THE EFFECT OF IMPORTS OF STEEL ON 

THE NATIONAL SECURITY 

AN INVESTIGATION CONDUCTED UNDER SECTION 232 OF THE 

TRADE EXPANSION ACT OF 1962, AS AMENDED 

U.S. Department of Commerce 

Bureau of Industry and Security 

Office of Technology Evaluation
 

January 11, 2018
	
 

THE EFFECT OF IMPORTS OF STEEL ON THE NATIONAL SECURITY
	

TABLE OF CONTENTS
 

I/ EXECUTIVE SUMMARY ..................................................................................................... 1
 

II/ LEGAL FRAMEWORK ....................................................................................................... 11
 

III/ INVESTIGATION PROCESS .............................................................................................. 18
 

A. Initiation of Investigation................................................................................................... 18
	

B. Public Hearing................................................................................................................... 18
	

C. Public Comments ............................................................................................................... 18
	

D. Interagency Consultation................................................................................................... 19
	

IV. PRODUCT SCOPE OF THE INVESTIGATION, ................................................................. 21
 

V. FINDINGS............................................................................................................................. 23
 

A. Steel is Important to U.S. National Security ...................................................................... 23
	

1. Steel is Needed for National Defense Requirements ..................................................... 23
	

2. Steel is Required for U.S. Critical Infrastructure ........................................................... 23
	

3. Domestic Steel Production is Essential for National Security Applications.................. 24
	

4. Domestic Steel Production Depends on a Healthy and Competitive U.S. Industry....... 25
	

5. Steel Consumed in Critical Industries............................................................................ 25
	

B. Imports in Such Quantities as are Presently Found Adversely Impact the Economic
	

Welfare of the U.S. Steel Industry.............................................................................................. 27
	

1. Imports of Steel Products Continue to Increase ............................................................. 27
	

2. High Import Penetration................................................................................................. 29
	

3. High Import to Export Ratio .......................................................................................... 30
	

4. Steel Prices ..................................................................................................................... 31
	

5. Steel Mill Closures......................................................................................................... 33
	

6. Declining Employment Trend Since 1998 ..................................................................... 35
	

7. Trade Actions – Antidumping and Countervailing Duties ............................................. 36
	

8. Loss of Domestic Opportunities to Bidders Using Imported Steel................................ 36
	

9. Financial Distress ........................................................................................................... 37
	

10. Capital Expenditures ...................................................................................................... 40
	

C. Displacement of Domestic Steel by Excessive Quantities of Imports has the Serious Effect
	

of Weakening Our Internal Economy ........................................................................................ 41
	

1. Domestic Steel Production Capacity is Stagnant and Concentrated .............................. 41
	

2. Production is Well Below Demand ................................................................................ 46
	
3. Utilization Rates are Well Below Economically Viable Levels ..................................... 47
	

4. Declining Steel Production Facilities Limits Capacity Available for a National
	

Emergency .............................................................................................................................. 49
	

D. Global Excess Steel Capacity is a Circumstance that Contributes to the Weakening of the
	

Domestic Economy.................................................................................................................... 51
	

1. Free markets globally are adversely affected by substantial chronic global excess steel
	

production led by China.......................................................................................................... 51
	

2. Increasing global excess steel capacity will further weaken the internal economy as U.S.
	

steel producers will face increasing import competition ........................................................ 53
	

VI. CONCLUSION ..................................................................................................................... 55
 

VII. RECOMMENDATION ......................................................................................................... 58
 

Prepared by Bureau of Industry and Security
	

http://www.bis.doc.gov
 
APPENDICES 

APPENDIX A: Section 232 Investigation Notification Letter to Secretary of 

Defense James Mattis (April 19, 2017); Department of Defense Response to 

Notification (May 8, 2017) 

APPENDIX B: Presidential Memorandum for the Secretary of Commerce - Steel 

Imports and Threats to National Security (April 20, 2017)
	

APPENDIX C: Federal Register - Notice Request for Public Comments and 

Public Hearing on Section 232 National Security Investigation of Imports of Steel 

(April 21, 2017)
	

APPENDIX D: Federal Register - Notice on Procedures for Attending or Viewing 

Remotely the Public Hearing on Section 232 National Security Investigation of 

Imports of Steel (May 17, 2017)
	

APPENDIX E: Public Hearing Witnesses 

APPENDIX F: Public Hearing Testimonies 

APPENDIX G: Public Comments 

APPENDIX H: Uses of Steel for National Defense 

APPENDIX I: Uses of Steel for Critical Infrastructure 

APPENDIX J: U.S. Government Steel Measures and Actions 

APPENDIX K: Steel Orders in Effect as of January 11, 2018 

APPENDIX L: Global Excess Capacity in Steel Production 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I. EXECUTIVE SUMMARY 

Overview 

This report summarizes the findings of an investigation conducted by the U.S. 

Department of Commerce (the “Department”) pursuant to Section 232 of the Trade 

Expansion Act of 1962, as amended (19 U.S.C. §1862 (“Section 232”)), into the 

effect of imports of steel mill products (“steel”) on the national security of the United 

States. 

In conducting this investigation, the Secretary of Commerce (the “Secretary”) 

noted the Department’s prior investigations under Section 232. This report 

incorporates the statutory analysis from the Department’s 2001 Report1 with respect 

to applying the terms “national defense” and “national security” in a manner that is 

consistent with the statute and legislative intent.2 As in the 2001 Report, the 

Secretary in this investigation determined that “national security” for purposes of 

Section 232 includes the “general security and welfare of certain industries, beyond 

those necessary to satisfy national defense requirements, which are critical to 

minimum operations of the economy and government.”3 

As required under Section 232, the Secretary examined the effect of imports 

on national security requirements, including: domestic production needed for 

projected national defense requirements; the capacity of domestic industries to meet 

such requirements; existing and anticipated availabilities of the human resources, 

products, raw materials, and other supplies and services essential to the national 

defense; the requirements of growth of such industries and such supplies and 

services including the investment, exploration, and development necessary to assure 

such growth; and the importation of goods in terms of their quantities, availabilities, 

character, and use as those affect such industries; and the capacity of the United 

States to meet national security requirements. 

1 Department of ommerce, ureau of Export !dministration- The Effect of Imports of Iron Ore and Semi-Finished 

Steel on the National Security- Oct/ 2001 (͞2001 Report͟)/

2 Id. at 5/

3 Id. 

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The Secretary also recognized the close relation of the economic welfare of 

the United States to its national security; the impact of foreign competition on the 

economic welfare of individual domestic industries; and any substantial 

unemployment, decrease in revenues of government, loss of skills, or any other 

serious effects resulting from the displacement of any domestic products by 

excessive imports, without excluding other factors, in determining whether a 

weakening of the U.S. economy by such imports may impair national security. In 

particular, this report assesses whether steel is being imported “in such quantities” 

and “under such circumstances” as to “threaten to impair the national security.”4 

Findings 

In conducting the investigation, the Secretary found: 

A. Steel is Important to U.S. National Security 

1.	 National security includes projected national defense requirements for 

the U.S. Department of Defense. 

2.	 National security also encompasses U.S. critical infrastructure sectors 

including transportation systems, the electric power grid, water systems, 

and energy generation systems. 

3.	 Domestic steel production is essential for national security applications. 

Statutory provisions illustrate that Congress believes domestic 

production capability is essential for defense requirements and critical 

infrastructure needs, and ultimately to the national security of the United 

States.5 U.S. Government actions on steel across earlier Administrations 

4	 19 U/S// § 1862(b)(3)(!)/

5	 See, e/g/, 15 U/S// § 271(a)(1)(͞The future well-being of the United States economy depends on a strong

manufacturing base0͟)- 50 U/S// § 4502(a)(͞ongress finds that – (1) the security of the United States is

dependent on the ability of the domestic industrial base to supply materials and services0 (2)() to provide for

the protection and restoration of domestic critical infrastructure operations under emergency conditions0͟- and

!merican Recovery and Reinvestment !ct, P/L/ 111-5, §1605, 123 Stat/ 303 (Feb/ 17, 2009) (providing that none

of the funds appropriated or made available by the act may be used for the construction, alteration, maintenance,

or repair of a public building or public work unless the iron, steel, and manufactured goods are produced in the

United States)/

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further demonstrate domestic steel production is vital to national 

security.6 

4.	 Domestic steel production depends on a healthy and competitive U.S. 

industry. The principal types of mills that produce steel are integrated 

mills with basic oxygen furnaces (BOFs); mini-mills using electric arc 

furnaces (EAFs); re-roller/converter; and metal coater facilities. Basic 

oxygen furnaces convert raw materials into steel, and remain critical for 

continued innovation in steel technology. Covered in this report are five 

categories of steel products that are used for national security 

applications: flat, long, semi-finished, pipe and tube, and stainless. 

5.	 The Department found that demand for steel in critical industries has 

increased since the Department’s last investigation in 2001. The 2001 

Report determined that there was 33.68 million tons of finished steel 

consumed in critical industries per year in the United States based on 

1997 data.7 The Department updated that analysis for this report using 

2007 data (the latest available) and determined that domestic 

consumption in critical industries has increased significantly, with 54 

million metric tons of steel now being consumed annually in critical 

industries. 

B.	 Imports in Such Quantities as are Presently Found Adversely Impact the 

Economic Welfare of the U.S. Steel Industry 

1.	 The United States is the world’s largest steel importer. In the first ten 

months of 2017 steel imports have increased at a double-digit rate over 

2016, accounting for more than 30 percent of U.S. consumption. 

Notwithstanding numerous anti-dumping and countervailing duty orders, 

which are limited in scope, imports of most types of steel continue to 

increase. 

6	 See infra, section V(!)(3) and !ppendix J/

7	 2001 Report at 14/ The 2001 Report is not clear whether it used short tons or metric tons/ If short tons were

used then the metric ton equivalent is 30/56 million metric tons/

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2.	 Import penetration levels for flat, semi-finished, stainless, long, and pipe 

and tube products continue on an upward trend above 30 percent of 

domestic consumption. 

3.	 Imports are nearly four times U.S. exports. 

4.	 Imports are priced substantially lower than U.S. produced steel. 

5.	 Excessive steel imports have adversely impacted the steel industry. 

Numerous U.S. steel mill closures, a substantial decline in employment, 

lost domestic sales and market share, and marginal annual net income for 

U.S.-based steel companies illustrate the decline of the U.S. steel industry. 

C. Displacement of Domestic Steel by Excessive Quantities of Imports has the 

Serious Effect of Weakening our Internal Economy 

1.	 As steel imports have increased, U.S. steel production capacity has been 

stagnant and production has decreased. 

2.	 Since 2000, foreign competition and the displacement of domestic steel by 

excessive imports have resulted in the closure of six basic oxygen furnace 

facilities and the idling of four more (which is more than a 50 percent 

reduction in the number of such facilities), a 35 percent decrease in 

employment in the steel industry, and caused the domestic steel industry 

as a whole to operate on average with negative net income since 2009. 

3.	 The declining steel capacity utilization rate is not economically 

sustainable. Utilization rates of 80 percent or greater are necessary to 

sustain adequate profitability and continued capital investment, research 

and development, and workforce enhancement in the steel sector. 

D. Global Excess Steel Capacity is a Circumstance that Contributes to the 

Weakening of the Domestic Economy 

1.	 In the steel sector, free markets globally are adversely affected by 

substantial chronic global excess steel production led by China. The 

world’s nominal crude steelmaking capacity reached about 2.4 billion 

metric tons in 2016, an increase of 127 percent compared to the capacity 

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level in 2000, while steel demand grew at a much smaller rate. In 2016 

there was a 737 million metric ton global gap between steelmaking 

capacity and steel crude demand, which means there is unlikely to be any 

market-driven reduction in steel exports to the United States in the near 

future. 

8 

2.	 While U.S. steel production capacity has remained flat since 2001, other 

steel producing nations have increased their production capacity, with 

China alone able to produce as much steel as the rest of the world 

combined. This overhang of excess capacity means that U.S. steel 

producers, for the foreseeable future, will face increasing competition 

from imported steel as other countries export more steel to the United 

States to bolster their own economic objectives and offset loss of markets 

to Chinese steel exports. 

Conclusion 

Based on these findings, the Secretary of Commerce concludes that the 

present quantities and circumstance of steel imports are “weakening our internal 

economy” and threaten to impair the national security as defined in Section 232. The 

Secretary considered the Department’s narrower investigation of iron ore and semifinished steel imports in 2001, which recommended no action be taken, and finds 

that several important factors – the broader scope of the investigation, the level of 

global excess capacity, the level of imports, the reduction in basic oxygen furnace 

facilities since 2001, and the potential impact of further plant closures on capacity 

needed in a national emergency, support recommending action under Section 232. 

In light of this conclusion, the Secretary has determined that the only effective means 

of removing the threat of impairment is to reduce imports to a level that should, in 

combination with good management, enable U.S. steel mills to operate at 80 percent 

or more of their rated production capacity. 

Source. Global Forum report- http.//www/bmwi/de/Redaktion/EN/Downloads/global-forum-on-steel-excesscapacity-report/pdf

5

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Recommendation 

Prior significant actions to address steel imports using quotas and/or tariffs 

were taken under various statutory authorities by President George W. Bush, 

President William J. Clinton (three times), President George H. W. Bush, President 

Ronald W. Reagan (three times), President James E. Carter (twice), and President 

Richard M. Nixon, all at lower levels of import penetration than the present level, 

which is greater than 30 percent. 

Due to the threat, as defined in Section 232, to national security from steel 

imports, the Secretary recommends that the President take immediate action by 

adjusting the level of these imports through quotas or tariffs. The quotas or tariffs 

imposed should be sufficient, even after any exceptions (if granted), to enable U.S. 

steel producers to operate at an 80 percent or better average capacity utilization rate 

based on available capacity in 2017 (see Figure 1). 

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Figure 1. Import Levels and U.S. Steel Mill Capacity Utilization Rates* 

Steel Market Snapshot (millions of metric tons) 2011-2016 

Average 

2017 

Annualized 

Total Demand for Steel in U.S. (production + imports-exports) 105.5 107.3 

U.S. Annual Capacity 114.4 113.3 

U.S. Annual Production (liquid) 84.6 81.9 

Capacity Utilization Rate (percentage) 74.0 72.3 

Imports and Exports (millions of metric tons) 

Imports of Steel to U.S. (including semi-finished) 31.8 36.0 

Exports of Steel from the U.S. 10.8 10.1 

Percent Import Penetration 30.1 33.8 

Production at Various Utilization Rates (millions of metric tons) 

Maximum Capacity 114.4 113.3 

Production at 75% Capacity Utilization 85.8 85.0 

Production at 80% Capacity Utilization 91.5 90.6 

Production at 85% Capacity Utilization 97.2 96.3 

Import Levels and Domestic Production Targets Based on 80% Capacity Utilization 

General Equilibrium (GTAP Model – Includes Reduction in Exports and Demand) 

Maximum Import Level (mmt) 22.7 

Estimated Import Penetration 22% 

Estimated Production (mmt) 90.6 

Alternative 1A: Quota Applied to 2017 Import Levels 63% 

Alternative 1B: Tariff Rate Applied to All Imports 24% 

*Numbers may differ slightly due to rounding. 

Sources: United States Department of Commerce, Bureau of the Census; American Iron and Steel 

Institute. Calculations based on industry and trade data. 

The Secretary recommends that the President impose a quota or tariff on all 

steel products covered in this investigation imported into the United States to remove 

the threatened impairment to national security. 

Alternative 1 – Global Quota or Tariff 

1A. Global Quota 

Impose quotas on all imported steel products at a specified percent of the 2017 

import level, applied on a country and steel product basis. 

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According to the Global Trade Analysis Project (GTAP) Model9, produced by 

Purdue University, a 63 percent quota would be expected to reduce steel imports by 

about 37 percent (13.3 million metric tons) from 2017 levels. Based on imports from 

January to October, import levels for 2017 are projected to reach 36.0 million metric 

tons. This action would result in imports equaling about 22.7 million metric tons, 

which will enable an 80 percent capacity utilization rate at 2017 demand levels 

(including exports). 

1B. Global Tariff 

Apply a tariff rate on all imported steel products, in addition to any 

antidumping or countervailing duty collections applicable to any imported steel 

product. 

According to the Global Trade Analysis Project (GTAP) Model, produced by 

Purdue University, a 24 percent tariff on all steel imports would be expected to 

reduce imports by 37 percent (i.e., a reduction of 13.3 million metric tons from 2017 

levels of 36.0 million metric tons). This tariff rate would thus result in imports 

equaling about 22.7 million metric tons, which will enable an 80 percent capacity 

utilization rate at 2017 demand levels (including exports). 

Alternative 2 – Tariffs on a Subset of Countries 

Apply a tariff rate on all imported steel products from Brazil, South Korea, 

Russia, Turkey, India, Vietnam, China, Thailand, South Africa, Egypt, Malaysia and 

Costa Rica, in addition to any antidumping or countervailing duty collections 

applicable to any steel products from those countries. All other countries would be 

limited to 100 percent of their 2017 import level. 

According to the Global Trade Analysis Project (GTAP) Model, produced by 

Purdue University, a 53 percent tariff on all steel imports from this subset of 

countries would be expected to reduce imports by 13.3 million metric tons from 2017 

The standard GT!P Model is a static multiregional, multisector, computable general equilibrium model, with

perfect competition and constant returns to scale/ The model is based on optimizing behavior by economic 

agents/ The standard GT!P closure allows all prices and wages in the economy to adjust so as to ensure supply 

equals demand in all markets including the labor market/ The estimates in this report were made using the 

GT!P 10 model which has a 2014 base/

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import levels from the targeted countries. This action would enable an increase in 

domestic production to achieve an 80 percent capacity utilization rate at 2017 

demand levels (including exports). The countries identified are projected to account 

for less than 4 percent of U.S. steel exports in 2017. 

Exemptions 

In selecting an alternative, the President could determine that specific 

countries should be exempted from the proposed 63 percent quota or 24 percent tariff 

by granting those specific countries 100 percent of their prior imports in 2017, based 

on an overriding economic or security interest of the United States. The Secretary 

recommends that any such determination should be made at the outset and a 

corresponding adjustment be made to the final quota or tariff imposed on the 

remaining countries. This would ensure that overall imports of steel to the United 

States remain at or below the level needed to enable the domestic steel industry to 

operate as a whole at an 80 percent or greater capacity utilization rate. The limitation 

to 100 percent of each exempted country’s 2017 imports is necessary to prevent 

exempted countries from producing additional steel for export to the United States 

or encouraging other countries to seek to trans-ship steel to the United States through 

the exempted countries. 

It is possible to provide exemptions from either the quota or tariff and still 

meet the necessary objective of increasing U.S. steel capacity utilization to a 

financially viable target of 80 percent. However, to do so would require a reduction 

in the quota or increase in the tariff applied to the remaining countries to offset the 

effect of the exempted import tonnage. 

