Trump must put American steel first to protect our national security

In recent days, President Trump has made clear that he is considering taking decisive action to help save thousands of American jobs. Last week, President Trump noted that China and other nations are “dumping steel and destroying our steel industry. They’ve been doing it for decades, and I’m stopping it.”

President Trump is right. The American steel industry is facing a crisis that endangers U.S. national security. The United States is in danger of becoming reliant on foreign sources for the steel it needs for defense, critical infrastructure, and the thousands of other steel products that a modern industrial economy requires.

{mosads}In April, President Trump instructed the U.S. Department of Commerce to investigate whether foreign steel imports are a threat to America’s national security. Imports of steel have reached epic proportions, and now hold nearly 30 percent of the U.S. market. As a consequence, domestic steel producers have been forced to reduce production, close facilities, and lay off thousands of hardworking Americans.

As the president of the Steel Manufacturers Association, which represents the electric arc furnace segment of the domestic steel industry, I have witnessed firsthand the threat posed to U.S. national security by foreign steel imports. Approximately 70 percent of all steel in the United States is made through the electric arc furnace process.

American electric arc furnace producers are the safest, most efficient, most sustainable, and most productive steelmakers in the world. Our industry is a reliable supplier of low-cost, high-quality, high-end steel to tens of thousands of steel users across the United States. Yet even our most efficient electric arc furnace producers cannot compete against the flood of imports.

While steel is clearly vital to national defense, this question goes far beyond the direct role of steel in military applications. Our national security also involves our nation’s critical infrastructure, including transportation, which is supported by rebar and long product steel producers, and the electrical grid, which relies upon our electrical and specialty steel makers. It also involves our energy and water distribution systems, which are supplied by our nation’s pipe and tube manufacturers. Simply put, a sustainable national defense requires a sustainable domestic steel industry.

The real long-term problem is global steel overcapacity. The flood of steel imports into the United States is the direct result of the deliberate actions of the governments in China and elsewhere to expand and support their domestic steel industries without any regard to the needs of the market. At the G-20 summit last week, world leaders agreed that global steel overcapacity is a key issue. G-20 leaders also recognized “the role of legitimate trade defense instruments.”

The United States has repeatedly attempted to convince other countries to negotiate a solution, but they have refused. Now the United States faces a stark choice. It can either act on its own to preserve a viable steel industry, or it can become dependent upon other countries for this essential material.

If the Commerce Department finds that imports are threatening the national security, Secretary Wilbur Ross must propose action to the president. To ensure that the United States can continue to produce the steel we need, Secretary Ross should recommend to President Trump that he impose a tariff on imports of steel.

A tariff is the simplest, the most easily administered, and the most immediately effective action possible. This tariff should cover all products (including semi-finished products) from all countries, with very limited exceptions. The tariff level should be high enough to have an impact.

The need for action is pressing. Steel imports in the first half of 2017 were more than 20 percent higher than in 2016. Only urgent action by President Trump will enable the domestic steel industry to return to sustainable levels of production, and only this will convince countries like China that they must take concrete steps to reduce their overcapacity.

Ultimately, action under Section 232 will enhance the national security of the United States and help create a more productive, sustainable, and prosperous world economy. Now is the time for President Trump to follow through on his commitment to put America first and help save thousands of American steel jobs.

Philip K. Bell is president of the Steel Manufacturers Association, North America’s largest steel industry trade association and the primary association for electric arc furnace steel producers.

The views expressed by contributors are their own and are not the views of The Hill.