orleans on this vital
trade matter thank you we appreciate
your input and now for last but
certainly not least Speaker of our 37
mr. Johnson I will definitely keep it to
five minutes good afternoon my name is
Joel Johnson I'm the chief executive
officer of force and management pipe USA
known as BMP BMP is a full-service mill
in Baytown Texas
we manufacture welded steel pipes
primarily casing for the oil and gas
wells known as oil country tubular goods
/ Oct G our pipe mill opened in 2014 the
total invested capital by the Voorhis on
group in this facility is over 300
million dollars we intend to make
further investments as long as the
market conditions continue to be
favorable and no additional import
restrictions are imposed we employ over
180 people in our off US operations our
plan this year is to produce well over
200,000 tons of Oct G however facility
that we have in Baytown cannot produce
every size of Oct G used in the US
market just like most other u.s. OCT G
producers we fill out our product line
by importing selective sizes of pipe
that are produced by our parent and
Turkey as with other US producers these
imports allow us to be fully competitive
in the US market and enhanced the volume
of our domestic production if we were
suddenly unable to import these products
jobs will be
while not used in the national defense
Oct G and oil and gas line pipe are an
important element of the manufacturing
infrastructure needed for domestic
energy production and distribution
expanding domestic energy production and
increasing America's energy independence
has obvious national security
implications any import measures would
adversely affect these sectors will
threaten national security by
undermining US energy production and
energy independence independence I'd
also like to bring to your attention the
domestic pipe manufacturers such as ours
are consumers of flat rolled steel we
significantly add value through the
market of pipe manufacturing process
import restrictions on these flat rolled
steel products pose a risk of
undermining the domestic steel pipe
sector by increasing costs and reducing
competitiveness higher cost for OCT G
inline pipe will discourage oil and gas
drilling in the construction of new
pipelines a case in point is large
diameter pipe line pipe this is pipe
used in large oil and gas pipelines such
as a recently approved Keystone pipeline
the u.s. health and safety regulations
governing governing such pipelines
require that the pipe be produced using
high-quality heavy gauge steel with very
specific and demanding chemical and
mechanical properties as the u.s.
pipeline operators commented in a recent
proceeding before the Commerce
Department the u.s. line pipe industry
cannot produce certain large diameter
pipe used in these major pipeline
projects there's two reasons for this
the first reason is is that the flat
rolled steel that meets these demanding
requirements specifications cannot be
sourced in the US secondly flat rolled
steel products that do meet these
specifications are subject to high
anti-dumping and countervailing duties
we have concerns about future u.s.
investments in large-diameter pipe
production despite our extensive
technical expertise and experience with
this high value-added product any new
trade barrier calls into question the
feasible
of such investments if high tariffs or
restrictive quotas are imposed on
imports of large diameter line pipes
critical energy infrastructure projects
will be threatened due to the inability
to sources the specific pipe required in
the United States we believe that the
Boris on group has proven its commitment
to the American economy before our
investment in Texas we imported all of
our pipe from our Turkish facilities
once our investment was in was
established we ramped up our production
in the US and now employ hundreds
directly and indirectly by focusing on
domestic production and strategically
importing as needed we do not believe
further import restrictions are
necessary however if the President
imposes a trade restrictive measure it
should be designed to carefully protect
those companies that have already
invested in the US every effort should
be taken to work directly with these
companies to ensure that neither their
source of raw material supply nor their
supplemental imports are endangered I
think our goal should be to encourage US
investment and protect the very
companies have demonstrated their
commitment to the US market thank you
for your time if you have any questions
does it look like we have any questions
so thank you so much thank you for very
well as through all the other speakers
that concludes today's hearing keep in
mind that the record for public comments
on this investigation closes a week from
today so if anyone has not so many
comments would like to do so that's the
deadline and certainly if folks would
like to submit supplemental comments
based on what they've heard today you
should feel free to do so as well
but we appreciate all of your attendance
particularly all the speakers who
provide a very valuable input this is
very important for us at the Commerce
Department and the other agencies to get
as much input from all the stakeholders
as possible so thank you all anything
else okay look at booted