Exclusions 

The Secretary recommends an appeal process by which affected U.S. parties 

could seek an exclusion from the tariff or quota imposed. The Secretary would grant 

exclusions based on a demonstrated: (1) lack of sufficient U.S. production capacity 

of comparable products; or (2) specific national security based considerations. This 

appeal process would include a public comment period on each exclusion request, 

9
 

 

 

 

 

 

and in general, would be completed within 90 days of a completed application being 

filed with the Secretary. 

An exclusion may be granted for a period to be determined by the Secretary 

and may be terminated if the conditions that gave rise to the exclusion change. The 

U.S. Department of Commerce will lead the appeal process in coordination with the 

Department of Defense and other agencies as appropriate. Should exclusions be 

granted the Secretary would consider at the time whether the quota or tariff for the 

remaining products needs to be adjusted to increase U.S. steel capacity utilization to 

a financially viable target of 80 percent. 

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II.	 LEGAL FRAMEWORK 

I. Section 232 Requirements 

Section 232 provides the Secretary with the authority to conduct 

investigations to determine the effect on the national security of the United States of 

imports of any article. It authorizes the Secretary to conduct an investigation if 

requested by the head of any department or agency, upon application of an interested 

party, or upon his own motion. See 19 U.S.C. § 1862(b)(1)(A). 

Section 232 directs the Secretary to submit to the President a report with 

recommendations for “action or inaction under this section” and requires the 

Secretary to advise the President if any article “is being imported into the United 

States in such quantities or under such circumstances as to threaten to impair the 

national security.” See 19 U.S.C. § 1862(b)(3)(A). 

Section 232(d) directs the Secretary and the President to, in light of the 

requirements of national security and without excluding other relevant factors, give 

consideration to the domestic production needed for projected national defense 

requirements and the capacity of the United States to meet national security 

requirements. See 19 U.S.C. § 1862(d). 

Section 232(d) also directs the Secretary and the President to “recognize the 

close relation of the economic welfare of the Nation to our national security, and 

...take into consideration the impact of foreign competition on the economic welfare 

of individual domestic industries” by examining whether any substantial 

unemployment, decrease in revenues of government, loss of skills or investment, or 

other serious effects resulting from the displacement of any domestic products by 

excessive imports, or other factors, result in a “weakening of our internal economy” 

that may impair the national security. See 19 U.S.C. § 1862(d). 

Once an investigation has been initiated, Section 232 mandates that the 

Secretary provide notice to the Secretary of Defense that such an investigation has 

been initiated. Section 232 also requires the Secretary to do the following: 

(1)	 “Consult with the Secretary of Defense regarding the methodological 

and policy questions raised in [the] investigation;” 

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(2) “Seek information and advice from, and consult with, appropriate 

officers of the United States;” and 

(3) “If it is appropriate and after reasonable notice, hold public hearings or 

otherwise afford interested parties an opportunity to present 

information and advice relevant to such investigation.”10 See 19 U.S.C. 

§ 1862(b)(2)(A)(i)-(iii). 

As detailed in Parts III and V of this report, each of the legal requirements set 

forth above has been satisfied. 

In conducting the investigation, Section 232 permits the Secretary to request 

that the Secretary of Defense provide an assessment of the defense requirements of 

the article that is the subject of the investigation. See 19 U.S.C. § 1862(b)(2)(B). 

Upon completion of a Section 232 investigation, the Secretary is required to 

submit a report to the President no later than 270 days after the date on which the 

investigation was initiated. See 19 U.S.C. § 1862(b)(3)(A). The required report 

must: 

(1)	 Set forth “the findings of such investigation with respect to the effect 

of the importation of such article in such quantities or under such 

circumstances upon the national security;” 

(2)	 Set forth, “based on such findings, the recommendations of the 

Secretary for action or inaction under this section;” and 

(3)	 “If the Secretary finds that such article is being imported into the United 

States in such quantities or under such circumstances as to threaten to 

impair the national security . . . so advise the President.” See 19 U.S.C. 

§ 1862(b)(3)(A). 

10	 Department regulations (i) set forth additional authority and specific procedures for such input from interested

parties, see 15 /F/R/ §§ 705/7 and 705/8, and (ii) provide that the Secretary may vary or dispense with those

procedures ͞in emergency situations, or when in the judgment of the Department, national security interests

require it/͟ Id/, § 705/9/

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All unclassified and non-proprietary portions of the report submitted by the 

Secretary to the President must be published. 

Within 90 days after receiving a report in which the Secretary finds that an 

article is being imported into the United States in such quantities or under such 

circumstances as to threaten to impair the national security, the President shall: 

(1)	 “Determine whether the President concurs with the finding of the 

Secretary;” and 

(2)	 “If the President concurs, determine the nature and duration of the 

action that, in the judgment of the President, must be taken to adjust the 

imports of the article and its derivatives so that such imports will not 

threaten to impair the national security.” See 19 U.S.C. § 

1862(c)(1)(A). 

II. Discussion 

While Section 232 does not contain a definition of “national security”, both 

Section 232, and its implementing regulations at 15 C.F.R. Part 705, contain nonexclusive lists of factors that Commerce must consider in evaluating the effect of 

imports on the national security. Congress in Section 232 explicitly determined that 

“national security” includes, but is not limited to, “national defense” requirements. 

See 19 U.S.C. § 1862(d). The Department in 2001 determined that “national 

defense” includes both defense of the United States directly and the “ability to 

project military capabilities globally.”11 

The Department also concluded in 2001 that “in addition to the satisfaction of 

national defense requirements, the term “national security” can be interpreted more 

broadly to include the general security and welfare of certain industries, beyond 

those necessary to satisfy national defense requirements that are critical to the 

minimum operations of the economy and government.” The Department called 

these “critical industries.”12 This report once again uses these reasonable 

11	 Department of ommerce, ureau of Export !dministration- The Effect of Imports of Iron Ore and Semi-Finished 

Steel on the National Security- Oct/ 2001 (͞2001 Report͟)/

12	 Id. 

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interpretations of “national defense” and “national security.” However, this report 

uses the more recent 16 critical infrastructure sectors identified in Presidential Policy 

Directive 2113 instead of the 28 critical industry sectors used by the Bureau of Export 

Administration in the 2001 Report.14 

Section 232 directs the Secretary to determine whether imports of any article 

are being made “in such quantities or under such circumstances” that those imports 

“threaten to impair the national security.” See 19 U.S.C. § 1862(b)(3)(A). The 

statutory construction makes clear that either the quantities or the circumstances, 

standing alone, may be sufficient to support an affirmative finding. They may also 

be considered together, particularly where the circumstances act to prolong or 

magnify the impact of the quantities being imported. 

The statute does not define a threshold for when “such quantities” of imports 

are sufficient to threaten to impair the national security, nor does it define the 

“circumstances” that might qualify. 

Likewise, the statute does not require a finding that the quantities or 

circumstances are impairing the national security. Instead, the threshold question 

under Section 232 is whether those quantities or circumstances “threaten to impair 

the national security.” See 19 U.S.C. § 1862(b)(3)(A). This formulation strongly 

suggests that Congress expected an affirmative finding under Section 232 would 

occur before there is actual impairment of the national security. 

15 

Section 232(d) contains a considerable list of factors for the Secretary to 

consider in determining if imports “threaten to impair the national security”16 of the 

United States, and this list is mirrored in the implementing regulations. See 19 

13 Presidential Policy Directive 21- ritical Infrastructure Security and Resilience- February 12, 2013 (͞PPD-21͟)/

14 See Op/ it/ at 16/

15 The 2001 Report used the phrase ͞fundamentally threaten to impair͟ when discussing how imports may

threaten to impair national security/ See 2001 Report at 7 and 37/ ecause the term ͞fundamentally͟ is not 

included in the statutory text and could be perceived as establishing a higher threshold, the Secretary expressly

does not use the qualifier in this report/ The statutory threshold in Section 232(b)(3)(!) is unambiguously

͞threaten to impair͟ and the Secretary adopts that threshold without qualification/ 19 U/S// § 1862(b)(3)(!)/ 

The statute also uses the formulation ͞may impair͟ in Section 232(d)/ Id. at 1862(d)/

16 19 U/S// § 1862(b)(3)(!)/

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U.S.C. § 1862(d) and 15 C.F.R. § 705.4. Congress was careful to note twice in 

Section 232(d) that the list they provided, while mandatory, is not exclusive.17 

Congress’ illustrative list is focused on the ability of the United States to maintain 

the domestic capacity to provide the articles in question as needed to maintain the 

national security of the United States.18 Congress broke the list of factors into two 

equal parts using two separate sentences. The first sentence focuses directly on 

“national defense” requirements, thus making clear that “national defense” is a 

subset of the broader term “national security.” The second sentence focuses on the 

broader economy, and expressly directs that the Secretary and the President “shall 

recognize the close relation of the economic welfare of the Nation to our national 

security.”19 See 19 U.S.C. § 1862(d). 

Two of the factors listed in the second sentence of Section 232(d) are most 

relevant in this investigation. Both are directed at how “such quantities” of imports 

threaten to impair national security. See 19 U.S.C. § 1862(b)(3)(A). In 

administering Section 232, the Secretary and the President are required to “take into 

consideration the impact of foreign competition on the economic welfare of 

individual domestic industries” and any “serious effects resulting from the 

displacement of any domestic products by excessive imports” in “determining 

whether such weakening of our internal economy may impair the national security.” 

17	 See 19 U/S// § 1862(d) (͞the Secretary and the President shall, in light of the requirements of national security

and without excluding other relevant factors0͟ and ͞serious effects resulting from the displacement of any

domestic products by excessive imports shall be considered, without excluding other factors0 ͞)/

18	 This reading is supported by ongressional findings in other statutes/ See, e.g., 15 U/S// § 271(a)(1)(͞The

future well-being of the United States economy depends on a strong manufacturing base0͟) and 50 U/S// §

4502(a)(͞ongress finds that – (1) the security of the United States is dependent on the ability of the domestic 

industrial base to supply materials and services0 (2)() to provide for the protection and restoration of

domestic critical infrastructure operations under emergency conditions0 (3)0 the national defense

preparedness effort of the United States Government requires – () the development of domestic productive

capacity to meet – (ii) unique technological requirements0 (7) much of the industrial capacity that is relied

upon by the United States Government for military production and other national defense purposes is deeply

and directly influenced by – (!) the overall competitiveness of the industrial economy of the United States- and

() the ability of industries in the United States, in general, to produce internationally competitive products and

operate profitably while maintaining adequate research and development to preserve competitiveness with

respect to military and civilian production- and (8) the inability of industries in the United States, especially

smaller subcontractors and suppliers, to provide vital parts and components and other materials would impair

the ability to sustain the !rmed Forces of the United States in combat for longer than a short period/͟)/

19	 !ccord 50 U/S// § 4502(a)/

15
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See 19 U.S.C. § 1862(d). Since the 2001 investigation, foreign competition and the 

displacement of domestic steel by excessive imports have resulted in the closure of 

six basic oxygen furnace facilities and the idling of four more (which is more than a 

50 percent reduction in the number of such facilities), a 35 percent decrease in 

employment in the steel industry, and caused the domestic steel industry as a whole 

to operate on average with negative net income since 2009. 

Another factor, not on the list, that the Secretary finds to be a relevant is the 

presence of massive excess capacity for producing steel. This excess capacity results 

in steel imports occurring “under such circumstances” that they threaten to impair 

the national security. See 19 U.S.C. § 1862(b)(3)(A). The circumstance of excess 

global steel production capacity is a factor because, while U.S. production capacity 

has remained flat since 2001, other steel producing nations have increased their 

production capacity, with China alone able to produce as much as the rest of the 

world combined. This overhang of global excess capacity means that U.S. steel 

producers, for the foreseeable future, will continue to lose market share to imported 

steel as other countries export more steel to the United States to bolster their own 

economic objectives and offset loss of markets to Chinese steel exports. 

It is these three factors – displacement of domestic steel by excessive imports 

and the consequent adverse impact on the economic welfare of the domestic steel 

industry, along with global excess capacity in steel – that the Secretary has concluded 

create a persistent threat of further plant closures that could leave the United States 

unable in a national emergency to produce sufficient steel to meet national defense 

and critical industry needs. The Secretary finds this “weakening of our internal 

economy may impair the national security” as defined in Section 232. See 19 U.S.C. 

1862(d). 

The Secretary also considered whether the source of the imports affects the 

analysis under Section 232. In the 2001 Report, “the Department found that iron ore 

and semi-finished steel are imported from reliable foreign sources” and concluded 

that “even if the United States were dependent on imports of iron ore and semifinished steel, imports would not threaten to impair national security.” 2001 Report 

at 27. However, because Congress in Section 232 chose to explicitly direct the 

Secretary to consider whether the “impact of foreign competition” and 

“the 

16
 

 

 

 

 

 

 

 

 

 

 

displacement of any domestic products by excessive imports” are “weakening our 

internal economy” but made no reference to an assessment of the sources of imports, 

it appears likely that Congress recognized adverse impacts might be caused by 

imports from allies or other reliable sources.20 As a result, the fact that some or all 

of the imports causing the harm are from reliable sources does not compel a finding 

that those imports do not threaten to impair national security.21 

After careful examination of the facts in this investigation, the Secretary has 

concluded that excessive imports of steel in the present circumstances do threaten to 

impair national security under Section 232. Several important factors – the broader 

scope of the investigation,22 the level of global excess capacity, the level of imports, 

the reduction in basic oxygen furnace facilities since 2001, and the potential impact 

of further plant closures on capacity needed in a national emergency – support a 

recommendation different from the one adopted in the 2001 Report. 

20	 When ongress adopted Section 232(d) in 1962 the immediately preceding section was Section 231, 19 U/S// §

1861, which required the President, as soon as practicable, to suspend most-favored-nation tariff treatment for 

imports from communist countries/ Given the bipolar nature of the world at the time, the absence of a

distinction between communist and non-communist countries in Section 232 suggests that ongress expected 

Section 232 would be applied to imports from all countries—including allies and other ͞reliable͟ sources/

21	 To the extent that the 2001 Report or other prior Department reports under Section 232 can be read to

conclude that imports from reliable sources cannot impair the national security when the Secretary finds those

imports are causing ͞substantial unemployment, decrease in revenues of government, loss of skills or 

investment, or other serious effects resulting from the displacement of any domestic products by excessive

imports͟, the Secretary expressly rejects such a reading/ 

22	 This investigation examines the import of a broad range of steel products – flat, long, pipe and tube, semifinished, and stainless – whereas the 2001 Report addressed only semi-finished steel products and iron ore, 

which is not part of this investigation/ !s the 2001 Report noted, at the time semi-finished imports accounted 

for ͞a small percentage (approximately 7 percent) of total U/S/ semi-finished steel consumption/͟ 2001 Report 

at 31/ The 2001 Report also stated that ͞whether imports have harmed or threaten to harm U/S/ producers writ 

large is beyond the scope of the Department͛s inquiry, and need not be resolved here/͟ Id. at 37/ This 

investigation is focused on the larger inquiry that the 2001 Report expressly did not reach/

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III. INVESTIGATION PROCESS 

A. Initiation of Investigation 

On April 19, 2017, U.S. Secretary of Commerce Wilbur Ross initiated an 

investigation to determine the effect of imported steel on national security under 

Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. § 1862). 

Pursuant to Section 232(b)(1)(B), the Department notified the U.S. 

Department of Defense with an April 19, 2017 letter from Secretary Ross to 

Secretary James Mattis.23 

On April 20, 2017, President Donald Trump signed a Presidential 

Memorandum directing Secretary Ross to proceed expeditiously in conducting his 

investigation and submit a report on his findings to the President.24 

On April 21, 2017, the Department published in the Federal Register a notice 

about the initiation of this investigation to determine the effect of imports of steel on 

the national security. The notice also announced the opening of the public comment 

period as well as a public hearing to be held on May 24, 2017.25 

B. Public Hearing 

The Department held a public hearing to elicit further information concerning 

this investigation in Washington, DC, on May 24, 2017. The Department heard 

testimony from 37 witnesses at the hearing. A full list of witnesses and copies of 

their testimony are included in Appendices E and F. 

C. Public Comments 

On April 21, 2017, the Department invited interested parties to submit written 

comments, opinions, data, information, or advice relevant to the criteria listed in 

23	 19 U/S// § 1862(b)(1)()/ See !ppendix !. Section 232 Investigation Notification Letter to Secretary of Defense

James Mattis (!pril 19, 2017) - Department of Defense Response to Notification (May 8, 2017)

24	 See !ppendix . Presidential Memorandum for the Secretary of ommerce - Steel Imports and Threatsto National 

Security (!pril 20, 2017)

25	 See !ppendices  and D for Federal Register Notice Federal Register, Vol/ 82, No/ 79, 19205-19207 and See Federal

Register, Vol/ 82, No/ 98, 23529-23530/

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Section 705.4 of the National Security Industrial Base Regulations (15 C.F.R. § 

705.4) as they affect the requirements of national security, including the following: 

(a) Quantity of the articles subject to the investigation and other circumstances 

related to the importation of such articles; (b) Domestic production capacity needed 

for these articles to meet projected national defense requirements; (c) The capacity 

of domestic industries to meet projected national defense requirements; (d) Existing 

and anticipated availability of human resources, products, raw materials, production 

equipment, facilities, and other supplies and services essential to the national 

defense; (e) Growth requirements of domestic industries needed to meet national 

defense requirements and the supplies and services including the investment, 

exploration and development necessary to assure such growth; (f) The impact of 

foreign competition on the economic welfare of any domestic industry essential to 

our national security; (g) The displacement of any domestic products causing 

substantial unemployment, decrease in the revenues of government, loss of 

investment or specialized skills and productive capacity, or other serious effects; (h) 

Relevant factors that are causing or will cause a weakening of our national economy; 

and (i) Any other relevant factors. See Federal Register, Vol. 82, No. 79, 19205-

19207. 

The public comment period ended on May 31, 2017. The Department 

received 201 written public comment submissions concerning this investigation. All 

public comments were carefully reviewed and factored into the investigation 

process. For a listing of all public comments, see Appendix G. 

D. Interagency Consultation 

In addition to the required notification provided by the April 19, 2017 letter 

from Secretary Ross to Secretary Mattis, Department staff carried out the 

consultations required under Section 232(b)(2).26 Staff consulted with their 

counterparts in the Department of Defense regarding any methodological and policy 

questions that arose during the investigation. Discussions were held with the U.S. 

Army Materiel Command, the Defense Logistics Agency, the U.S. Navy/Naval Air 

26 19 U/S// § 1862(b)(2)

19
 

 

 

 

 

Systems Command, and the Under Secretary of Defense for Acquisitions & 

Logistics, Manufacturing and Industrial Base Policy. 

