MSCI submits written testimony in Commerce Dept. Section 232 investigation

In written testimony submitted to the U.S. Commerce Department, Rolling Meadows, Ill.-based Metals Service Center Institute (MSCI) President/CEO M. Robert Weidner argued global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel market. The testimony was submitted in response to President Trump’s executive memorandum calling for a Section 232 investigation into steel imports’ impact on U.S. national security.

Weidner said federal officials should continue current enforcement strategies and provide the same relief for downstream and upstream domestic producers.

“MSCI believes the health of the U.S. domestic steel industry is critical to the entire U.S. manufacturing sector and the broader U.S. economy,” Weidner said. “Problems posed by foreign government-sponsored capacity expansion demand response from the U.S. government.”

The decline of service center shipments leaves no question that the U.S. steel industry has suffered from unfair trade practices. Carbon steel shipments from MSCI member companies in 2016 were only 66 percent of peak shipments before the 2008 recession.

“The U.S. government has rightfully imposed tariffs on various metals from countries that it has deemed to be unfairly subsidizing its metal exports to the U.S.,” Weidner explained. “However, there is growing evidence that in an attempt to circumvent those rightfully imposed duties, the Chinese and others are simply processing that same steel into steel parts. These countries cannot be allowed to continue to circumvent U.S. rules and regulations.”

To address this circumvention, MSCI advised federal officials to provide relief for producers up and down the supply chain and to consider consequences of any new trade policy, including the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including NAFTA, with MSCI requesting the exclusion of Canada and Mexico from trade penalties resulting from the 232 investigation on steel.

“The causes of global excess capacity must be addressed to ensure a thriving North American industrial metals manufacturing industry, a healthy American economy, and a secure nation,” Weidner concluded. “If the U.S. does not address this problem now, it will only get worse.”

The industrial metals supply chain employs more than 400,000 people, pays more than $30 billion in wages, and generates more than $180 billion in U.S. economic activity.