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Senators press Trump to protect U.S. steel production

Ohio’s two senators urged President Trump Tuesday to protect thousands of jobs in Ohio — including about 2,700 at AK Steel Corp. in Butler County — by imposing tariffs on steel imports.

U.S. Sens. Sherrod Brown (D) and Rob Portman (R) said President Trump should confront what they say is Chinese steel “overcapacity,” or the importing of artificially high levels of steel into the United States.

Brown and Portman were among several lawmakers who met with the President in the White House to discuss the global steel trade.

The American Iron and Steel Institute — of which AK Steel is a member — says foreign government subsidies for steel have resulted in “massive global steel overcapacity” of more than 700 million metric tons, some seven times U.S. raw steel production.

“We strongly believe that the ongoing high level of imports is a threat to the national security of our country,” said Lisa Jester, a spokeswoman for AK Steel. “This is especially true for electrical steels which are used to manufacture power generation, transmission and distribution transformers that serve as the backbone of our nation’s electric power grid.”

AK Steel is known for its electrical steels, among its other products.

“I’m concerned about electrical steel leaving our country altogether,” Portman said in a conference call.

Such steel is necessary for crucial electrical grid components, and Portman called it a “national security issue.”

“The president got a lot of points of view, and we talked about the obvious concerns of states like mine,” Portman said.

The president has until April to make a decision on steel import restrictions.

About a month ago the Commerce Department gave the president the results of an investigation into steel and aluminum imports, giving him 90 days to respond. It’s unclear what the results indicated to the president.

Trump has been weighing protective trade action under a rarely used ‘Section 232’ of the U.S. trade law, which allows for restrictions on imports to protect national security.

U.S. steel executives have been urging the president to take just such an action.

“I think they ought to make a decision on 232,” Portman said. If Trump delays a decision, he fears other countries will try to import as much steel as they can as quickly as they can, he said.

“We have made important progress toward a new trade agenda that puts Ohio workers first, from pulling out of the Trans-Pacific Partnership to standing up for Whirlpool workers in Clyde,” Brown said in his own statement before the Trump meeting this week.

Whirlpool Corp. last month said it is adding 200 jobs at its Clyde, Ohio plant after the administration imposed a tariff of up to 50 percent on large residential washing machines, a penalty aimed at rival manufacturers Samsung Electronics Co. and LG Electronics Inc.

“But there is more work to do, including swift action to crack down on Chinese steel overcapacity that is costing American jobs,” Brown added.

Lisa Harrison, a senior vice president for AISI, said the institute is calling for the invocation of Section 232 because steel imports continue to rise “at an unacceptably high level.”

“It’s this flood of imports that drive our steel producers out of business,” she said.

National defense needs reliable, American-made steel, she said. But so do the utility, energy, water, transportation and infrastructure markets, she added.

“Our military could never be sure that their (foreign) orders (for steel) would be processed to the needed specifications in a timely manner,” she said. “And steel-consuming industries would be in the same boat.”

Gary Hufbauer, a non-resident senior fellow at the Washington, D.C.-based Petersen Institute for International Economics, said invoking Section 232 would not be a good idea, even though steel producers favor that approach.

Here’s one problem: Companies like Caterpillar and GE, also big Ohio employers, will pay higher prices for steel if such restrictions were imposed, he said.

“I’d assume they’re actively lobbying against it,” Hufbauer said of steel-consuming companies. Those companies employ many more workers than steel producers, he added.

Hufbauer said the administration finds itself in a trade “box” when it comes to steel.

While China may be a convenient target in these disputes, imports from China are actually down to under a million tons a year these days “and probably headed south.”

Instead, most steel imports today come from military allies such as Germany, Japan and South Korea, he said.

Trump is “having difficulty formulating a policy or he would have done so already,” Hufbauer said.

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