Discussions were also held with “appropriate officers of the United States,” 

including the Department of State, Department of the Treasury, Department of the 

Interior/U.S. Geological Survey, the Department of Homeland Security/U.S. 

Customs and Border Protection, the International Trade Commission, and the Office 

of the United States Trade Representative. 

27 

27 Id. 

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IV. PRODUCT SCOPE OF THE INVESTIGATION28, 29 

For this report, the product scope covers steel mill products (“steel”) which 

are defined at the Harmonized System (“HS”) 6-digit level as: 720610 through 

721650, 721699 through 730110, 730210, 730240 through 730290, and 730410 

through 730690, including any subsequent revisions to these HS codes. The 

following discontinued HS codes have been included for purposes of reporting 

historical data (prior to 2007): 722520, 722693, 722694, 722910, 730410, 730421, 

730610, 730620, and 730660. 

These steel products are all produced by U.S. steel companies and support 

various applications across the defense, critical infrastructure, and commercial 

sectors. Generally, these products fall into one of the following five product 

categories (including but not limited to): 

(1) Carbon and Alloy Flat Product (Flat Products): Produced by rolling semifinished steel through varying sets of rolls. Includes sheets, strips, and plates. 

Flat products are covered under the following 6-digit HS codes: 720810, 

720825, 720826, 720827, 720836, 720837, 720838, 720839, 720840, 

720851, 720852, 720853, 720854, 720890, 720915, 720916, 720917, 

720918, 720925, 720926, 720927, 720928, 720990, 721011, 721012, 

721020, 721030, 721041, 721049, 721050, 721061, 721069, 721070, 

721090, 721113, 721114, 721119, 721123, 721129, 721190, 721210, 

721220, 721230, 721240, 721250, 721260, 722511, 722519, 722530, 

722540, 722550, 722591, 722592, 722599, 722611, 722619, 722691, 

722692, 722693, 722694, 722699 

(2) Carbon and Alloy Long Products (Long Products): Steel products that fall 

outside the flat products category. Includes bars, rails, rods, and beams. 

Long products are covered under the following 6-digit HS codes: 721310, 

721320, 721391, 721399, 721410, 721420, 721430, 721491, 721499, 

28 The scope includes steel products/

29 Note that import data for steel products includes what are believed to be very small amounts of iron as 

well as steel, both of which are included in the HS codes covered in the scope/ 

21
 

 

 

 

 

 

 

 

 

721510, 721550,721590, 721610, 721621, 721622, 721631, 721632, 

721633, 721640, 721650, 721699, 721710, 721720, 721730, 721790, 

722520, 722620,722710, 722720, 722790, 722810, 722820, 722830, 

722840, 722850, 722860, 722870, 722880, 722910,722920, 722990, 

730110, 730210, 730240, 730290
 

(3) Carbon and Alloy Pipe and Tube Products (Pipe and Tube Products): Either 

seamless or welded pipe and tube products. Some of these products may 

include stainless as well as alloy other than stainless. 

Pipe and Tube products are covered under the following 6-digit HS codes: 

730410, 730419, 730421, 730423, 730429, 730431, 730439, 730451,
 

730459, 730490, 730511, 730512, 730519, 730520, 730531, 730539,
 

730590, 730610, 730619, 730620, 730629, 730630, 730650, 730660,
 

730661, 730669, 730690
 

(4) Carbon and Alloy Semi-finished Products (Semi-finished Products): The 

initial, intermediate solid forms of molten steel, to be re-heated and further 

forged, rolled, shaped, or otherwise worked into finished steel products. 

Includes blooms, billets, slabs, ingots, and steel for castings. 

Semi-finished products are covered under the following 6-digit HS codes: 

720610, 720690, 720711, 720712, 720719, 720720, 722410, 722490 

(5) Stainless Products: Steel products, in flat-rolled, long, pipe and tube, and 

semi-finished forms, containing at minimum 10.5 percent chromium and, by 

weight, 1.2 percent or less of carbon, offering better corrosion resistance than 

other steel. 

Stainless steel products are covered under the following 6-digit HS codes: 

721810, 721891, 721899, 721911, 721912, 721913, 721914, 721921, 

721922, 721923, 721924, 721931, 721932, 721933, 721934, 721935, 

721990, 722011, 722012, 722020, 722090, 722100, 722211, 722219, 

722220, 722230, 722240, 722300, 730411, 730422, 730424, 730441, 

730449, 730611, 730621, 730640 

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V. FINDINGS 

A. Steel is Important to U.S. National Security 

As discussed in Part II, “national security” under Section 232 includes both 

(1) national defense, and (2) critical infrastructure needs. 

1. Steel is Needed for National Defense Requirements 

Steel articles are critical to the nation’s overall defense objectives.30 The U.S. 

Department of Defense (DoD) has a large and ongoing need for a range of steel 

products that are used in fabricating weapons and related systems for the nation’s 

defense.31 DoD requirements – which currently require about three percent of U.S. 

steel production – are met by steel companies that also support the requirements for 

critical infrastructure and commercial industries. 

The free market system in the United States requires commercially viable steel 

producers to meet defense needs. No company could afford to construct and operate 

a modern steel mill solely to supply defense needs because those needs are too 

diverse. In order to supply those diverse national defense needs, U.S. steel mills 

must attract sufficient commercial (i.e., non-defense) business. The commercial 

revenue supports construction, operation, and maintenance of production capacity 

as well as the upgrades, research and development required to continue to supply 

defense needs in the future. See Appendix H for examples. 

2. Steel is Required for U.S. Critical Infrastructure 

Steel also is needed to satisfy requirements for “those industries that the U.S. 

Government has determined are critical to minimum operations of the economy and 

government.”32 In the 2001 Report the Department identified 28 “critical 

industries.”33 The Critical Infrastructure Assurance Office that identified the 

30	 !ccord, 2001 Report at 1, 12/

31	 !ISI 2017 public policy agenda, available from http.//www/steel/org/~/media/Files/!ISI/Reports/!ISI-2017-

Public-Policy-!genda/pdf?la=en

32	 2001 Report at 14/ See also, 2001 Report at 16, Table 2, for a listing of the 28 critical industries.

33	 Id. 

23
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“critical industries” is no longer in existence, so for this investigation the Department 

instead relied on the industries identified by the U.S. Government in the 2013 

Presidential Policy Directive 21 (PPD-21). 

34 The Secretary believes that the range 

of industries identified in PPD-21 is comparable to the range of critical industries 

analyzed in the 2001 Report. 

Pursuant to PPD-21, there are 16 designated critical infrastructure sectors in 

the United States, many of which use high volumes of steel (see Appendix I).35 The 

16 sectors include chemical production, communications, dams, energy, food 

production, nuclear reactors, transportation systems, water, and waste water systems. 

Increased quantities of steel will be needed for various critical infrastructure 

applications in the coming years. The American Society of Civil Engineers 

estimates that the United States needs to invest $4.5 trillion in infrastructure by 2025, 

and a substantial portion of these projects require steel content.36 

3.	 Domestic Steel Production is Essential for National Security 

Applications 

Domestic steel production is essential for national security. Congress, in 

Section 232(d), directed the Secretary of Commerce and the President to consider 

domestic production and the economic welfare of the United States in determining 

whether imports threaten to impair national security. 

In the case of steel, the history of U.S. Government actions to ensure the 

continued viability of the U.S. steel industry demonstrates that, across decades and 

Administrations, there has been consensus that domestic steel production is vital to 

national security. 

34	 PPD-21 can be viewed at https.//obamawhitehouse/archives/gov/the-press-office/2013/02/12/presidentialpolicy-directive-critical-infrastructure-security-and-resil

35	 Department of Homeland Security, ͞ritical Infrastructure Sectors,͟ https.//www/dhs/gov/critical-infrastructuresectors#

36	 2017 Infrastructure Report ard, !merican Society of ivil Engineers,

https.//www/infrastructurereportcard/org/wp-content/uploads/2016/10/2017-Infrastructure-Report-ard/pdf

24
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior significant actions under various statutory authorities to address steel 

imports using quotas or tariffs were taken by President George W. Bush, President 

William J. Clinton (three times), President George H. W. Bush, President Ronald W. 

Reagan (three times), President James E. Carter (twice), and President Richard M. 

Nixon, all at lower levels of import penetration than at present. In the 1970s, action 

was taken to limit import penetration to approximately 19 percent. In the 1980s, 

import penetration had reached 21 percent and the U.S. Government enacted 

correcting measures. In the 1990s and 2000s import penetration again reached up to 

23 percent, which prompted the U.S. Government to take additional actions.37 In 

2016, import penetration averaged 30 percent and for the first nine months of 2017 

imports have consistently averaged over 30 percent of U.S. domestic demand. 

4. Domestic Steel Production Depends on a Healthy and Competitive 

U.S. Industry 

U.S. steel producers would be unable to survive purely on defense or critical 

infrastructure steel needs. In the steel industry, it is commercial and industrial 

customer sales that generate the relatively steady production needed for 

manufacturing efficiency, and the revenue volume needed to sustain the business. 

Sales for critical infrastructure and defense applications are often less predictable, 

cyclical, and limited in volume. 

Steel manufacturers operating in the United States, however, have seen their 

commercial and industrial business steadily eroded by a growing influx of lowerpriced imported product from countries where steel manufacturing often is 

subsidized, directly or indirectly. The Department of Commerce currently has 164 

antidumping and countervailing duty determinations in effect, and has 20 additional 

cases under investigation, to address specific cases. See Appendix K. 

5. Steel Consumed in Critical Industries 

In this investigation, the issue before the Department is whether steel imports 

“threaten to impair” national security. See 19 U.S.C. § 1862. As discussed in Part 

II, the Secretary has determined that in the present case the relevant factors are the 

37 See !ppendix J for additional detail on U/S/ Government actions on steel in the past/

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“serious effects resulting from the displacement of ... domestic [steel] products by 

excessive imports” and the “impact of foreign competition on the economic welfare 

of individual domestic [steel] industries” that, when combined with the circumstance 

of massive global excess capacity, causes a “weakening of our internal economy” 

that “may impair the national security.”38 

In a free market system, the ability of the domestic steel industry to continue 

meeting national security needs depends on the continued capability of the U.S. steel 

industry to compete fairly in the commercial marketplace and maintain a financially 

viable domestic manufacturing capability. This includes the need to have an 

adequately skilled workforce for manufacturing as well as to conduct research and 

development for future products.39 A continued loss of viable commercial 

production capabilities and related skilled workforce will jeopardize the U.S. steel 

industry’s ability to meet the full spectrum of national security requirements. 

The Department in 2001 determined that the “critical industries” sector, which 

is analogous to the more robust critical infrastructure sectors identified pursuant to 

PPD-21, would require “no more than 33.68 million tons of finished steel per year,”40 

based on 30.88 percent of domestic consumption being used in industries related to 

critical infrastructure. The Department has now updated the “critical industries” 

calculation from the 2001 Report41 using Census Bureau steel usage figures from 

2007, which are the latest available. See Appendix I for more detailed information 

on steel needs for critical infrastructure. 

38	 19 U/S// § 1862(d)/

39	 See 50 U/S// § 4502(a)(͞ongress finds that – 0 (7) much of the industrial capacity that is relied upon by the

United States Government for military production and other national defense purposes is deeply and directly

influenced by – (!) the overall competitiveness of the industrial economy of the United States- and the ability of

industries in the United States, in general, to produce internationally competitive products and operate

profitably while maintaining adequate research and development to preserve competitiveness with respect to

military and civilian production0͟)/

40	 2001 Report at 14/ The report is not clear whether it is referring to short tons or metric tons/ While not crucial

to the analysis, if the figure is in short tons then the equivalent amount in metric tons would be 30/56 million

metric tons/

41	 2001 Report at 16 (Table 2)/

26
	
 

 

 

 

 

 

 

 

 

 

 

 

 

The updated analysis in Appendix I shows that 49.1 percent of domestic steel 

consumption in 2007 was used in critical industries. Domestic production in 2007 

was 110 million metric tons. The 49.1 percent of domestic consumption used in 

critical industries equals 54 million metric tons, compared to 30.56 million metric 

tons (or 33.68 million short tons) used in critical industries in 1997. Thus in 10 years 

the demand for steel in critical industries increased by 63 percent. 

B. Imports in Such Quantities as are Presently Found Adversely Impact the 

Economic Welfare of the U.S. Steel Industry 

In the steel sector, foreign competition is characterized by substantial and 

sustained global overcapacity and production in excess of foreign domestic demand. 

1. Imports of Steel Products Continue to Increase 

The United States is the world’s largest steel importer. The top 20 sources of 

U.S. imports of steel products accounted for approximately 91 percent of the roughly 

36 million metric tons of steel the United States is expected to import in 2017 (see 

Figure 2). 

Total U.S. imports rose from 25.9 million metric tons in 2011, peaking at 40.2 

million metric tons in 2014 at the height of the shale hydrocarbon drilling boom. For 

2017 (first ten months) imports are increasing at a double-digit rate over 2016, 

pushing finished steel imports consistently over 30 percent of U.S. consumption. 

27
	
 

-

 

 

 

 

 

Figure 2. Top U.S. Imports of All Steel Products 

Imports for Domestic Consumption, Quantity In Metric Tons, Ranked By 2017 

2017 

Rank Country 2011 2017 (Annualized) 

% Change 2011 

2017 (Annualized) 

World 25,994,621 35,927,141 38% 

1 Canada 5,539,448 5,800,008 5% 

2 Brazil 2,820,927 4,678,530 66% 

3 South Korea 2,572,981 3,653,934 42% 

4 Mexico 2,625,104 3,249,292 24% 

5 Russia 1,269,717 3,123,691 146% 

6 Turkey 665,303 2,249,456 238% 

7 Japan 1,824,393 1,781,147 -2% 

8 Germany 978,230 1,370,669 40% 

9 Taiwan 588,036 1,251,767 113% 

10 India 735,802 854,026 16% 

11 China 1,132,292 784,393 -31% 

12 Vietnam 120,134 727,643 506% 

13 Netherlands 517,773 589,930 14% 

14 Italy 276,809 515,459 86% 

15 Thailand 72,183 417,389 478% 

16 Spain 195,907 403,091 106% 

17 United Kingdom 400,244 354,389 -11% 

18 South Africa 123,001 350,425 185% 

19 Sweden 267,685 299,170 12% 

20 United Arab Emirates 63,316 290,221 358% 

Top 20 Total 22,789,285 32,744,630 44% 

Source: United States Department of Commerce, Bureau of the Census, Foreign Trade Division, IHS Global 

Trade Atlas Database: Revised Statistics for 2011 - 2017. 2017 data is annualized based on YTD 2017 

through October. 

As shown in Appendix K, antidumping and countervailing duty actions can 

address specific instances of unfairly traded steel products. However, given the large 

number of countries from which the United States imports steel and the myriad of 

different products involved, it could take years to identify and investigate every 

instance of unfairly traded steel, or attempts to transship or evade remedial duties. 

28
	
 

 

 

 

 

 

 

 

 

 

 

 

 

Moreover, U.S. industry has already spent hundreds of millions of dollars in 

recent years on AD/CVD cases, with seemingly no end in sight to their outlays. 

Smaller steel manufacturers are financially unable to afford these type of cases, or 

are hesitant to file cases in light of possible market entry retaliation in foreign 

markets for finished steel products.42 

2. High Import Penetration 

In contrast to the situation in the 2001 Report, where imports of semi-finished 

steel represented approximately 7 percent of domestic consumption, 

43 imports of 

finished steel products (i.e. not including semi-finished steel) currently represent 

over 25 percent of U.S. consumption (see Figure 3).44 If imports of semi-finished 

products are included, the import penetration level has been above 30 percent for the 

first ten months of 2017. Import penetration of steel pipe and tube was 74 percent 

in 2016 and further increased in 2017. 

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 

2016 

YTD 

2017 

Imp. Pen. 26.4 21.6 22.3 20.4 20.4 15.9 21.6 20.9 26.7 21.9 23.9 21.7 20.9 21.8 23.9 23.1 28.1 28.9 25.5 25.4 27.5 

0% 

5% 

10% 

15% 

20% 

25% 

30% 

35% 

Percentage 

Figure 3. U.S. Import Penetration of Finished Steel Products 

(Excludes Semi-Finished) 

Source: American Iron and Steel Institute. YTD data source is through October 2016 and October 2017. Excludes semi-finished imports. 

42 ongress has specifically expressed concern about the need to maintain small suppliers and the potential 

adverse impact on military readiness caused by the loss of small suppliers/ See 50 U/S// § 4502(a)(8)/

43 2001 Report at 31/

44 !ISI͛s statistical yearbook reports that about 8 percent of U/S/ shipments are made of imported substrate/

29
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3. High Import to Export Ratio 

U.S. imports of steel products, which displace demand for domestic steel and 

lower production at U.S. plants, reached nearly four times the level of exports of 

U.S. steel products in 2016 (see Figure 4). The expansion of steel production 

capacity outside of the United States in the last decade (Asia, the Middle East, and 

South America), much of it subsidized by national governments, continues to 

depress world steel prices while making it increasingly difficult for U.S. companies 

to export their steel products. While U.S. steel producers saw a mild increase in steel 

exports from 2005 to 2013, more recently sales to foreign customers have been 

declining. Exports fell to nine million metric tons in 2016 from a 20-year high of 12 

million metric tons annually from 2011 to 2013. Most U.S. steel exports are auto 

industry related and are sent to Canada (50 percent by weight in 2016) and Mexico 

(39 percent by weight in 2016). Flat products represent the majority of these exports 

– 57 percent of U.S. steel exports for Canada and 64 percent of steel exports for 

Mexico. 

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 

2016 

YTD 

2017 

Imports 38.1 32.7 34.8 27.7 29.9 21.1 32.6 29.3 41.3 30.3 29.2 14.7 21.8 26 30.5 29.3 40.3 35.4 30 25 29.9 

Exports 5.4 5.1 6.3 5.8 5.8 7.8 7.5 9.1 9.2 10.5 12.9 9 11.5 12.8 13.1 12.1 11.5 9.6 8.9 7.2 8.1 

0 

5 

10 

15 

20 

25 

30 

35 

40 

45 

Millions of Metric Tons 

Figure 4. U.S. Imports and Exports of Steel Mill Products 

Sources: IHS Markit Global Trade Atlas 

YTD through October 2016 & 2017. 

The same is true in the line pipe sector. The United States exports a minimal 

amount of line pipe. Exports of line pipe reached a recent peak of 525 thousand 

metric tons in 2013 before declining significantly. Exports totaled just 60 thousand 

metric tons in 2016, a decrease of 89 percent from 2013, and were less than one30
	
 

 

 

 

 

 

 

 

twentieth of the size of line pipe imports. Canada represents the largest destination 

for U.S. line pipe exports, with 39 percent of 2016 exports going to Canada, followed 

by Mexico with 13 percent. 

