WCA September 2018

From the Americas

Some businesses, among them Primrose Alloys, a metals trading company, and Wright & McGill, a maker of fishing gear, had several applications denied. As reported by Ana Swanson and Tiffany Hsu of the New York Times , a number of companies whose applications were denied had drawn objections from American steel makers. Nucor (Charlotte, North Carolina), which supports the tariffs, argued against Bekaert’s request for an exclusion for the wire rod that it uses to produce tyre cord. Nucor claimed that Bekaert had access to enough rod without having to resort to imports. United States Steel, which credits the tariffs for enabling it to restart idled furnaces around the country, has filed objections to the exclusions sought by several companies. In most of these filings, the Pittsburgh-based steel giant claimed it was capable of producing the steel for sheeting, tubing, casing and pipe that the companies were requesting permission to import. “While companies say they still have uncertainties about the requirements for exemptions, many of the approvals and denials have so far appeared to come down to whether an American steel or aluminium manufacturer objects to the request,” the Times reporters wrote. Wilbur Ross, the commerce secretary, has acknowledged that the Commerce Department is more likely to reject an application that has drawn objections from another US company. (“Companies Get First Tariff Waivers, but Many More Are Left in Limbo,” 23 rd June)  The Commerce Department must still approve or deny nearly 20,000 petitions. According to the Times , companies that have applied for the exclusions criticised the exercise as both long and disorganised. “This is the most screwed-up process,” said Mark Mullen, president of Griggs Steel, a steel distributor in the Detroit area. “This is a disservice to our industry and the biggest insult to our intelligence that I have ever seen from the government.” Mr Mullen told Ms Swanson and Ms Hsu that he has made 90 requests and has not been told the status of any of them. He is waiting to submit 2,000 more requests.  The Times reporters commented: “Although the president has famously said trade wars are ‘easy to win’, the lingering difficulties of the steel and aluminium tariffs show the inevitable complexity of trying to reshape the rules of global trade in a matter of months.” Of related interest . . .  MissouriNet reported (22 nd June) that Mid Continent Nail Corp (Poplar Bluff, Missouri), one of the last remaining nail producers in the USA, said it lost 50 per cent of its business in the two weeks after President Donald Trump’s imposition of a tariff on steel imports. The company, which had already laid off 60 temporary workers and was looking at cutting 200 of its 500-strong regular work force, said it might be out of business by September.

“Steelmaking has been part of Coatesville for 200 years,” Scott Paul, president of the Alliance for American Manufacturing (AAM), told Guardian US . “The steel mill used to employ more than 5,000 people, so clearly [steel’s] role in the local economy is somewhat diminished. But it’s still critically important.” The Coatesville mill might have been shuttered, locals told Mr McCarthy, were it not for the intervention of the billionaire American investor Wilbur Ross, who led a group that bought the plant in 2003 and later sold it to Luxembourg-based ArcelorMittal. Once again, Mr Ross has a key role in Coatesville, as the current commerce secretary in the Trump cabinet and chief architect of the new tariffs. While Mr Ross was required to divest his steel holdings before becoming a cabinet member, he remained on the board of ArcelorMittal until he took up his post in Washington and maintains close ties to the industry. Mr McCarthy recalled that the former Ross firm made a big investment in Chinese steel shortly after Mr Ross joined the cabinet; and Mr Ross declared in a January report arguing in favour of the tariffs that “domestic steel production is essential for national security.”  Mr McCarthy observed that the idea that American steel is vital to national security resonates in Coatesville, whose steel plates have been used to build every operational US aircraft carrier as well as nuclear submarines, M1 Abrams tanks, and key infrastructure such as bridges and power plants. The plant’s standard products are plates 160" long, 206" wide, and up to 19" thick, cut to length. “One of the advantages that Coatesville has is the fact that it makes armour plate which is utilised by the military,” said Mr Paul of the Washington-based AAM. “It’s a substantial part of the business model there. If the US is building aircraft carriers and other large-ticket items like that, there will be work for mills like Coatesville.” When tariffs on imported steel and aluminium were imposed in late March, the Trump administration said it would allow companies to apply for exemptions for products not readily available in the United States. The US Commerce Department on 21 st June granted its first exemptions from the 25 per cent steel tariffs to seven companies for 42 products sourced from Japan, Sweden, Belgium, Germany and China. The companies included the razor maker Schick Manufacturing and Nachi America, which makes cutting tools, bearings and hydraulics. But the department denied exemption requests for 56 products from companies including Bekaert, a maker of steel wire, and Mills Products, a metal fabricator. The Trump tariffs are sowing discord among USA companies

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Wire & Cable ASIA – September/October 2018