Special request for support to develop a responsible, fact-based analysis to address concerns relating to the recent initiation of an investigation to determine the effects on national security of steel imports

To: All AIIS Members and other interested parties whose livelihoods depend upon the free and responsible importing of steel

Subject: Special request for support to develop a responsible, fact-based analysis to address concerns relating to the recent initiation of an investigation to determine the effects on national security of steel imports

From: AIIS Board Chairman John Foster

Date: May 4, 2017

Falls Church, VA. May 4, 2017. Ladies and gentlemen, we urgently need your generous assistance.

I am writing to request a special, one-time contribution, as much as you can afford, to help us defray the costs of developing a responsible, fact-based analysis to address the April 20, 2017 initiation of a Commerce Department investigation under section 232(b)(1)(A) of the Trade Expansion Act of 1962 to “…determine the effects on national security of steel imports.”

As you have heard us say many times, the AIIS is the last real voice in Washington for free and responsible trade in steel. As we have also noted many times, a strong and healthy domestic steel industry is important for America’s economy. As President Kennedy famously stated, “a rising tide lifts all the boats.” A healthy, robust domestic steel industry, and a vibrant steel importing sector, are both essential for our domestic manufacturing base, and are both associated with vigorous, sustained GDP growth. Our manufacturing sector has been well served by both domestic and foreign producers in a roughly 80/20% ratio respectively over the last several decades. This ratio has been instrumental in keeping our downstream manufacturers globally competitive. In fact, because it was economically prudent to do so, 19.8% of all imported steel in 2016 was purchased by domestic mills in the form of slabs, blooms and billets. If our steel-using manufacturers are not able to effectively compete globally, the entire steel supply chain will suffer, jeopardizing the livelihoods of the tens of thousands of men and women whose jobs depend on it.

In our view, responsibly traded imports of steel are not the major problem facing the domestic producers, but rather the ever-cyclical, prevailing market conditions, a continuing global over supply of steel, and, with all due respect, certain inherent cost and/or efficiency issues in some cases. An AIIS representative sat side-by-side with representatives of domestic producers at last year’s USTR hearing to address mutually recognized global over supply problems. We helped lead the discussion at this hearing on China’s extensive use of trade-distorting, state-owned enterprises, which are so often at the heart of those problems. These are issues that hurt all of us in the global steel realm, and together we forged an alliance that succeeded in placing them at the top of the Administration’s agenda for the G 20 Summit. As a consequence of United States leadership in this matter, the G 20 countries formally recognized that the global excess capacity in steel was a most serious problem requiring an effective, collective response. The Global Steel Over Supply Forum, the first global initiative of its kind, was created as a result.
All that said, it is not news that the new Administration is taking a notably aggressive stance with respect to existing and proposed trade agreements.

Regardless of one’s politics, this can be viewed as being proactive, especially where the United States is thought to have been disadvantaged as a consequence of certain positions.

As companies whose livelihoods depend upon the international steel supply chain, I respectfully suggest that we ought to emphasize two points with respect to the new Administration’s approach to trade. First, we must stress a deliberate, thoughtful approach, taking care not to throw out the baby with the bath water, as the saying goes. In addition, we must also be diligent in making sure that the Administration does not overreach by unnecessarily constricting one economic sector to the detriment of our manufacturing base, and the tens of thousands of jobs that comprise the imported steel supply chain: union and non-union longshoremen, our blue and brown water ports, steamship carriers, truckers, warehousing and material handlers, railroad and barging companies, Customs brokers, insurance carriers, and of course, the steel trading companies themselves.

This will take a special effort outside of the normal course of our business, and that requires special funding. The AIIS is mounting several initiatives to clearly, factually, and respectfully highlight the potential harm of overreaching with new, unwarranted steel trade restrictions, particularly as it also seeks to enhance the economy’s low performance over the past several years.

Accordingly, we request your generous assistance for the following:

1) To engage a top economic group to accurately quantify the negative effects of new, unwarranted import restrictions on responsibly traded steel on jobs, tax revenues, and supply chain efficiencies of responsibly traded steel imports.

2) To update our Martin Study of 2006 specifically addressing the negative effects on the nation’s port communities and Maritime Transportation System.

3) To defray related logistics and professional services costs to effectively advance our position at the leading edge of any and all opportunities in Washington, D.C. and elsewhere, particularly in any hearings or other forums where such a voice is needed.

We estimate that these costs will amount to approximately $150,000 or more. We urgently need your help to support the jobs and industry sectors mentioned above. Your contribution of $1,000, $10,000, or more, to this extraordinarily important cause will help us mount the most effective effort on your behalf, and on behalf of our entire steel supply chain.

If we do not embrace this challenge together, there will be no other voice.

Please send your most generous contribution to:

American Institute for International Steel
701 West Broad Street
Suite 301
Falls Church, Va. 22046

Alternatively, you may contact Assistant Director Alexandra Jopp at Jopp@aiis.org to arrange for an electronic payment.

Best regards.

John D. Foster
AIIS Chairman
American Institute for International Steel |Tel: 713-875-1236
Visit us online at www.aiis.org

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