4. Steel Prices 

Hot-rolled coil prices are a benchmark price indicator for a common type of 

steel (see Figure 5). Hot rolled coil is considered a “benchmark” because it is a 

commodity product with a fairly common definition globally. 

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 

US HRC 674.27 597.22 962.51 538.89 680.56 822.62 701.84 696.20 727.78 505.65 575.68 684.11 

$0 

$200 

$400 

$600 

$800 

$1,000 

$1,200 

US Dollar 

Figure 5. Hot Rolled- USA Domestic Hot Rolled Coil (FOB Midwest Mill) $/mt 

Source: Platts (accessed from Bloomberg Financial) 2017 reflects the price through December (as of 

December 21, 2017. 

U.S. prices for hot-rolled steel coil have been higher than in other countries 

since 2010. U.S. domestic benchmark prices for this product class dipped 

especially low in 2015 at $505.65/metric ton before recovering in 2016 to 

$575.68/metric ton. In 2016, the price of freight-on-board stowed China port steel 

hot-rolled coil was 14 percent lower than U.S. domestic hot-rolled coil. In the case 

of ASEAN nations, import prices for hot-rolled coil were 33 percent lower and 

North Europe domestic hot-rolled coil was 21 percent lower. Each region saw a 

price decline in 2015 (see Figure 6). U.S. prices remained higher than other 

regions’ prices for this commodity level product throughout the period. Such 

higher prices are attributable to higher taxes, healthcare, environmental standards, 

31
	
 

 

 

 

 

 

and other regulatory expenses. Moreover, lower prices in steel producing regions 

backed by state-subsidized enterprises adds pressure on U.S. competitors to export 

their steel products to the U.S. Again in 2016, all categories of steel in all 

countries continued to experience pressure to lower prices compared to what could 

be charged in 2012. 

2012 2013 2014 2015 2016 2017*

 USA Domestic Hot Rolled Coil 701.84 696.20 727.78 505.65 575.68 684.11

 Steel Hot Rolled Coil (FOB Stowed 

China Port) 562.50 525.00 457.50 269.50 497.50 572.00

 Asean Import Hot Rolled Coil 605.66 570.43 519.89 336.55 386.81 534.75

 North Europe Domestic Hot Rolled Coil 659.54 614.41 568.41 420.19 455.29 604.90

 South Europe Domestic Steel Rebar 636.59 598.34 551.66 394.11 427.68 568.53 

0.00 

100.00 

200.00 

300.00 

400.00 

500.00 

600.00 

700.00 

800.00 

USD/MT 

Source: Bloomberg, Platts, Antaike. 2017 prices are through December 20, 2017. 

Figure 6. Regional Comparison of Hot Rolled Coil Bench Mark Prices (USD/MT) 

In 2015, steel prices fell globally. As the OECD noted, the combined effect 

of weakening global steel demand, including in the United States, growing exports 

in many economies, and decreases in steelmaking costs led to a very sharp decline 

32
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in steel prices in 2015. Notwithstanding these effects, prices for steel in the U.S. 

remained substantially higher than in any other area. However, relative to prices 

between 2010 and 2013, prices are still relatively depressed. 

Global excess steel production weakens the pricing power of U.S. steel 

producers. U.S. steel producers’ costs are higher than the costs for producers in other 

regions due to higher taxes, healthcare, environmental, and other regulatory 

expenses. Higher U.S. steel prices incentivize importing lower-cost foreign steel. 

Moreover, excess production and lower prices in regions proximate to state 

subsidized enterprises displace purchases from market based steel exporters and add 

pressure on those market based suppliers to export to the U.S. The effect of global 

excess steel production on U.S. steel prices and import levels is discussed in greater 

detail in Appendix L. 

5. Steel Mill Closures 

U.S. steel mill closures continue eroding overall U.S. steel mill capacity and 

employment. Many U.S. steel mills have been driven out of business due to 

declining steel prices, global overcapacity, and unfairly traded steel. Since 2000, the 

United States has lost over 25 percent of its basic oxygen furnace facilities with the 

closure of six facilities: RG Steel in Sparrows Point, Maryland; RG Steel in 

Steubenville, Ohio; RG Steel in Warren, Ohio; ArcelorMittal in East Chicago, 

Indiana; ArcelorMittal in Weirton, West Virginia; and U.S. Steel in Fairfield, 

Alabama. 

In addition, four electric arc furnace steel facilities have closed: Evraz in 

Claymont, Delaware; ArcelorMittal in Georgetown, South Carolina; Gerdau in Sand 

Springs, Oklahoma; and Republic Steel in Lorain, Ohio. Most recently, 

ArcelorMittal has announced the closure of its plate rolling mill in Conshohocken, 

Pennsylvania, because of sagging commercial sales attributed to surging imports of 

low-cost steel product and flat defense demand.45 

The closures of these facilities have had a significant impact on the U.S. 

industrial workforce and local economies. RG Steel suffered three closures: 

45 owden, M/ ͞!rcelor Mittal to Shut P! Plate Mill,͟ !merican Metal market, September 18, 2017/

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Sparrows Point, Maryland; Steubenville, Ohio; and Warren, Ohio. After filing for 

bankruptcy in 2012, more than 2,000 employees were displaced in Maryland alone 

and another 2,000 in the Midwest. The company cited weak demand in the steel 

industry as well as lack of financing as key contributors to the closure.46 

Closures of smaller steel mills have had equally devastating impacts on 

employment. Gerdau Sand Springs in Oklahoma lost 300 employees after closing 

in 2009 because of a long-term drop in demand for steel.47 Sand Springs was the 

last remaining steel plant in Oklahoma and had been in production since the 1920s. 

In 2013, at least 345 employees were laid off in response to the closure of the 

Claymont steel mill in Delaware. The Governor of Delaware, Jack Markell, 

attributed the financial difficulties of the facility to “subdued market demand and the 

high volume of imports.”48 

Similar difficulties were cited by the ArcelorMittal’s Georgetown, South 

Carolina facility and U.S. Steel’s location in Fairfield, Alabama, both of which 

closed in 2015. Layoffs for these two corporations totaled 226 and more than 1,100 

employees, respectively. Both companies attributed the layoffs to financial losses 

and ultimately, to facility closures due to the rise in competition from inexpensive 

imports.49 

Even temporary idling of steel plants threatens the U.S. steel industry as there 

are significant financial costs with re-opening a steel mill. Multiple U.S. facilities 

remain idled: there are four idled basic oxygen furnace facilities, two each in 

Kentucky and Illinois, representing almost one third of the remaining basic oxygen 

46	 usiness Journal, ͚͞Unforeseen onditions͛ loses Warren Steel Holdings,͟ January 12, 2016,

http.//businessjournaldaily/com/utilities-cut-to-warren-steel-holdings/- altimore rew, ͞Six reasons why the

Sparrows Point steel mill collapsed,͟ May 25, 2012, https.//baltimorebrew/com/2012/05/25/six-reasons-whythe-sparrows-point-steel-mill-collapsed//

47	 News on 6, ͞Sand Springs Steel Plant May lose,͟ June 9, 2009, http.//www/newson6/com/story/10500785/sandsprings-steel-plant-may-close/

48	 usiness Insider, ͞Shutdown of Russian Steel Mill in Delaware ould Send a Message !bout US Trade,͟ October 

17, 2013, http.//www/businessinsider/com/evraz-closes-claymont-steel-2013-10/

49	 !L/com, ͞U/S/ Steel lays off 200 more workers in Fairfield,͟ March 18, 2016, 

http.//www/al/com/business/index/ssf/2016/03/us_steel_lays_off_200_more_wor/html/

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furnace facilities in United States.50 In addition, there are idled pipe and tube mills 

in Texas, Ohio, and Alabama. Once production is halted at these facilities it is not 

always possible to bring back the highly skilled workforce needed to operate them. 

When steel mill restarts do occur, additional costs are often incurred for specialized 

worker training and production ramp-up. 

In addition, when a steel mill closes at a given location, the workers find other 

occupations, move to other steel mills, or remain indefinitely unemployed. After a 

significant period of unemployment, much of the specialized skill required by steel 

mill workers is forgotten. Furthermore, it is typically not easy to find and recruit 

displaced workers who may live hundreds or thousands of miles away. 

6. Declining Employment Trend Since 1998 

U.S. steel industry employment has declined 35 percent (216,400 in 1998 to 

139,800 in January 2016 - December 2016), including 14,100 lost jobs between 2015 

and 2016. While employment numbers increased slightly in certain years, the trend 

is dramatically downward (see Figure 7). Layoffs defer formal plant closings but 

are an indication of financial distress. Layoffs in the last two years have been 

particularly acute in steel producers with pipe and tubular facilities. In addition to 

layoffs, there are permanent closures and bankruptcies in the industry. 

51 

The loss of skilled workers is especially detrimental to the long-term health 

and competitiveness of the industry. The unstable and declining employment 

outlook for the industry also dissuades younger workers from wanting to participate 

in the future U.S. steel industry. The inability to rapidly add skilled workers to the 

industry negatively affects current manufacturing capabilities. This is especially 

problematic in the event of a major production surge or mobilization. 

50 See Figure 13/

51 See infra, section V()(1)/

35
	
 

 

 

 

 

 

 

 

 

 

 

 

 

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 

218.2 216.4 211.0 208.2 189.4 170.4 163.0 156.5 156.9 157.0 161.3 160.2 135.2 138.6 148.7 152.4 149.4 151.2 147.9 139.8 142.2 

0.0 

50.0 

100.0 

150.0 

200.0 

250.0

Annual Average of All Employees (Thousands) 

Source: Bureau of Labor Statistics, using the annual average of seasonally adjusted employees, NAICS Codes: 3311 and 3312, updated 11.22.2017 

Figure 7. Combined Steel Industry Employment (Yearly Average) 

7. Trade Actions – Antidumping and Countervailing Duties 

The number of U.S. antidumping and countervailing duty measures in effect 

illustrates the scope of the problem confronting the U.S. steel industry. In 1998, at 

the height of that periods steel crisis, there were just over 100 antidumping and 

countervailing duty cases against finished steel products.52 Today there are 164 

antidumping and countervailing duty orders in effect for steel, with another 20 steel 

investigations currently ongoing and another waiting to take effect through 

publication in the Federal Register (see Appendix K for a full listing of Steel 

Antidumping and Countervailing Duty Orders in Effect). This represents a 60 

percent increase in cases since the last time the Department investigated steel in 

2001. 

8. Loss of Domestic Opportunities to Bidders Using Imported Steel 

Despite efforts to level the playing field through AD/CVD orders, there are 

numerous examples of U.S. steel producers being unable to fairly compete with 

foreign suppliers, including the lack of ability to bid on some critical U.S. 

infrastructure projects. Due to unfair competition, particularly from foreign state52 Global Steel Trade. Structural Problems and Future Solutions- Department of ommerce- July, 2000/ 

36
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

owned enterprises, U.S. steel producers have lost out on U.S. business opportunities. 

Some examples include Chinese companies providing steel for the eastern span of 

the San Francisco-Oakland Bay Bridge as well as the Alexander Hamilton Bridge 

over the Harlem River in New York.53 

The Alliance for American Manufacturing’s statement before the 

Congressional Steel Caucus (March 2017) identified three other recent infrastructure 

projects in New York that have used or will use heavily subsidized or possibly 

dumped foreign steel: the Verrazano-Narrows Bridge, LaGuardia Airport, and the 

Holland Tunnel. Two major U.S. cities – Boston and Chicago – have contracted 

with Chinese companies to build new subway cars, primarily constructed with 

imported steel, for their respective transportation systems.54 

9. Financial Distress 

Rising levels of imports of steel continue to weaken the U.S. steel industry’s 

financial health. Years of running on low-profit margins or at a loss have weakened 

an industry that continues to face an ever-increasing wave of steel imports. The U.S. 

industry, as a whole, has operated on average with negative net income from 2009-

2016. Net income for U.S.-owned steel companies has averaged only $162 million 

annually since 2010, challenging the financial viability of this vital industry (see 

Figure 8). 

53 New York Times, ͞ridge omes to San Francisco With a Made-in-hina Label,͟ June 25, 2011,

http.//www/nytimes/com/2011/06/26/business/global/26bridge/html

54 Reuters, ͞hina͛s RR lands $1/3 billion hina rail car project,͟ March 10, 2016, 

http.//www/reuters/com/article/us-crrc-usa-idUSKN0W17I

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The Stern School of Business at New York University calculates that U.S. steel 

industry participants in the last five years experienced negative net income of 17.8 

percent. Compounded growth in revenue for the past five years in the steel industry 

has been a negative 7 percent.55 The loss of revenue has caused U.S. steel 

manufacturers, both large and small, to defer or eliminate production facility capital 

investments and funding for research and development. Even though there was a 

slight uptick in net income for the first quarter in 2017 over the fourth quarter of 

2016 margins remain poor compared to historic levels. 

Not only have earnings before interest, taxes, depreciation, and amortization 

(EBITDA) been shallow for steel producers in the United States, many of them are 

burdened with high levels of debt, as much as 11.9 times of earnings for one major 

producer (see Figure 9).56 While some companies are starting to pay down debt, 

55 Historical (ompounded !nnual) Growth Rates by Sector, !swath Damodaran, New York University Stern School 

of usiness, January 2017/ (see http.//pages/stern/nyu/edu/~adamodar/New_Home_Page/datafile /histgr/html)

56 Nucor operates mini-mills that use electric arc furnaces to produce high demand steel products primarily with

recycled steel scrap/ From a financial perspective, this business model allows Nucor to be highly price

competitive, but the company produces a narrower range of flat steel products than integrated steel mills/ The

mini-mills can weather bad economic times because they have lower energy costs and can regulate production 

38
	
 

 

 

 

 

 

 

 

others have not been able to do so primarily because of slack demand for 

domestically produced steel in the face of competition from imported products. 

Absent increases in steel production volume and pricing, one leading law firm 

specializing in insolvency, White & Case, observes that some steelmakers in the 

United States may soon have to renegotiate loan agreements to extend maturities; 

those that are not able to may have to consider Chapter 11 bankruptcy.57 

No capital intensive industry can survive with such poor margins over the 

longer term. The extensive leverage in the industry shown in Figure 9 adds to the 

more easily/ asic oxygen furnace plants have higher fixed operating costs because they directly convert iron ore

and other raw materials along with scrap into steel using more energy-intensive processes/ 

57	 Losing Strength. U/S/ Steel Industry !nalysis, Scott Griesman, White  ase, !pril 16, 2016 (see 

https.//www/whitecase/com/publications/article/losing-strength-us-steel-industry-analysis)/

39
	
 

 

 

 

 

 

 

 

 

 

 

 

likelihood of further closures if the present high level of imports continues to force 

U.S. steel mills to operate well below profitable capacity utilization rates. 

10. Capital Expenditures 

The ability of U.S. manufacturers of iron and steel products to fund capital 

expenditures for new production plants as well as facility modernization and 

advanced manufacturing equipment has been limited by falling revenue and reduced 

profits. As shown in Figure 10, annual capital expenditures for companies making 

iron and steel ingot, bars, rods, plate and other semi-finished products wavered from 

$5.7 billion to $5.1 billion for 2010-2012, before ramping to $7.1 billion in 2013. 

Figure 10. Annual Capital Expenditures 

Iron, Steel, and Ferroalloys 

Steel NAICS Codes 3311 and 3312 Combined Millions of Current Dollars 

Annual Capital Expenditures Survey 2010 2011 2012 2013 2014 2015 

A. Structures [New & Used Structures Combined] 1,026 1,322 1,564 1,157 724 580 

B. Equipment [New & Used Equipment Combined] 4,634 4,572 3,592 5,954 3,139 2,531 

C. Total Capital Expenditures 5,661 5,894 5,157 7,111 3,863 3,110 

D. (Unweighted) Payroll of Reporters / 

Total Payroll of Firms Classified in Industry group 86% 84% 80% 61% 86% 84% 

Source: U.S. Census Bureau, Annual Capital Expenditures Survey, www.census.gov/programs-surveys/aces.html 

Confronted with receding orders for products and declines in income in 2013, 

iron and steel companies operating production facilities in the United States started 

curtailing capital investments. Total capital spending dropped to $3.87 billion in 

2014 and slid further to $3.11 billion in 2015 – 32 percent below 2010 levels of $5.66 

billion. 

The decline in capital expenditures reflected similar drops in net sales, which 

plummeted from $129.6 billion in 2014 to $102 billion in 2015. Income after taxes 

40
	
 

 

 

 

 

 

 

for U.S. iron and steel manufacturers fell from $2.48 billion in the same two-year 

period to a massive loss of $3.5 billion in 2015. 

C. Displacement of Domestic Steel by Excessive Quantities of Imports has the 

Serious Effect of Weakening Our Internal Economy 

1. Domestic Steel Production Capacity is Stagnant and Concentrated 

According to the OECD, U.S. steel production capacity has remained stagnant 

at an average of approximately 114.3 million metric tons for more than a decade 

from 2006-2016 (see Figure 11). For 2016, the rated maximum capacity was 113 

million metric tons for existing basic oxygen furnace and electric arc furnace 

facilities. 

1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 

Capacity 102 116 112 102 109 110 113 115 113 113 115 115 117 118 114 114 111 113 112.8 

90 

95 

100 

105 

110 

115 

120 

Millions of Metric Tons 

Figure 11. U.S. Annual Steel Production Capacity 

Source: Organization for Economic Cooperation and Development (OECD), 2017 capacity is a forecast 

41
	
42
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The present situation with respect to basic oxygen furnace production is 

significantly worse than the situation assessed by the Department in the 2001 Report. 

As shown in Figure 13 below, the number of basic oxygen furnace facilities and units 

has declined precipitously since 1995. In 2000, there were 105 companies that 

produced raw steel at 144 locations,59 while today there are only 38 companies 

producing steel at 93 locations, a 64 percent and 36 percent reduction, respectively. 

Most importantly, in 2000 thirteen companies “operated integrated steel mills, 

with an average of 35 blast furnaces in continuous operation during the year”60 while 

today there are only three companies operating 13 basic oxygen furnaces. These are 

77 percent and 60 percent reductions, respectively. As a result, today only 26 percent 

of domestic steel is produced from raw materials in the United States, as compared 

to 53 percent in 2000. 

As noted earlier, since 2000 there has been over a 25 percent reduction in the 

number of basic oxygen furnaces operating in the United States, and 33 percent of 

the remaining basic oxygen furnaces are currently idled. In the Secretary’s view, a 

further reduction in basic oxygen furnace capacity, which is especially important to 

the ability of domestic industry to meet national security needs, is inevitable if the 

present imports continue or increase. 

