Manufacturers, Steel Companies Anxiously Await Trump's Decision On Imports

Oct 27, 2017

Right to left: Mar-Mac Wire CEO John Martin and his son Jarrett Martin use steel produced in the U.S. and abroad at their plant in McBee, SC.
Credit Alex Olgin / WFAE News

Robotic arms coil 335 feet of steel wire into a roll four-and-a-half inches in diameter.  It is then dropped onto a conveyor belt. Where workers at Mar-Mac Wire in McBee, SC, package it into boxes.

John Martin owns the company based 70 miles southeast of Charlotte. He says this rebar tie wire is the core of his business.

“Anytime you build a bridge, a dam or the World Trade Center,” he said. “You may very well be using our rebar tie wire.”  

On this day, about two-thirds of the raw steel he has at the plant is from U.S. steel mills. The rest is steel imported at a lower cost. He worries a decision from President Trump could make steel imports more expensive.

A cornerstone of Trump’s presidential campaign was reviving America’s factories. But he now is weighing a decision that could pit steel producers against the companies that use the material to assemble those finished products.

“If all of a sudden there are tariffs on our raw material, we know that prices will go up,” Martin said. “But we really don’t know what all the results will be.”

That’s because the president could do a variety of things under a trade law that allows him to designate cheap steel imports as a threat to the country’s national security. That’s only been used twice since the 1980s. Martin just isn’t sure what to expect.

“Businessmen thrive on predictability,” he said.  

And he’s concerned his business may suffer. Especially if the president chooses to raise tariffs on cheap imported steel.  

But steel companies would welcome those trade restrictions and soon. Steel imports are up 20 percent from last year, according to federal data. Nucor Corporation, headquartered in Charlotte, is one of the largest steel producers in the country with more than two dozen mills in the Southeast. 

“They’ve been shipping in, shipping in, shipping in,” Nucor CEO John Ferriola says. “And as this continues to get delayed they continue to surge. And it’s reached a critical point now.”

Nucor has a few connections to the White House. Former CEO Dan DiMicco was a campaign advisor to Trump, and Ferriola was part of the president’s manufacturing council before it was disbanded. Ferriola said Nucor has been bringing individual trade cases for years to deal with the problem, but that’s inefficient and expensive.

“We call it whack-a-mole. You finally beat one down another one pops up,” he said. “It is just an endless process.”

The Commerce Department released a preliminary finding in one of those cases this week. The department said companies from seven countries were exporting steel to the states at an unfairly low cost. The company is still awaiting a final trade court ruling on that. There have been a couple thousand of similar investigations over the past three decades. So while this week’s finding may be a minor victory, Ferriola wants the president to use a use a law that would deal with cheap steel imports more broadly.

“We are not asking for protection,” he said. “I just go crazy when I hear people say the steel industry is asking for protection. What we want is a level playing field.”

But protection is what Chad Bown calls it. He’s a trade economist with the Peterson Institute for International Economics. He worries this could open the floodgates for manufacturers, who use steel in the products they make.

“Those downstream industries could say you know what because we’re having a difficult time competing with imports, we should deserve protection as well,’ Bown said. “They could be the next industries that come forward and say, 'Hey I want to file my own case to stop imports from coming in from the products I make and have to compete in the American market for.'"

It’s unclear when Trump will announce a decision on the steel imports. Administration officials have said he has other policy priorities he wants to address first.