Take a stand for free and fair trade

A ruling that aims to protect the domestic steel industry could set off a chain reaction that could result in harm to the U.S. metal fabricating industry.

Dear Metal Fabrication Industry Professional,

Under the authority of the 1962 Trade Expansion Act, Section 232, President Donald Trump’s administration is currently taking a look at whether the importing of steel is hurting the domestic steel industry to the point where national security may be at risk. The outcome of this investigation and the potential of tightening the steel supply chain with resulting trade barriers have the potential to harm the future health and competitiveness of the U.S. metal fabrication sector.

Protecting the 149,000 people who work in the steel industry sounds prudent on the surface, but not if it comes at the expense of many more jobs in the U.S. metal fabricating industry. For instance, the National Institute of Standards and Technology believes that 1.4 million people are employed by companies identified as “fabricated metal products manufacturers.” (That’s North American Industry Classification System 332, to be exact.) If steps are taken to protect domestic steel industry jobs while putting several thousand more at risk, then nothing will be accomplished.

In today’s globally competitive environment, it is an unfortunate reality that some foreign countries, as well as individual companies, seek to circumvent U.S. trade laws when importing into the U.S. Enforcement against those who violate our laws must be approached with care, as the unintended result will most certainly be higher material costs for metal fabricators. This also is happening at a time when the U.S. dollar’s value is high, making U.S. exports more expensive around the globe. Metal fabricators that sell goods to other countries and that are in supply chains where the end product is exported don’t have the ability to absorb huge steel price increases because market dynamics simply don’t allow those increases to be passed along to their foreign customers.

As the U.S. steel industry rushes to ramp up production to fill the supply gap that is sure to result from any trade penalties placed on foreign steelmakers, metal fabricators are sure to face shortages and allocations as they look to fill orders. The increased demand in the face of limited supply will cause prices to increase further.

Finally, any sanctions leveled against foreign steel producers that do not go far enough in their scope could lead to a flood of imported fabricated parts as foreign competitors look to circumvent paying duties on foreign steel. Over the past several years, the U.S. metal fabricating base has stepped up in its battle against global competitors, which benefit from cheap labor forces and lax governmental regulations, but it can’t sustain further assaults that may arise as foreign countries look to bypass trade penalties related to steel. This is the worst possible scenario that I can imagine. This realistically will lead to hundreds of job losses and reduced operating capacity for U.S. metal fabricators. What will have been gained by protecting the U.S. steel industry if its domestic customer base shrinks in the process?

We know that metal parts are being competitively fabricated in the U.S. today, and with your support, we want to ensure that a level playing field remains in place for domestic metal fabricators. History shows us that free and fair trade is the foundation of our country’s manufacturing might and represents the best path forward for greater prosperity for all U.S. citizens.

I urge you to make your voice heard to President Trump, Commerce Secretary Wilbur Ross, and U.S. Trade Representative Robert Lighthizer.

Sincerely

Edward Youdell

President and CEO

Fabricators and Manufacturers Association, International