This would be a serious “weakening of our internal 

economy” and place the United States in a position where it is unable to be certain
	

59 2001 Report at 21/

60 Id. 

43
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

it could meet demands for national defense and critical industries in a national 

61 emergency.

Figure 13. Basic Oxygen and Electric Arc Facilities and Units 

Located in the United States, 1975 - 2016 

Year asic Oxygen 

Furnace Facilities

asic Oxygen 

Furnace Units

Electric !rc 

Furnace Facilities

Electric !rc 

Furnace Units

1975 38 90 -- --

1980 33 78 -- --

1985 27 66 -- --

1990 24 61 127 246 

1995 22* 56* 116 218 

2000 19* 50* 122 174 

2005 17 46 115* 169* 

2010 16 44 108 164 

2015 13 31 98 154 

2016 13 31 98 154 

Source: U.S. Department of Commerce/BIS, American Iron and Steel Institute, Association for Iron & Steel Technology, Steel 

Manufacturers Association, August 2017. *Estimated. 

Basic Oxygen Furnace: Basic Oxygen Furnaces (BOF) are the dominant steelmaking technology globally, accounting for 74% of 

the world͛s total output of crude steel in 2016/ OF share of production in the U/S/ was 33% in 2016 and has been slowly 

declining, due primarily to the advent of the ͞Greenfield͟ electric arc furnace (E!F) flat-rolled mills. The primary raw materials 

for the BOF are liquid hot metal (iron) from the blast furnace and steel scrap. [1] These are charged into the BOF vessel. 

Oxygen (>99/5% pure) is ͞blown͟ into the OF at supersonic velocities/ It oxidizes the carbon and silicon contained in the hot 

metal, liberating great quantities of heat, which melts the scrap. Source: Steel.org. 

Electric Arc Furnace: The Electric Arc Furnace (EAF) operates as a batch melting process, producing batches of molten steel 

known ͞heats͟/ The E!F process uses steel scrap and iron units, melting them using electricity to make new steel/ E!F output 

accounted for 66% of U.S. steel production in 2016. Source: Steel.org. 

[1\ The last Furnace chemically reduces and physically converts iron oxides into liquid iron called ͞hot metal͟/ The blast

furnace is a huge steel stack lined with refractory brick, where iron ore, coke, and limestone are dumped into the top, and 

preheated air is blown into the bottom. The raw materials require six to eight hours to descend to the bottom of the furnace, 

where they become the final product of liquid slag and liquid iron. Source: Steel.org. 

In contrast to the situation in the United States, the leading global producers 

of steel (Brazil, South Korea, Japan, Russia, Germany, and especially China) 

primarily rely on basic oxygen furnace capacity rather than electric arc furnace 

capacity (see Figure 14). Each of these economic competitors to the United States 

possess critical research, development and production capabilities that the United 

61 See infra, sections 4 and 5, for a further discussion of the inability to meet surge requirements in an

emergency/

44
	
 

 

 

 

 

 

 

 

 ’ 

 

 

 

States is in danger of losing if imports continue to force U.S. steel producers to 

operate at uneconomic capacity utilization levels. 

A further reduction in domestic basic oxygen furnace capacity would put the 

United States at serious risk of becoming dependent on foreign steel to support its 

critical industries and defense needs. Allowing this decline to continue represents a 

“weakening of our internal economy that may impair national security” which the 

Congress has directed the Secretary to advise the President of under the Section 232. 

See 19 U.S.C. § 1862(d). 

Figure 14. The Top 20 Countries Exporting to the U.S. – BOF vs. EAF Capacity 

Rank

Top Import Sources

in 2016 in Tonnage

Terms

2015 OF

Share

2015 E!F 

Share

2015 Other

Share

!pprox. ountry s !verage

apacity Utilization in 2016

(OED)

World 74.20% 25.20% 0.50% 67% 

1 Canada 53.80% 46.20% 62% 

2 Brazil 78.20% 20.20% 57% 

3 South Korea 69.60% 30.40% 80% 

4 Mexico 29.70% 70.30% 75% 

5 Turkey 35.00% 65.00% 65% 

6 Japan 77.10% 22.90% 80% 

7 Russia 66.30% 30.50% 3.10% 76% 

8 Germany 70.40% 29.60% 72% (EU 28) 

9 Taiwan 62.30% 37.70% 75% 

10 Vietnam 25.00% 59.90% 15.20% 32% 

11 China 93.90% 6.10% 69% 

12 Netherlands 98.60% 1.50% 72% (EU 28) 

13 Italy 21.30% 78.20% 72% (EU 28) 

14 United Kingdom 83.00% 17.00% 72% (EU 28) 

15 France 65.60% 34.40% 72% (EU 28) 

16 India 42.90% 57.10% 75% 

17 Australia 77.60% 22.40% 63% 

18 Spain 31.70% 68.30% 72% (EU 28) 

19 Sweden 66.10% 33.90% 72% (EU 28) 

20 South Africa 56.50% 43.50% 58.5% 

Source. World Steel- Production Share Figures for 2015, US ensus ureau (!ccessed Via HIS) – Import Growth Rates, OED 2017 Q2 Market

!ssessment – !pproximate apacity Utilization

This is not a hypothetical situation. The Department of Defense already finds 

itself without domestic suppliers for some particular types of steel used in defense 

45 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

products, including tire rod steel used in military vehicles and trucks.62 While the 

United States has many allies that produce steel, relying on foreign owned facilities 

located outside the United States introduces significant risk and potential delay for 

the development of new steel technologies and production of needed steel products, 

particularly in times of emergency. The Secretary notes that the authority for the 

Department of Defense to place its order ahead of commercial orders on a mandatory 

basis does not extend to foreign-owned facilities outside the United States.63 

In the case of critical infrastructure, the United States is down to only one 

remaining producer of electrical steel in the United States (AK Steel – which is 

highly leveraged). Electrical steel is necessary for power distribution transformers 

for all types of energy – including solar, nuclear, wind, coal, and natural gas – across 

the country. If domestic electrical steel production, as well as transformer and 

generator production, is not maintained in the U.S., the U.S. will become entirely 

dependent on foreign producers to supply these critical materials and products.64 

Without an assured domestic supply of these products, the United States cannot be 

certain that it can effectively respond to large power disruptions affecting civilian 

populations, critical infrastructure, and U.S. defense industrial production 

capabilities in a timely manner. 

2. Production is Well Below Demand 

Demand for steel products in the United States (see Figure 15), increased from 

100.1 million metric tons in 2011 to 117.5 million metric tons in 2014, then declined 

to 99.8 million metric tons in 2016. Demand in 2017 is projected to rebound to 

107.7 million metric tons. During the 2011 to 2016 period, U.S. production of steel 

products dropped from 86.4 million metric tons in 2011 to 78.6 million metric tons 

in 2016, with a four percent increase expected in 2017. 

62	 Letter from Defense Logistics !gency, olumbus, OH to IS/OTE, !ugust 1, 2017/

63	 See Defense Priorities and !llocations System Program (DP!S), www/dcma/mil/DP!S

64	 United States ongress, ongressional Steel aucus/ Statement of Roger Newport, EO, !K Steel orporation

(on behalf of the !merican Iron and Steel Institute)/ March 29, 2017/ 

46
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the six-year period, U.S. domestic steel production supplied only 70 

percent of the average demand, even though available U.S. domestic steel production 

capacity during that period could have, on average, supplied up to 100 percent of 

demand (U.S. steel producers would be running at 92 percent capacity utilization for 

this period) with approximately 13 million metric tons of additional capacity 

remaining. 

Figure 15. U.S. Steel Market Snapshot (millions of metric tons)

2011 2012 2013 2014 2015 2016 2017

YTD

2017 

!nnualized 

Total Demand for Steel in U.S. 

(Production + Imports - Exports) 100.1 106.6 104.6 117.5 104.9 99.8 80.7 107.3 

U.S. Annual Capacity 116.5 118.0 113.5 113.5 111.3 113.3 --- ---

U.S. Annual Production (Liquid) 86.4 88.7 86.9 88.2 78.8 78.6 61.5 81.9 

Sources. United States Department of ommerce, ureau of the ensus/ !merican Iron and Steel Institute/ alculations

based on industry and trade data/

3.	 Utilization Rates are Well Below Economically Viable Levels 

Overall, steel mill production capacity utilization has declined from 87 percent 

in 1998, to 81.4 percent in 2008, to 69.4 percent in 2016 (see Figure 16). For the 

most recent six-year period (2011- 2016), the average utilization rate was 74 percent. 

Industry analysts note that utilization of 80 percent or more is typically 

necessary for sustained profitability, among other factors.65 For most capital and 

energy-intensive U.S. steel producers, capacity levels of 80 percent or higher are 

required to maintain facilities, carry out periodic modernization, service company 

debt, and fund research and development. 

65	 Market Realist, ͞Why steel investors are mindful of capacity utilization rates,͟ October 2, 2014, 

http.//marketrealist/com/2014/10/investors-mindful-capacity-utilization-rate// See also 

http.//marketrealist/com/2015/09/upstream-exposure-impact-steel-companies/

47
	
 

 

 

 

 

 

 

 

 

 

 

When steel factory utilization falls, costs per unit of steel product rises, 

reducing profit margins and product pricing flexibility. Higher capacity utilization 

usually results in lower per-unit product costs and higher overall profit.66 Over 80 

percent is a healthy capacity utilization rate and a rate at which most companies 

would be profitable. 

The U.S. steel industry uses 80 percent as a benchmark for minimum 

operational efficiency. Moreover, the steel industry is capable of reaching and 

sustaining 80 percent capacity utilization or higher. During the 2002-2008 period, 

U.S. steel companies operated at an average 87.4 percent level. 

67 

These industry assessments are consistent with a 1983 report on “Critical 

Materials Requirements in the U.S. Steel Industry” in which the Department 

66	 Houston hronical, ͞apacity Utilization and Effects on Product and Profit,͟

http.//smallbusiness/chron/com/capacity-utilization-effects-product-profit-67046/html- steel industry sources/

67	 http.//marketrealist/com/2015/09/upstream-exposure-impact-steel-companies/html (͞It͛s important to note

how changes in capacity utilization rates impact a company͛s earnings/ For example, we see a big jump in

earnings when utilization rates improve from 80 percent to 85 percent/ However, incremental benefits are

lower when utilization rates increase from 90 percent to 95 percent/͟)/

48
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

explained that “[c]apability utilization or capacity use, which in effect describes the 

efficiency of an industry's use of capital, is a prime determinant of profitability. 

Domestic steel producers were operating at about 55 percent capability for the first 

half of 1982. The comparable rate for the first half of 1981 was 85 percent. This 

current rate is probably well below a breakeven point for most producers, whereas 

1981 was profitable for nearly all producers.”68 

4.	 Declining Steel Production Facilities Limits Capacity Available for a 

National Emergency 

The number of steel production facilities located in the U.S. continues to 

decline. As shown earlier in Figure 13, from 1975 to 2016 the number of basic 

oxygen furnace facilities decreased from 38 to 13. Similarly, from 1990 to 2016, 

the number of electric arc furnace facilities decreased from 127 to 98. 

Due to this decline in facilities, domestic steel producers have a shrinking 

ability to meet national security production requirements in a national emergency. 

The U.S. Department of Commerce, Census Bureau regularly surveys plant capacity, 

and has found that steel producers are quickly shedding production capacity that 

could be used in a national emergency. The Census Bureau defines national 

emergency production as the “greatest level of production an establishment can 

expect to sustain for one year or more under national emergency conditions.”69 From 

2011 to 2017, steel producers increased the utilization of the surge capacity they 

would have during a national emergency from 54.2 percent to 68.2 percent (see 

Figure 17). As steel producers use more of this emergency capacity, there is an 

increasingly limited ability to ramp up steel production to meet national security 

needs during a national emergency. 

68 Department of ommerce, ͞ritical Materials Requirements in the U/S/ Steel Industry͟, March 1983, at 16-17/

69 U/S/ Dept/ of ommerce, ensus ureau, Survey of Plant apacity/ 2011-2017/

49
	
 

 

 

 

 

0 

10 

20 

30 

40 

50 

60 

70 

80 

2011 2012 2013 2014 2015 2016 2017 

Figure 17. Steel Industry Utilization of Emergency Capacity 

(2011-2017, Quarter 1) 

Source. U/S/ Department of ommerce, ensus ureau, Survey of Plant apacity

Percent

The ability to increase steel production during a national emergency 

continues to diminish as the number of steel production facilities continues to 

decline. If the U.S. requires a similar increase in steel production as it did during 

previous national emergencies, domestic steel production capacity may be 

insufficient to satisfy national security needs. If a national emergency were to 

occur at present utilization levels, domestic steel producers would be able to 

increase production by 146 percent. 

For comparison, from 1938 through 1946 the U.S. increased the production 

of pig iron and ferro-alloys by 217 percent and increased the production of steel 

ingots and castings by 210 percent to meet the demands of fighting a global war. 

70 

From 1960 through 1973, during the Vietnam era, the U.S. increased steel 

production by 152 percent. 

71 Should the U.S. once again experience a conflict on 

the scale of the Vietnam War, steel production capacity may be slightly insufficient 

70 U/S/ Dept/ of ommerce, ensus ureau/ Statistical !bstract of the United States, 1948/ Page 876/ 

71 U/S/ Dept/ of ommerce, ensus ureau/ Statistical !bstract of the United States, 1978/ Page 830/ 

50
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to meet national security needs. But if the U.S. were to experience a conflict 

requiring the production increase seen during the Second World War, the existing 

domestic steel production capacity would be unable to meet national security 

requirements. 

Increasing steel production capacity once a large-scale national emergency 

has arisen would take a significant amount of time. According to the American Iron 

and Steel Institute, the replacement of a basic oxygen furnace facility takes more 

than a year to complete. Therefore, the lack of spare domestic steel production 

capacity and the possible inability to sufficiently increase production during a 

national emergency may impair the national security of the United States. 

D. Global Excess Steel Capacity is a Circumstance that Contributes to the 

Weakening of the Domestic Economy 

1.	 Free markets globally are adversely affected by substantial chronic 

global excess steel production led by China 

Numerous studies, reports, and investigations have documented the global excess 

steel capacity, with China having the largest installed capability (see Figure 

18).72,73,74 OECD analyses show that the world’s nominal crude steelmaking capacity 

reached about 2.4 billion metric tons in 2016, an increase of 127 percent compared 

to the 2000 level. Most of the capacity expansion was planned for construction and 

manufacturing activities, and to help build the infrastructure necessary for economic 

development – most in non-OECD countries. Furthermore, the OECD reports that 

while steel capacity increased at a steady rate, world steel demand contracted sharply 

in the aftermath of the global economic and financial crisis of 2008. Global demand 

for steel recovered slowly in the years following 2008. However, since 2013, global 

steel demand has flattened thereby widening the capacity/demand gap. By 2015, the 

gap reached over 700 million metric tons. 

72	 run, L/ (2016)/ Overcapacity in Steel, China’s Role in a Global Problem. Washington, D. !lliance for !merican 

Manufacturing/ http.//aamweb/s3/amazonaws/com/uploads/resources/OvercapacityReport2016_R3/pdf

73	 Price, !/, Weld, /, El-Sabaawi, L/,  Teslik, !/ (2016)/ apacity Runs Riot/ Washington, D. Wiley Rein LLP/

74	 OED Reports/ (2016)/ http.//www/oecd/org/industry/ind/82nd-session-of-the-steel-committee/htm

51
	
 

 

 

 

 

 

 

 

 

The vast size of the capacity/demand gap means that steel demand alone 

cannot increase enough to balance the global overcapacity problem, which is 

particularly prevalent in China. Chinese excess capacity, estimated at more than 300 

million metric tons, dwarfs total U.S. production capacity (see Figure 19).75 

The effect of global overcapacity and excess steel production on U.S. steel 

prices and import levels is discussed in greater detail in Appendix L. While U.S. 

steel production capacity has remained flat since 2001, other steel producing nations 

have increased their production capacity, with China alone able to produce as much 

steel as the rest of the world combined. 

75 OED, ͞High Level Meeting. Excess apacity and Structural !djustment in the Steel Sector,͟ !pril 2016,

http.//www/oecd/org/sti/ind/ackground%20document%20No%202_FIN!L_Meeting/pdf

52
	
 

 

 

 

 

 

 

 

 

 

 

 

 

0 

500 

1000 

1500 

2000 

2500 

Millions of Metric Tons 

Figure 19. Steelmaking Capacity 

World Total China United States 

Source: OECD 

2009 2010 2011 2012 2013 2014 2015 2016 2017* 

Several countries (India, Iran, and Indonesia) in addition to China continue to 

add production capacity despite slack global demand. According to the OECD Steel 

Committee Chair’s statement from March 2017, “New data suggest that nearly 40 

million metric tons of gross capacity additions are currently underway and could 

come on stream during the three-year period of 2017-19, while an additional 53.6 

million metric tons of capacity additions are in the planning stages for possible startup during the same time period.”76 This additional global steel capacity coming 

online represents over 80 percent of existing U.S. steelmaking production capacity, 

demonstrating that the import challenge to U.S. industry is continuing to grow. 

2.	 Increasing global excess steel capacity will further weaken the internal 

economy as U.S. steel producers will face increasing import competition 

These additions to worldwide steelmaking capacity will only exacerbate the 

situation because they will further lower global operating utilization rates, including 

in the United States. Growth in foreign government-subsidized steel production is 

progressively weakening the financial health of the U.S. steel industry as other steel 

76	 OED, ͞82nd Session of the OED Steel ommittee – hair͛s Statement,͟ March 2017, 

http.//www/oecd/org/sti/ind/82-oecd-steel-chair-statement/htm

53
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

producing countries export more steel to the U.S. to in part to offset the loss of 

regional markets to Chinese steel (see Appendix L). 

The U.S. share of global production continues to steadily decline. In the year 

2000, when President Clinton signed into a law a statute granting China permanent 

normal trade relations status,77 the U.S. share of global steel production stood at 12 

percent.78 Since that point in time, the U.S. share of global steel production continued 

an inexorable decline as other countries, and especially China, began to increase 

production. The U.S. share of global steel production fell to 8 percent in 2005,79 5 

percent in 2009,80 and 4.8 percent in 2015.81 In contrast, China commanded a 49.7 

percent share of global steel production in 2015.82 

If even half of the planned additional global capacity identified by the OECD 

Steel Committee is built, and the related new production finds its way into the U.S., 

it will drive the operating rate of U.S. steel mills to less than 50 percent of capacity. 

This will cause a substantial and unsustainable negative cash situation that will 

ultimately result in multiple corporate bankruptcies due to heavy debt loads and 

related declines in steel production capacity and employment levels. 

