April 12, 2016

Norfolk Iron & Metal President Tells USTR to Make Addressing Global Steel Oversupply a Stated Principle of U.S Trade Policy

Contact: Ashley DeVecht, director of communications, 847-485-3011 or 616-260-2785

Dianna Smoljan, 708-945-7405

Norfolk Iron & Metal President Tells USTR to Make Addressing Global Steel Oversupply a Stated Principle of U.S Trade Policy

Washington, D.C., April 12, 2016 — Today, Richard A. Robinson, president of Norfolk Iron and Metal and Chairman of the Metals Service Center Institute (MSCI) which represents both steel mills and service centers, told the Office of the U.S. Trade Representative (USTR) that global steel oversupply is fueled by intentional actions by foreign governments and that, to address the issue, the U.S. government must directly engage with U.S. trading partners through negotiation. Robinson said USTR should make it a stated principle objective to target countries that use market distorting policies to inflate supply and should increase efforts to address currency manipulation.

“The disjunction between capacity and demand has been fueled in large part by intentional actions of foreign governments,” Robinson said. “In particular, China has, through various anti- competitive mechanisms such as massive state-sponsored subsidies, substantially increased its domestic steel industry in the last several years, including during a time of stagnant—and negative—growth in its own steel consumption.”

Robinson testified on behalf of MSCI at USTR hearing in Washington, D.C., arguing U.S. government policy must ensure a healthy source of supply and a healthy customer base. Robinson noted MSCI member services centers supply the steel requirements of more than 300,000 downstream manufacturers and fabricators and that, collectively, service centers are the largest domestic customers of U.S. mills, purchasing more than 30 percent of all carbon and more than 50 percent of all specialty steels produced and distributed in the United States.

“There is no question that the U.S. steel industry has suffered from these developments, as measured by demand for carbon steel, which is reflected in service center shipments,” argued Robinson. “Today, MSCI member company shipments are only 65% of peak shipments just prior to the 2008 recession.”

In comments submitted to USTR in late March, MSCI argued U.S. policy makers must “consider the impact of U.S. trade policy on downstream U.S. markets and U.S. manufacturers, as well as domestic steel producers.” MSCI recommended the U.S. government:

  1. Engage with U.S. trading partners directly to reduce global excess capacity through negotiation and make it a stated principle objective of U.S. trade policy to target excess capacity in countries that increase capacity through market distorting policies;
  2. Increase efforts to address currency manipulation; and
  3. If the U.S. government imposes additional tariffs on imported steel, avoid unintended damage to the U.S. manufacturers that utilize steel by imposing a corresponding and offsetting tariff on steel-containing products identified by USTR in consultation with domestic steel consuming companies.

“MSCI is a strong proponent of free and fair trade,” Robinson said in his testimony. “However, the effectiveness of trade agreements in promoting free and fair trade depends on vigorous monitoring of each party’s compliance and prompt and vigorous enforcement against violators.”

In addition to submitting comments to USTR, MSCI has joined Manufacturers for Trade Enforcement, a coalition of leading U.S. industry groups opposed to the automatic granting of market economy status for China. Through this coalition, MSCI will advocate for measures to address global steel oversupply.

Founded in 1909, the Metals Service Center Institute is a nonprofit association based in Rolling Meadows, Ill., serving the metals industry. It serves more than 300 members in over 1,200 locations in North America. For more information, visit www.MSCI.org, MSCI’s new online resource MSCI.org/Edge, like us on Facebook, follow us on Twitter, and connect with us on LinkedIn.