77	 Public Law 106-286/ !n act to authorize extension of nondiscriminatory treatment (normal trade relations

treatment) to the Peoples Republic of hina, and to establish a framework for relations between the United

States and the Peoples Republic of hina/ October 10, 2000/ https.//www/gpo/gov/fdsys/pkg/PL!W106publ286

78	 U/S/ Dept/ of ommerce, ensus ureau/ Statistical !bstract of the United States, 2012/ Page 574/

79	 Id. 

80	 Id. 

81	 Steel Statistical Yearbook, 2016/ World Steel !ssociation/ https.//www/worldsteel/org/en/dam/jcr.37ad1117-

fefc-4df3-b84f-6295478ae460/Steel+Statistical+Yearbook+2016/pdf

82	 Steel Statistical Yearbook, 2017/ World Steel !ssociation/ https.//www/worldsteel/org/en/dam/jcr.3e275c73-

6f11-4e7f-a5d8-23d9bc5c508f/Steel+Statistical+Yearbook+2017/pdf

54
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VI. CONCLUSION 

The Secretary has determined that the displacement of domestic steel by 

excessive imports and the consequent adverse impact of those quantities of steel 

imports on the economic welfare of the domestic steel industry, along with the 

circumstance of global excess capacity in steel, are “weakening our internal 

economy” and therefore “threaten to impair” the national security as defined in 

Section 232. 

The continued rising levels of imports of foreign steel threaten to impair the 

national security by placing the U.S. steel industry at substantial risk of displacing 

the basic oxygen furnace and other steelmaking capacity, and the related supply 

chain needed to produce steel for critical infrastructure and national defense. 

In considering “the impact of foreign competition on the economic welfare of 

individual domestic [steel] industries” and other factors Congress expressly outlined 

in Section 232, the Secretary has determined that the continued decline and 

concentration in steel production capacity is “weakening of our internal economy 

and may impair national security.” See 19 U.S.C. § 1862(d). 

Global excess steel capacity is a circumstance that contributes to the 

“weakening of our internal economy” that “threaten[s] to impair” the national 

security as defined in Section 232. Free markets globally are adversely affected by 

substantial chronic global excess steel production led by China. While U.S. steel 

production capacity has remained flat since 2001, other steel producing nations have 

increased their production capacity, with China alone able to produce as much steel 

as the rest of the world combined. This overhang of excess capacity means that U.S. 

steel producers, for the foreseeable future, will face increasing competition from 

imported steel as other countries export more steel to the United States to bolster 

their own economic objectives. 

Since defense and critical infrastructure requirements alone are not sufficient 

to support a robust steel industry, U.S. steel producers must be financially viable and 

competitive in the commercial market to be available to produce the needed steel 

output in a timely and cost efficient manner. In fact, it is the ability to quickly shift 

55
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

production capacity used for commercial products to defense and critical 

infrastructure production that provides the United States a surge capability that is 

vital to national security, especially in an unexpected or extended conflict or national 

emergency. It is that capability which is now at serious risk; as imports continue to 

take business away from domestic producers, these producers are in danger of falling 

below minimum viable scale and are at risk of having to exit the market and 

substantially close down production capacity, often permanently. 

Steel producers in the United States are facing widespread harm from 

mounting imports. Growing global steel capacity, flat or declining world demand, 

the openness of the U.S. steel market, and the price differential between U.S. market 

prices and global market prices (often caused by foreign government steel 

intervention) ensures that the U.S. will remain an attractive market for foreign steel 

absent quotas or tariffs. Excessive imports of steel, now consistently above 30 

percent of domestic demand, have displaced domestic steel production, the related 

skilled workforce, and threaten the ability of this critical industry to maintain 

economic viability. 

A U.S. steel industry that is not financially viable to invest in the latest 

technologies, facilities, and long-term research and development, nor retain skilled 

workers while attracting a next-generation workforce, will be unable to meet the 

current and projected needs of the U.S. military and critical infrastructure sectors. 

Moreover, the market environment for U.S. steel producers has deteriorated 

dramatically since the 2001 Report, when the Department concluded that imports of 

iron ore and semi-finished steel do not “fundamentally threaten” the ability of U.S. 

industry to meet national security needs.83 

The Department’s investigation indicates that the domestic steel industry has 

declined to a point where further closures and consolidation of basic oxygen furnace 

facilities represents a “weakening of our internal economy” as defined in Section 

232. The more than 50 percent reduction in the number of basic oxygen furnace 

83 2001 Report at 28 – 37/ !s noted, supra note 16, the 2001 Report added the qualifier ͞fundamentally͟ which 

is not found in the statutory text/ The Secretary in this report uses the statutory standard of ͞threatens to

impair͟ without such qualification/

56
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

facilities – either through closures or idling of facilities due to import competition – 

increases the chance of further closures that place the United States at serious risk 

of being unable to increase production to the levels needed in past national 

emergencies. The displacement of domestic product by excessive imports is having 

the serious effect of causing the domestic industry to operate at unsustainable levels, 

reducing employment, diminishing research and development, inhibiting capital 

expenditures, and causing a loss of vital skills and know-how. The present capacity 

operating rates for those remaining plants continue to be below those needed for 

financial sustainability. These conditions have been further exacerbated by the 22 

percent surge in imports thus far in 2017 compared with 2016. Imports are now 

consistently above 30 percent of U.S. domestic demand. 

It is evident that the U.S. steel industry is being substantially impacted by the 

current levels of imported steel. The displacement of domestic steel by imports has 

the serious effect of placing the United States at risk of being unable meet national 

security requirements. The Secretary has determined that the “displacement of 

domestic [steel] products by excessive imports” of steel is having the “serious effect” 

of causing the “weakening of our internal economy.” See 19 U.S.C. § 1862(d). 

Therefore, the Secretary recommends that the President take corrective action 

pursuant to the authority granted by Section 232. See 19 U.S.C. § 1862(c). 

57
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VII. RECOMMENDATION 

Prior significant actions to address steel imports (quotas and/or tariffs) were 

taken under various statutory authorities by President George W. Bush, President 

William J. Clinton (three times), President George H. W. Bush, President Ronald W. 

Reagan (three times), President James E. Carter (twice), and President Richard M. 

Nixon, all at lower levels of import penetration than the present level, which is above 

30 percent. 

Due to the threat of steel imports to the national security, as defined in Section 

232, the Secretary recommends that the President take immediate action by adjusting 

the level of imports through quotas or tariffs on steel imported into the United States, 

as well as direct additional actions to keep the U.S. steel industry financially viable 

and able to meet U.S. national security needs. The quota or tariff imposed should be 

sufficient, after accounting for any exclusions, to enable the U.S. steel producers to 

be able to operate at about an 80 percent or better of the industry’s capacity 

utilization rate based on available capacity in 2017. 

In 2016, U.S. steel production was 78.6 million metric tons and U.S. capacity 

was 113.3 million metric tons, which represents a 69.4 percent capacity utilization 

rate. If current import trends for 2017 continue, continued imports without any 

action are projected to be 36.0 million metric tons, an increase over 2016 of 6.0 

million metric tons. Even with U.S. demand projected to increase to 107.3 from 

99.8 million metric tons, increased imports mean U.S. capacity utilization is forecast 

to rise only to 72.3 percent, a non-financially viable and unsustainable level of 

operation. 

By reducing import penetration rates to approximately 21 percent, U.S. 

industry would be able to operate at 80 percent of their capacity utilization. 

Achieving this level of capacity utilization based on the projected 2017 import levels 

will require reducing imports from 36 million metric tons to about 23 million metric 

tons. If a reduction in imports can be combined with an increase in domestic steel 

demand, as can be reasonably expected rising economic growth rates combined with 

the increased military spending and infrastructure proposals that the Trump 

Administration has planned, then U.S. steel mills can be expected to reach a capacity 

58
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

utilization level of 80 percent or greater. This increase in U.S. capacity utilization 

will enable U.S. steel mills to increase operations significantly in the short-term and 

improve the financial viability of the industry over the long-term. 

Recommendation to Ensure Sustainable Capacity Utilization and 

Financial Health 

Impose a Quota or Tariff on all steel products covered in this investigation 

imported into the United States to remove the threatened impairment to 

national security. The Secretary recommends adjusting the level of imports through 

a quota or tariff on steel imported into the United States. 

Alternative 1 – Global Quota or Tariff 

1A. Global Quota 

Impose quotas on all imported steel products at a specified percent of the 2017 

import level, applied on a country and steel product basis. 

According to the Global Trade Analysis Project (GTAP) Model, produced by 

Purdue University, a 63 percent quota would be expected to reduce steel imports by 

37 percent (13.3 million metric tons) from 2017 levels. Based on imports from 

January to October, import levels for 2017 are projected to reach 36.0 million metric 

tons. The quotas, adjusted as necessary, would result in imports equaling about 22.7 

million metric tons, which will enable an 80 percent capacity utilization rate at 2017 

demand levels (including exports). Application of an annual quota will reduce the 

impact of the surge in steel imports that has occurred since the beginning of 2017. 

1B. Global Tariff 

Apply a tariff rate on all imported steel products, in addition to any 

antidumping or countervailing duty collections applicable to any imported steel 

product. 

Similar to what is anticipated under a quota, according to the Global Trade 

Analysis Project (GTAP) Model, produced by Purdue University, a 24 percent tariff 

on all steel imports would be expected to reduce imports by 37 percent (i.e., a 

59
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

reduction of 13.3 million metric tons from 2017 levels of 36.0 million metric tons). 

84 

This tariff rate would thus result in imports equaling about 22.7 million metric tons, 

which will enable an 80 percent capacity utilization rate at 2017 demand levels 

(including exports).85 

Alternative 2 –Tariffs on a Subset of Countries 

Apply a tariff rate on all imported steel products from Brazil, South Korea, 

Russia, Turkey, India, Vietnam, China, Thailand, South Africa, Egypt, Malaysia and 

Costa Rica, in addition to any antidumping or countervailing duty collections 

applicable to any steel products from those countries. All other countries would be 

limited to 100 percent of their 2017 import level. 

According to the Global Trade Analysis Project (GTAP) Model, produced by 

Purdue University, a 53 percent tariff on all steel imports from this subset of 

countries would be expected to reduce imports by 13.3 million metric tons from 2017 

import levels from the targeted countries. This action would enable an increase in 

domestic production to achieve an 80 percent capacity utilization rate at 2017 

demand levels (including exports). The countries identified are projected to account 

for less than 4 percent of U.S. steel exports in 2017. 

Exemptions 

In selecting an alternative, the President could determine that specific 

countries should be exempted from the proposed 63 percent quota or 24 percent tariff 

by granting those specific countries 100 percent of their prior imports in 2017, based 

on an overriding economic or security interest of the United States. The Secretary 

recommends that any such determination should be made at the outset and a 

corresponding adjustment be made to the final quota or tariff imposed on the 

84 Due to general equilibrium effects, the overall import level would need to decrease by more than the

corresponding increase in domestic production to offset the negative effects of price or exchange rate changes

on export demand/

85 The elasticity factor is an estimate, not a certainty/ ! variation of 0/1 in the elasticity factor would change the

tonnage reduction by about 375,000 tons/ For example, imports would fall by an additional 375,000 tons under a 

demand elasticity of -1/7 instead of -1/6 and a 25 percent tariff/ 

60
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

remaining countries. This would ensure that overall imports of steel to the United 

States remain at or below the level needed to enable the domestic steel industry to 

operate as a whole at an 80 percent or greater capacity utilization rate. The limitation 

to 100 percent of each exempted country’s 2017 imports is necessary to prevent 

exempted countries from producing additional steel for export to the United States 

or encouraging other countries to seek to trans-ship steel to the United States through 

the exempted countries. 

It is possible to provide exemptions from either the quota or tariff and still 

meet the necessary objective of increasing U.S. steel capacity utilization to a 

financially viable target of 80 percent. However, to do so would require a reduction 

in the quota or increase in the tariff applied to the remaining countries to offset the 

effect of the exempted import tonnage. 

Exclusions 

The Secretary recommends an appeal process by which affected U.S. parties 

could seek an exclusion from the tariff or quota imposed. The Secretary would grant 

exclusions based on a demonstrated: (1) lack of sufficient U.S. production capacity 

of comparable products; or (2) specific national security based considerations. This 

appeal process would include a public comment period on each exclusion request, 

and in general, would be completed within 90 days of a completed application being 

filed with the Secretary. 

An exclusion may be granted for a period to be determined by the Secretary 

and may be terminated if the conditions that gave rise to the exclusion change. The 

U.S. Department of Commerce will lead the appeal process in coordination with the 

Department of Defense and other agencies as appropriate. Should exclusions be 

granted the Secretary would consider at the time whether the quota or tariff for the 

remaining products needs to be adjusted to increase U.S. steel capacity utilization to 

a financially viable target of 80 percent. 

61
	
THE EFFECT OF IMPORTS OF STEEL 

ON THE NATIONAL SECURITY 

U.S. Department of Commerce
 

Bureau of Industry and Security
 

Office of Technology Evaluation
 

APPENDICES
 

January 11, 2018
	
APPENDIX A - Page 1 
ACQUISITION,

TECHNOLOGY,

AND LOGISTICS

17-oSS 17>7

OFFICE OF THE UNDER SECRETARY OF DEFENSE

3000 DEFENSE PENTAGON

WASHINGTON, DC 20301-3000

MAY 082017

The Honorable Wilbur Ross

Secretary of Commerce

Washington, DC 20230

Dear Mr. Secretary:

I am writing to acknowledge receipt of your notification to initiate an investigation to

determine the effects of imports of steel on national security pursuant to section 232 of the Trade

Expansion Act of 1962, as amended.

The Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics

will assist your department in this endeavor. My point of contact is Robert Read, Director,

Industrial Assessments, Office of Manufacturing and Industrial Base Policy, at 571-571-6263 or

robert.m.read6.civ@mail.mil.

Sincerely,

V1

cc:

Mr. Brad Botwin

hn G. McGinn, Ph.D.

Acting Deputy Assistant Secretary Qf Defense

Manufacturing and Industrial Basegolicy tI? ,~ 

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APPENDIX A - Page 2 

~

~
 

 

 

 

APPENDIX B - Page 1 

FOR IMMEDIATE RELEASE 

Thursday, April 20, 2017 

Office of Public Affairs 

202-482-4883 

publicaffairs@doc.gov 

Today President Donald J. Trump signed a presidential memorandum calling on Secretary 

Wilbur Ross to prioritize a Department of Commerce investigation initiated last night into the 

effects of steel imports on US national security. The study will consider overcapacity, dumping, 

illegal subsidies, and other factors, to determine whether steel imports threaten American 

economic security and military preparedness. 

“We are going to fight for American workers and American-made steel by conducting a 

thorough investigation into steel imports,” said President Trump. “Thanks especially to Secretary 

Wilbur Ross for helping lead this critical effort.” 

After a thorough investigation, if any national security threats from steel imports are identified, 

Secretary Ross will provide a report that includes recommendations for next steps. Under Section 

232 of the Trade Expansion Act, the President has broad power to adjust imports—including 

through the use of tariffs—if excessive foreign imports are found to be a threat to US national 

security. 

“We will conduct this investigation thoroughly and expeditiously so that, if necessary, we can 

take actions to defend American national security, workers, and businesses against foreign 

threats,” said Secretary Ross. “This investigation will help determine whether steel import issues 

are making us less safe in a world that is increasingly fraught with geopolitical tensions.” 

The United States is relatively unusual in that it has no tariffs on steel but has had to impose 

antidumping or countervailing duties in over 150 cases, with 13 more currently pending. 

Our military often needs specialty steel alloys that require unusual production skills and are used 

for armor, vehicles, ships, aircraft, and infrastructure. As a result, a robust and healthy domestic 

steel production industry may be deemed necessary to guarantee military supply chains in the 

event of conflict. 

While these defense concerns continue to loom, the US steel industry has struggled in recent 

years. Industry employment has been declining, companies are highly leveraged, and businesses 

remain both capital intensive and lacking strong cash flow. Imports now represent 26% of the 

market and the US steel mills and foundries are operating at just 71% of capacity. 

The investigation will include a formal request for public comment to be published in the Federal 

Register, followed by a public hearing. 

Please visit www.commerce.gov/steel for more information on this investigation. 

1 
mstockstill on DSK30JT082PROD with NOTICES


19205 

APPENDIX C - Page 1 

Federal Register / Vol. 82, No. 79 / Wednesday, April 26, 2017 / Notices 

Agenda 

I. Introductions 

II. Committee Orientation 

III. Discussion on FY17 Civil Rights 

Project Ideas 

IV. Public Comment 

V. Next Steps 

VI. Adjournment 

Dated: April 21, 2017. 

David Mussatt, 

Supervisory Chief, Regional Programs Unit. 

[FR Doc. 2017–08447 Filed 4–25–17; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

Materials Technical Advisory 

Committee; Notice of Partially Closed 

Meeting 

The Materials Technical Advisory 

Committee will meet on May 11, 2017, 

10:00 a.m., Herbert C. Hoover Building, 

Room 3884, 14th Street between 

Constitution & Pennsylvania Avenues 

NW., Washington, DC. The Committee 

advises the Office of the Assistant 

Secretary for Export Administration 

with respect to technical questions that 

affect the level of export controls 

applicable to materials and related 

technology. 

Agenda 

Open Session 

1. Presentation: Twist Bioscience on 

Twist’s experience with export controls. 

2. Presentation: Export Enforcement 

Coordination Center (E2C2) and 

discussion on the FBI film ‘‘Made in 

America: Defending Our Technology.’’ 

3. A draft proposal to move a green 

technology report forward, engaging the 

Office of Technology and Evaluation 

and the Renewable Energy and Energy 

Efficiency Advisory Committee on the 

possibility of collaboration. 

4. Open session report by regime 

representatives. 

5. Report by working groups 

(composite, pumps and valves, bio, 

public domain, chemicals). 

6. Public Comments/New Business/ 

Closed session. 

Closed Session 

7. Discussion of matters determined to 

be exempt from the provisions relating 

to public meetings found in 5 U.S.C. 

app. 2 sections 10(a)(1) and 10(a)(3). 

The open session will be accessible 

via teleconference to 20 participants on 

a first come, first serve basis. To join the 

conference, submit inquiries to Ms. 

Yvette Springer at Yvette.Springer@ 

bis.doc.gov, no later than May 4, 2017. 

A limited number of seats will be 

available during the public session of 

the meeting. Reservations are not 

accepted. To the extent time permits, 

members of the public may present oral 

statements to the Committee. Written 

statements may be submitted at any 

time before or after the meeting. 

However, to facilitate distribution of 

public presentation materials to 

Committee members, the materials 

should be forwarded prior to the 

meeting to Ms. Springer via email. 

The Assistant Secretary for 

Administration, with the concurrence of 

the delegate of the General Counsel, 

formally determined on February 15, 

2017, pursuant to section 10(d) of the 

Federal Advisory Committee Act, as 

amended (5 U.S.C. app. 2 sec. 10(d)), 

that the portion of the meeting dealing 

with pre-decisional changes to the 

Commerce Control List and the U.S. 

export control policies shall be exempt 

from the provisions relating to public 

meetings found in 5 U.S.C. app. 2 

sections 10(a)(1) and 10(a)(3). The 

remaining portions of the meeting will 

be open to the public. 

For more information, call Yvette 

Springer at (202) 482–2813. 

Yvette Springer, 

Committee Liaison Officer. 

[FR Doc. 2017–08387 Filed 4–25–17; 8:45 am] 

BILLING CODE 3510–JT–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

Notice Request for Public Comments 

and Public Hearing on Section 232 

National Security Investigation of 

Imports of Steel 

AGENCY: Bureau of Industry and 

Security, Office of Technology 

Evaluation, U.S. Department of 

Commerce. 

ACTION: Notice of request for public 

comments and public hearing. 

SUMMARY: The Secretary of Commerce 

initiated an investigation to determine 

the effects on the national security of 

imports of steel. This investigation has 

been initiated under section 232 of the 

Trade Expansion Act of 1962, as 

amended. Interested parties are invited 

to submit written comments, data, 

analyses, or other information pertinent 

to the investigation to the Department of 

Commerce’s Bureau of Industry and 

Security. The Department of Commerce 

will also hold a public hearing on the 

investigation on May 24, 2017 in 

Washington, DC. This notice identifies 

the issues on which the Department is 

interested in obtaining the public’s 

views. It also sets forth the procedures 

for public participation in the hearing. 

DATES: Comments may be submitted at 

any time but must be received by May 

31, 2017. 

The hearing will be held on May 24, 

2017 at the U.S. Department of 

Commerce auditorium, 1401 

Constitution Avenue NW., Washington, 

DC 20230. The hearing will begin at 

10:00 a.m. local time and conclude at 

1:00 p.m. local time. 

ADDRESSES: 

Written comments: Send written 

comments to Brad Botwin, Director, 

Industrial Studies, Office of Technology 

Evaluation, Bureau of Industry and 

Security, U.S. Department of Commerce, 

1401 Constitution Avenue NW., Room 

1093, Washington, DC 20230 or by 

email to Steel232@bis.doc.gov. 

Public hearing: Send requests to speak 

and written summaries of the oral 

presentations to Brad Botwin, Director, 

Industrial Studies, Office of Technology 

Evaluation, Bureau of Industry and 

Security, U.S. Department of Commerce, 

Room 1093, 1401 Constitution Avenue 

NW., Washington, DC 20230 or by email 

to Steel232@bis.doc.gov, by May 17, 

2017. Any person, whether presenting 

or not, may submit a written statement 

through May 31, 2017—7 days after the 

hearing date. 

FOR FURTHER INFORMATION CONTACT: Brad 

Botwin, Director, Industrial Studies, 

Office of Technology Evaluation, Bureau 

of Industry and Security, U.S. 

Department of Commerce (202) 482– 

4060, brad.botwin@bis.doc.gov. For 

more information about the section 232 

program, including the regulations and 

the text of previous investigations, see 

www.bis.doc.gov/232. 

SUPPLEMENTARY INFORMATION: 

Background 

On April 19, 2017, the Secretary of 

Commerce (‘‘Secretary’’) initiated an 

investigation under section 232 of the 

Trade Expansion Act of 1962, as 

amended (19 U.S.C. 1862), to determine 

the effects on the national security of 

imports of steel. On April 20, 2017, the 

President signed a memorandum 

directing the Secretary to proceed 

expeditiously in conducting his 

investigation and submit a report on his 

findings to the President. The President 

further directed that if the Secretary 

finds that steel is being imported into 

the United States in such quantities or 

under such circumstances as to threaten 

to impair the national security, the 

Secretary shall recommend actions and 

steps that should be taken to adjust steel 
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APPENDIX C - Page 2 

Federal Register / Vol. 82, No. 79 / Wednesday, April 26, 2017 / Notices 

imports so that they will not threaten to 

impair the national security. 

Written Comments 

This investigation is being undertaken 

in accordance with part 705 of the 

National Security Industrial Base 

Regulations (15 CFR parts 700 to 709) 

(‘‘NSIBR’’). Interested parties are invited 

to submit written comments, data, 

analyses, or information pertinent to 

this investigation to the Office of 

Technology Evaluation, U.S. 

Department of Commerce (‘‘the 

Department’’), no later than May 31, 

2017. 

The Department is particularly 

interested in comments and information 

directed to the criteria listed in § 705.4 

of the NSIBR as they affect national 

security, including the following: (a) 

Quantity of steel or other circumstances 

related to the importation of steel; (b) 

Domestic production and productive 

capacity needed for steel to meet 

projected national defense 

requirements; (c) Existing and 

anticipated availability of human 

resources, products, raw materials, 

production equipment, and facilities to 

produce steel; (d) Growth requirements 

of the steel industry to meet national 

defense requirements and/or 

requirements to assure such growth; (e) 

The impact of foreign competition on 

the economic welfare of the steel 

industry; (f) The displacement of any 

domestic steel causing substantial 

unemployment, decrease in the 

revenues of government, loss of 

investment or specialized skills and 

productive capacity, or other serious 

effects; (g) The displacement of any 

domestic steel causing substantial 

unemployment, decrease in the 

revenues of government, loss of 

investment or specialized skills and 

productive capacity, or other serious 

effects; (h) Relevant factors that are 

causing or will cause a weakening of our 

national economy; and (i) Any other 

relevant factors. 

Material that is business confidential 

information will be exempted from 

public disclosure as provided for by 

§ 705.6 of the regulations. Anyone 

submitting business confidential 

information should clearly identify the 

business confidential portion of the 

submission, then file a statement 

justifying nondisclosure and referring to 

the specific legal authority claimed, and 

provide a non-confidential submission 

which can be placed in the public file. 

Communications from agencies of the 

United States Government will not be 

made available for public inspection. 

Please note that the submission of 

comments for presentation at the public 

hearing is separate from the request for 

written comments. 

The Bureau of Industry and Security 

does not maintain a separate public 

inspection facility. Requesters should 

first view the Bureau’s Web page, which 

can be found at https:// 

efoia.bis.doc.gov/ (see ‘‘Electronic 

FOIA’’ heading). If requesters cannot 

access the Web site, they may call 202– 

482–0795 for assistance. The records 

related to this assessment are made 

accessible in accordance with the 

regulations published in part 4 of title 

15 of the Code of Federal Regulations 

(15 CFR 4.1 et seq.). 

Public Hearing 

Consistent with the interest of the 

U.S. Department of Commerce in 

soliciting public comments on issues 

affecting U.S. industry and national 

security, the Department is holding a 

public hearing as part of the 

investigation. The hearing will assist the 

Department in determining whether 

imports of steel threaten to impair the 

national security and in recommending 

remedies if such a threat is found to 

exist. Public comments at the hearing 

should address the criteria listed in 

§ 705.4 of the NSIBR as they affect 

national security described above. 

The hearing will be held on May 24, 

2017 at the U.S. Department of 

Commerce auditorium, 1401 

Constitution Avenue NW., Washington, 

DC 20230. The hearing will begin at 

10:00 a.m. local time and conclude at 

1:00 p.m. local time. 

Procedure for Requesting Participation 

The Department encourages interested 

public participants to present their 

views orally at the hearing. Any person 

wishing to make an oral presentation at 

the hearing must submit a written 

request to the Department of Commerce 

at the address indicated in the 

ADDRESSES section of this notice. The 

request to participate in the hearing 

must be accompanied by a copy of a 

summary of the oral presentation. The 

written request and summary must be 

received by the Department no later 

than Wednesday, May 17, 2017. In 

addition, the request to speak should 

contain (1) the name and address of the 

person requesting to make a 

presentation; (2) a daytime phone 

number where the person who would be 

making the oral presentation may be 

contacted before the hearing; (3) the 

organization or company they represent; 

and (4) an email address. 

Please note that the submission of 

comments for presentation at the public 

hearing is separate from the request for 

written comments. Since it may be 

necessary to limit the number of persons 

making presentations, the written 

request to participate in the public 

hearing should describe the individual’s 

interest in the hearing and, where 

appropriate, explain why the individual 

is a proper representative of a group or 

class of persons that has such an 

interest. If all interested parties cannot 

be accommodated at the hearing, the 

summaries of the oral presentations will 

be used to allocate speaking time and to 

ensure that a full range of comments is 

heard. 

Each person selected to make a 

presentation will be notified by the 

Department of Commerce no later than 

8:00 p.m. Eastern Daylight Time on 

Friday, May 19, 2017. The Department 

will arrange the presentation times for 

the speakers. Persons selected to be 

heard are requested to bring 20 copies 

of their oral presentation and of all 

exhibits to the hearing site on the day 

of the hearing. All such material must 

be of a size consistent with ease of 

handling, transportation and filing. 

While large exhibits may be used during 

a hearing, copies of such exhibits in 

reduced size must be provided to the 

panel. Written submissions by persons 

not selected to make presentations will 

be made part of the public record of the 

proceeding. Any person, whether 

presenting or not, may submit a written 

statement through May 31, 2017—7 

days after the hearing date. Confidential 

business information may not be 

submitted at a public hearing. In the 

event confidential business information 

is submitted it will be handled 

according to the same procedures 

applicable to such information provided 

in the course of an investigation. See 15 

CFR 705.6. The hearing will be 

recorded. 

Copies of the requests to participate in 

the public hearing, and the transcript of 

the hearing will be maintained on the 

Bureau of Industry and Security’s Web 

page, which can be found at http:// 

www.bis.doc.gov (see Freedom of 

Information Act (FOIA) heading). If the 

requesters cannot access the Web site, 

they may call (202) 482–0795 for 

assistance. The records related to this 

assessment are made accessible in 

accordance with the regulations 

published in part 4 of title 15 of the 

Code of Federal Regulations (15 CFR 4.1 

et seq.). 

Conduct of the Hearing 

The Department reserves the right to 

select the persons to be heard at the 

hearing, to schedule their respective 

presentations, and to establish the 

procedures governing the conduct of the 

hearing. Each speaker will be limited to 
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APPENDIX C - Page 3 

Federal Register / Vol. 82, No. 79 / Wednesday, April 26, 2017 / Notices 

10 minutes, and comments must be 

directly related to the criteria listed in 

15 CFR 705.4 of the regulations. 

Attendees will be seated on a first-come, 

first-served basis. 

A Department official will be 

designated to preside at the hearing. The 

presiding officer shall determine all 

procedural matters during the hearing. 

Representatives from the Department, 

and other U.S. Government agencies as 

appropriate, will make up the hearing 

panel. This will be a fact-finding 

proceeding; it will not be a judicial or 

evidentiary-type hearing. Only members 

of the hearing panel may ask questions, 

and there will be no cross-examination 

of persons presenting statements. 

However, questions submitted to the 

presiding officer in writing may, at the 

discretion of the presiding officer, be 

posed to the presenter. No formal rules 

of evidence will apply to the hearing. 

Any further procedural rules for the 

proper conduct of the hearing will be 

announced by the presiding officer. 

Special Accommodations 

This meeting is physically accessible 

to people with disabilities. Requests for 

sign language interpretation or other 

auxiliary aids should be received by the 

Department of Commerce no later than 

Thursday, May 11, 2017 at the address 

indicated in the ADDRESSES section of 

this notice. 

Dated: April 21, 2017. 

Wilbur L. Ross, 

Secretary of Commerce. 

[FR Doc. 2017–08499 Filed 4–24–17; 11:15 am] 

BILLING CODE 3510–33–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–822–806, A–475–836, A–580–891, A–821– 

824, A–791–823, A–469–816, A–489–831, A– 

823–816, A–520–808, A–412–826] 

Carbon and Alloy Steel Wire Rod From 

Belarus, Italy, the Republic of Korea, 

the Russian Federation, South Africa, 

Spain, the Republic of Turkey, Ukraine, 

United Arab Emirates, and United 

Kingdom: Initiation of Less-Than-FairValue Investigations 

AGENCY: Enforcement and Compliance, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective April 17, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Rebecca Janz at (202) 482–2972 

(Belarus), Tom Bellhouse at (202) 482– 

0257 (Italy), David Crespo at (202) 482– 

3693 (Republic of Korea (Korea)), Terre 

Keaton at (202) 482–1280 (the Russian 

Federation (Russia)), Moses Song at 

(202) 482–5041 (South Africa), Chelsey 

Simonovich at (202) 482–1979 (Spain), 

Ryan Mullen at (202) 482–5260 (the 

Republic of Turkey (Turkey)), Julia 

Hancock at (202) 482–1394 (Ukraine), 

Carrie Bethea at (202) 482–1491 (the 

United Arab Emirates (UAE)), and Alice 

Maldonado at (202) 482–4682 (the 

United Kingdom), AD/CVD Operations, 

Enforcement and Compliance, U.S. 

Department of Commerce, 1401 

Constitution Avenue NW., Washington, 

DC 20230. 

SUPPLEMENTARY INFORMATION: 

The Petitions 

On March 28, 2017, the U.S. 

Department of Commerce (the 

Department) received antidumping duty 

(AD) petitions concerning imports of 

carbon and alloy steel wire rod (wire 

rod) from Belarus, Italy, Korea, Russia, 

South Africa, Spain, Turkey, Ukraine, 

the UAE, and the United Kingdom, filed 

in proper form on behalf of Charter 

Steel, Gerdau Ameristeel US Inc., 

Keystone Consolidated Industries, Inc., 

and Nucor Corporation (collectively, the 

petitioners).1 The AD petitions were 

accompanied by countervailing duty 

(CVD) petitions on imports from Italy 

and Turkey. The petitioners are 

domestic producers of wire rod.2 

On March 31, 2017, and April 6, 2017, 

the Department requested additional 

information and clarification of certain 

areas of the Petitions.3 The petitioners 

filed responses to these requests on 

April 4, 2017, and on April 7, 2017, 

respectively.4 On April 5, the 

petitioners filed a submission 

demonstrating that, for certain 

countries, the prices they obtained for 

normal value were below the 

production costs. As a result, they 

compared export price (EP) or 

constructed export price (CEP) to 

1 See Letter to the Secretary of Commerce from 

Petitioners ‘‘Carbon and Alloy Steel Wire Rod from 

Belarus, Italy, the Republic of Korea, the Russian 

Federation, South Africa, Spain, the Republic of 

Turkey, Ukraine, the United Arab Emirates, and 

United Kingdom—Petitions for the Imposition of 

Antidumping and Countervailing Duties’’ (March 

28, 2017) (the Petitions). 

2 See Volume I of the Petitions, at 2. 

3 See Country-specific letters to Petitioners from 

the Department concerning supplemental questions 

on each of the country-specific records (March 31, 

2017); and Memorandum to the File ‘‘Phone Call 

with Counsel to Petitioners’’ (April 10, 2017). 

4 See Country-specific amendments to the 

Petitions (first and second amendments for each 

country); see also Letter to the Secretary of 

Commerce from Petitioners ‘‘Carbon and Alloy 

Steel Wire Rod from Belarus, Italy, the Republic of 

Korea, the Russian Federation, South Africa, Spain, 

the Republic of Turkey, Ukraine, the United Arab 

Emirates, and United Kingdom—Petitioners’ 

Amendment to Volume I Relating to General 

Issues’’ April 4, 2017 (General Issues Supplement). 

normal value (NV) using constructed 

value (CV).5 

In accordance with section 732(b) of 

the Tariff Act of 1930, as amended (the 

Act), the petitioners allege that imports 

of wire rod from Belarus, Italy, Korea, 

Russia, South Africa, Spain, Turkey, 

Ukraine, the UAE, and the United 

Kingdom are being, or are likely to be, 

sold in the United States at less than fair 

value within the meaning of section 731 

of the Act, and that such imports are 

materially injuring, or threatening 

material injury to, an industry in the 

United States. Also, consistent with 

section 732(b)(1) of the Act, the 

Petitions are accompanied by 

information reasonably available to the 

petitioners supporting their allegations. 

The Department finds that the 

petitioners filed these Petitions on 

behalf of the domestic industry because 

the petitioners are interested parties as 

defined in section 771(9)(C) of the Act. 

The Department also finds that the 

petitioners demonstrated sufficient 

industry support with respect to the 

initiation of the AD investigations that 

the petitioners are requesting.6 

Periods of Investigation 

Because the Petitions were filed on 

March 28, 2017, the period of 

investigation (POI) for all investigations 

except Belarus is January 1, 2016, 

through December 31, 2016. Because 

Belarus is a non-market economy 

country, the POI for that investigation is 

July 1, 2016, through December 31, 

2016. 

Scope of the Investigations 

The product covered by these 

investigations is wire rod from Belarus, 

Italy, Korea, Russia, South Africa, 

Spain, Turkey, Ukraine, the UAE, and 

the United Kingdom. For a full 

description of the scope of these 

investigations, see the ‘‘Scope of the 

Investigations,’’ in Appendix I of this 

notice. 

Comments on Scope of the 

Investigations 

During our review of the Petitions, the 

Department issued questions to, and 

received responses from, the petitioners 

pertaining to the proposed scope to 

ensure that the scope language in the 

Petitions would be an accurate 

5 See Country-specific amendments to the 

Petitions from the petitioners, ‘‘Re: Carbon and 

Certain Alloy Steel Wire Rod from the Republic of 

Korea, the Russian Federation, South Africa, and 

Ukraine—Existance of Below-Cost Sales’’ (April 5, 

2017). 

6 See the ‘‘Determination of Industry Support for 

the Petitions’’ section below. 

sradovich on DSK3GMQ082PROD with NOTICES

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APPENDIX D - Page 1 

Federal Register / Vol. 82, No. 98 / Tuesday, May 23, 2017 / Notices 

Members of the public are also 

entitled to submit written comments; 

the comments must be received in the 

regional office within 30 days following 

the meeting. Written comments may be 

mailed to the Midwestern Regional 

Office, U.S. Commission on Civil Rights, 

55 W. Monroe St., Suite 410, Chicago, 

IL 60615. They may also be faxed to the 

Commission at (312) 353–8324, or 

emailed to Carolyn Allen at callen@ 

usccr.gov. Persons who desire 

additional information may contact the 

Midwestern Regional Office at (312) 

353–8311. 

Records generated from this meeting 

may be inspected and reproduced at the 

Midwestern Regional Office, as they 

become available, both before and after 

the meeting. Records of the meeting will 

be available via www.facadatabase.gov 

under the Commission on Civil Rights, 

Louisiana Advisory Committee link 

(https://database.faca.gov/committee/ 

committee.aspx?cid=251&aid=17). 

Persons interested in the work of this 

Committee are directed to the 

Commission’s Web site, http:// 

www.usccr.gov, or may contact the 

Midwestern Regional Office at the above 

email or street address. 

Agenda 

Welcome and Roll Call 

Orientation 

Civil Rights Topics in Louisiana 

Next Steps 

Public Comment 

Adjournment 

Dated: May 18, 2017. 

David Mussatt, 

Supervisory Chief, Regional Programs Unit. 

[FR Doc. 2017–10530 Filed 5–22–17; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

Notice on Procedures for Attending or 

Viewing Remotely the Public Hearing 

on Section 232 National Security 

Investigation of Imports of Steel 

AGENCY: Bureau of Industry and 

Security, Office of Technology 

Evaluation, U.S. Department of 

Commerce. 

ACTION: Notice on procedures for 

attending or viewing remotely the 

public hearing. 

SUMMARY: On April 26, 2017, the Bureau 

of Industry and Security (BIS), 

published the Notice Request for Public 

Comments and Public Hearing on 

Section 232 National Security 

Investigation of Imports of Steel. The 

April 26 notice specified that the 

Secretary of Commerce initiated an 

investigation to determine the effects on 

the national security of imports of steel. 

This investigation has been initiated 

under section 232 of the Trade 

Expansion Act of 1962, as amended. 

(See the April 26 notice for additional 

details on the investigation and the 

request for public comments.) 

The April 26 notice also announced 

that the Department of Commerce will 

hold a public hearing on the 

investigation on May 24, 2017 in 

Washington, DC. Today’s notice 

provides additional details on the 

procedures for attending the hearing 

and for viewing the hearing, via 

webcast. 

DATES: The hearing will be held on May 

24, 2017 at the U.S. Department of 

Commerce auditorium, 1401 

Constitution Avenue NW., Washington, 

DC 20230. The hearing will begin at 

10:00 a.m. local time and conclude at 

1:00 p.m. local time. 

FOR FURTHER INFORMATION CONTACT: Brad 

Botwin, Director, Industrial Studies, 

Office of Technology Evaluation, Bureau 

of Industry and Security, U.S. 

Department of Commerce (202) 482– 

4060, brad.botwin@bis.doc.gov. For 

more information about the section 232 

program, including the regulations and 

the text of previous investigations, see 

www.bis.doc.gov/232. 

SUPPLEMENTARY INFORMATION: 

Background 

On April 26, 2017 (82 FR 19205), the 

Bureau of Industry and Security (BIS) 

published the Notice Request for Public 

Comments and Public Hearing on 

Section 232 National Security 

Investigation of Imports of Steel. The 

April 26 notice specified that on April 

19, 2017, the Secretary of Commerce 

(‘‘Secretary’’) initiated an investigation 

under section 232 of the Trade 

Expansion Act of 1962, as amended (19 

U.S.C. 1862), to determine the effects on 

the national security of imports of steel. 

(See the April 26 notice for additional 

details on the investigation and the 

request for public comments.) 

The April 26 notice also announced 

that the Department of Commerce will 

hold a public hearing on the 

investigation. The hearing will be held 

on May 24, 2017 at the U.S. Department 

of Commerce auditorium, 1401 

Constitution Avenue NW., Washington, 

DC 20230. The hearing will begin at 

10:00 a.m. local time and conclude at 

1:00 p.m. local time. The hearing will 

assist the Department in determining 

whether imports of steel threaten to 

impair the national security and in 

recommending remedies, if such a 

threat is found to exist. 

The April 26 notice included the 

following information: (a) Procedures 

for requesting participation in the 

hearing, including procedures for 

submitting comments; (b) conduct of the 

hearing; and (c) special 

accommodations for the hearing. (See 

the April 26 notice for additional details 

on these aspects of the public hearing.) 

Today’s notice provides additional 

details on the procedures for attending 

the hearing and for viewing the hearing, 

via webcast. 

Procedure for Attending the Hearing, or 

Viewing the Hearing Via Webcast 

Registration: Individuals and entities 

who wish to attend the public hearing 

are required to pre-register for the 

meeting on-line at www.bis.doc.gov/ 

232SteelHearing (preferred) or by 

emailing Steel232@bis.doc.gov. Anyone 

wishing to attend this public hearing 

must register by 5:00 p.m. (EST), 

Tuesday, May 23, 2017. 

Webcast: The public hearing will be 

available live via webcast. Please visit: 

www.bis.doc.gov/232SteelHearing. 

Visitor Access Requirement: For 

participants attending in person, please 

note that federal agencies can only 

accept a state-issued driver’s license or 

identification card for access to federal 

facilities if such license or identification 

card is issued by a state that is 

compliant with the REAL ID Act of 2005 

(Pub. L. 109–13), or by a state that has 

an extension for REAL ID compliance. 

The main entrance of the Department of 

Commerce is on 14th Street NW. 

between Pennsylvania Avenue and 

Constitution Avenue, across from the 

Ronald Reagan Building. Upon entering 

the building, please go through security 

and check in at the guard’s desk. BIS 

staff will meet and escort visitors to the 

auditorium. 

Non U.S. Citizens Please Note: All 

foreign national visitors who do not 

have permanent resident status and who 

wish to register for the above meeting 

must fax a copy of their passport to 

(202) 482–5361. Please also bring a copy 

of your passport on the day of the 

hearing to serve as identification. 

Failure to provide this information prior 

to arrival will result, at a minimum, in 

significant delays in entering the 

facility. Authority to gather this 

information is derived from United 

States Department of Commerce 

Department Administrative Order 

(DAO) number 207–12. Please visit 

www.bis.doc.gov/232SteelHearing to 

register and for more details regarding 

this requirement. 

sradovich on DSK3GMQ082PROD with NOTICES

23530 

APPENDIX D - Page 2 

Federal Register / Vol. 82, No. 98 / Tuesday, May 23, 2017 / Notices 

Dated: May 17, 2017. 

Matthew S. Borman, 

Deputy Assistant Secretary for Export 

Administration. 

[FR Doc. 2017–10444 Filed 5–22–17; 8:45 am] 

BILLING CODE 3510–33–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–557–813] 

Polyethylene Retail Carrier Bags From 

Malaysia: Final Results of Antidumping 

Duty Administrative Review; 2015– 

2016 

AGENCY: Enforcement and Compliance, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: On April 6, 2017, the 

Department of Commerce (Department) 

published in the Federal Register the 

preliminary results of the administrative 

review of the antidumping duty order 

on polyethylene retail carrier bags from 

Malaysia covering the period August 1, 

2015 through July 31, 2016. The review 

covers one producer/exporter of subject 

merchandise, Euro SME Sdn Bhd (Euro 

SME). The Department preliminarily 

found that Euro SME did not have 

reviewable entries during the period of 

review (POR). The Department gave 

interested parties an opportunity to 

comment on the Preliminary Results, 

but we received no comments. Hence, 

the final results are unchanged from the 

Preliminary Results, and we continue to 

find that Euro SME did not have 

reviewable entries during the POR. 

DATES: Effective May 23, 2017. 

FOR FURTHER INFORMATION CONTACT: Alex 

Rosen or Brendan Quinn, AD/CVD 

Operations, Office III, Enforcement and 

Compliance, International Trade 

Administration, U.S. Department of 

Commerce, 1401 Constitution Avenue 

NW., Washington, DC 20230; telephone: 

(202) 482–7814 or (202) 482–5848, 

respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On April 6, 2017, the Department 

published the Preliminary Results.1 We 

invited interested parties to comment on 

the Preliminary Results,2 but received 

no comments. The Department 

conducted this review in accordance 

1 See Polyethylene Retail Carrier Bags From 

Malaysia: Preliminary Results of Antidumping Duty 

Administrative Review; 2015–2016, 82 FR 16792 

(April 6, 2017) (Preliminary Results). 

2 Id., 82 FR at 16793. 

with section 751(a)(1)(B) of the Tariff 

Act of 1930, as amended (the Act). 

Scope of the Order 

The merchandise subject to this 

antidumping duty order is polyethylene 

retail carrier bags (PRCBs), which also 

may be referred to as t-shirt sacks, 

merchandise bags, grocery bags, or 

checkout bags. The subject merchandise 

is defined as non-sealable sacks and 

bags with handles (including 

drawstrings), without zippers or integral 

extruded closures, with or without 

gussets, with or without printing, of 

polyethylene film having a thickness no 

greater than 0.035 inch (0.889 mm) and 

no less than 0.00035 inch (0.00889 mm), 

and with no length or width shorter 

than 6 inches (15.24 cm) or longer than 

40 inches (101.6 cm). The depth of the 

bag may be shorter than 6 inches (15.24 

cm) but not longer than 40 inches (101.6 

cm). 

PRCBs are typically provided without 

any consumer packaging and free of 

charge by retail establishments, e.g., 

grocery, drug, convenience, department, 

specialty retail, discount stores, and 

restaurants to their customers to 

package and carry their purchased 

products. The scope of this antidumping 

duty order excludes (1) PRCBs that are 

not printed with logos or store names 

and that are closeable with drawstrings 

made of polyethylene film and (2) 

PRCBs that are packed in consumer 

packaging with printing that refers to 

specific end-uses other than packaging 

and carrying merchandise from retail 

establishments, e.g., garbage bags, lawn 

bags, trash-can liners. 

Imports of merchandise included 

within the scope of this antidumping 

duty order are currently classifiable 

under statistical category 3923.21.0085 

of the Harmonized Tariff Schedule of 

the United States (HTSUS). This 

subheading may also cover products 

that are outside the scope of this 

antidumping duty order. Although the 

HTSUS subheading is provided for 

convenience and customs purposes, the 

written description of the scope of this 

antidumping duty order is dispositive. 

Final Determination of No Shipments 

As noted above, the Department 

received no comments from interested 

parties concerning the Preliminary 

Results on the record of this segment of 

the proceeding. As there are no changes 

from, or comments on, the Preliminary 

Results, the Department finds that there 

is no reason to modify its analysis. 

Thus, we continue to find that Euro 

SME had no reviewable transactions 

during the POR.3 Accordingly, no 

decision memorandum accompanies 

this Federal Register notice. For further 

details of the issues addressed in this 

proceeding, see the Preliminary 

Results.4 

Assessment Rates 

The Department determined, and U.S. 

Customs and Border Protection (CBP) 

shall assess, antidumping duties on all 

appropriate entries of subject 

merchandise, where applicable, in 

accordance with section 751(a)(2)(C) of 

the Act and 19 CFR 351.212(b). For 

entries of subject merchandise during 

the POR for which SME did not know 

its merchandise was destined for the 

United States, we will instruct CBP to 

liquidate un-reviewed entries at the allothers rate if there is no rate for the 

intermediate company involved in the 

transaction.5 The Department intends to 

issue assessment instructions to CBP 15 

days after the date of publication of the 

final results of this review. 

Cash Deposit Requirements 

The following cash deposit 

requirements will be effective for all 

shipments of subject merchandise 

entered, or withdrawn from warehouse, 

for consumption on or after the 

publication date of this notice of final 

results of the administrative review, as 

provided by section 751(a)(2)(C) of the 

Act: (1) For Euro SME, which claimed 

no shipments, the cash deposit rate will 

remain unchanged from the rate 

assigned to Euro SME in the most 

recently completed review of the 

company; (2) for previously investigated 

or reviewed companies not listed above, 

the cash deposit rate will continue to be 

the company-specific rate published for 

the most recent period; (3) if the 

exporter is a firm not covered in this 

review, a prior review, or the less-thanfair-value investigation, but the 

manufacturer is, the cash deposit rate 

will be the rate established for the most 

recent period for the manufacturer of 

the merchandise; and (4) the cash 

deposit rate for all other manufacturers 

or exporters is 2.40 percent. These cash 

deposit requirements, when imposed, 

shall remain in effect until further 

notice. 

Notification to Importers 

This notice serves as a final reminder 

to importers of their responsibility 

under 19 CFR 351.402(f)(2) to file a 

certificate regarding the reimbursement 

3 See Preliminary Results, 82 FR at 16792–93. 

4 Id. 

5 See Antidumping and Countervailing Duty 

Proceedings: Assessment of Antidumping Duties, 68 

FR 23954 (May 6, 2003). 
APPENDIX E - Page 1 

Public Hearing Witnesses 

1. U.S. Congresswoman Marcy Kaptur (Ohio) 

2. David Rintoul, President U.S. Steel Tubular Products, United States Steel Corporation 

3. John Ferriola, CEO/President, Nucor Corporation 

4. Roger Newport, CEO, AK Steel Corporation 

5. John Brett, CEO/President, ArcelorMittal USA 

6. Barbara Smith, COO/President, Commercial Metals Company 

7. Thomas Gibson, CEO/President, American Iron and Steel Institute 

8. Ward Timken, CEO/President, Timken Steel Corporation 

9. Barry Zekelman, CEO/Chairman, Zekelman Industries 

10. Dennis M. Oates, Chairman, Specialty Steel Industry of North America 

11. Terrence Hartford, Vice President, ATI Defense 

12. Lourenco Goncalves, CEO/President, Cliffs Natural Resources Inc. 

13. John Adams, President, Guardian Six LLC 

14. John Phelps Stupp, CEO/President, Stupp Bros., Inc. 

15. Ryan Chadwick, Vice President/General Counsel, Ipsco Tubulars, Inc. (TMK IPSCO) 

16. Gu Yu, First Secretary, People's Republic of China, Ministry of Commerce 

17. Alexander Zhmykhov, Deputy Head of Economic Section, Trade Representation of the 

Russian Federation in the USA 

18. Karl Tachelet, Director of International Affairs, Eurofer 

19. Vitalii Tarasiuk, Minister-Counsellor, Embassy of Ukraine 

20. Tim Johns, Vice President of Manufacturing, Nippon Steel AND Sumikin Cold Heading 

Wire Indiana 

21. Byeong Bae Lee, President, Hyundai Steel America 

22. Gary Horlick, International Trade Counsel, American Institute for International Steel 

23. Robert Budway, President, Can Manufacturers Institute 

24. Tracey Norberg, Senior VP and General Counsel, Rubber Manufacturers Association 

25. Suzi Agar, President, Air Distribution Institute (ADI) 

26. John Cross, Steelscape LLC 

27. Jim Tennant, CEO, Ohio Coatings Company 

28. Leo Gerard, International President, United Steelworkers 

29. David Zalesne, Vice Chairman, American Institute of Steel Construction (AISC) AND 

President, Owen Steel Company 

30. Philip Bell, President, Steel Manufacturers Association 

31. Bill Geary, Chairman, Cold Finished Steel Bar Institute 

32. Ed Vore, Chairman/President, The Committee on Pipe and Tube Imports 

33. Raymond Monroe, Executive Vice President, Steel Founders' Society of America 

34. Mark Millett, President/CEO, Steel Dynamics 

35. Alexander Maass, President, Maass Flange Corporation 

36. Robert Landry, Vice President, Port of New Orleans 

37. Joel Johnson, CEO, Borusan Mannesmann Pipe U.S. (BMP) 
 

APPENDIX F - Page 1 

Commerce Dept. Hearing on National Security 

Investigation on Steel imports 

Testimony as prepared for Congresswoman 

Marcy Kaptur, May 24, 2017 

Today, rising and unprecedented global 

overcapacity and unfair trade practices threaten 

the viability of our United States steel industry. 

Coupled with declining domestic prices, which 

are exacerbated by currency manipulation – we 

sit here today faced with a national steel crisis 

like few times ever before. 

And who bears this burden? It is the working 

families in my region of the country—Ohio, 

Indiana, Michigan, Wisconsin, and Pennsylvania. 

For years, many of us who have fought unfair 

trade deals have seen our neighbors brought to 

their knees. For years, we were promised 

protections to stabilize local economies and open 

global markets. 
 

APPENDIX F - Page 2 

For years, we have stood alongside the hard 

working men and women who built this country 

with their hands, only for their jobs to move 

elsewhere with little regard or afterthought. 

We have seen swift declines in the industrial 

Midwest decimate communities – leaving vacant 

factories and homes and hearts in the wake. 

For far too long, our working families have waited 

simply for the opportunity to compete and for 

fair treatment, only to be met with empty 

promises and pink slips. 

Last month, I wrote the Administration with 

Senators Rob Portman and Sherrod Brown, on 

behalf of the more than 700 idled U.S. Steel 

workers and their families in Lorain, Ohio. They 

were just notified that in less than two weeks, 

they will permanently lose their jobs. 
 

APPENDIX F - Page 3 

Lorain is a town that once employed 12,000 hard 

working men and women in the steel industry. 

Yet it has witnessed hundreds more of the 

remaining steel jobs disappear in the last two 

years. For many decades, Lorain was one of 

America's premier steel towns. Its dear people 

and have been battered by the continuing job 

washout in steel due to unfair trade practices and 

closed markets abroad, particularly China, Russia, 

Vietnam, Korea. 

Take for example Thomas Kelling who is one of 

the many thousands of steelworkers to lose their 

jobs due to unfair trade practices and 

overproduction on the other side of the globe. 

Tom, like many of our steelworkers, began 

working in the mill at a young age. Where he had 

the opportunity to provide for his wife and three 

kids - his oldest, who is now looking at colleges, 

took a job to help support their family. 

After 22 years, and facing yet another lay off and 

unemployment, Tom was forced to reinvent 

himself and fight for his job and family. 
APPENDIX F - Page 4 

While Mr. Kelling pursues every opportunity 

available, he and his colleagues are offered little 

retraining to find replacement work. This forces 

many to move their families out of Ohio. Sadly, 

Mr. Kelling's story is not unique. There are 

millions of Americans across this great land who 

can tell of the exact same tale. 

Not only has this harmed workers and their 

families, but entire communities suffer as small 

businesses lose customers and local governments 

lose revenue. 

It is my understanding that according to Section 

232 the Department of Commerce has 270 days 

to complete an investigation. I urge this 

Administration to work as quickly as possible. 

Many workers and businesses do not have that 

long. 

The time for action is now. And enforcing current 

rules is only the first step in correcting more than 

two decades of injustice. 
 

 

 

APPENDIX F - Page 5 

Testimony of David J. Rintoul
 

President – U. S. Steel Tubular
 

and
 

Senior Vice President – Tubular – United States Steel Corporation
 

For the Hearing on Section 232 National Security Investigation on Steel
 

May 24, 2017
 

Good morning, and thank you for the opportunity to elaborate on the national security 

consequences that significantly exacerbate the harm we suffer when the U.S. fails to act against 

steel products imported in violation of U.S. law. 

My name is David Rintoul. I am a proud 10-year veteran of U. S. Steel and a nearly 40-year 

veteran of the steel industry. It is no small matter that I speak about today – I hope you will agree 

that, in fact, it’s quite a big deal, not only for one of the nation’s foundational companies, but 

also for the United States as a whole. 

For more than a century, the iconic United States Steel Corporation, born during America’s 

industrial ascendancy, represented the unique ingenuity, competitiveness, and boundless 

aspirations of our country. As one of the leading pioneers of the American Century, U. S. Steel 

literally helped to lay the foundation of our great cities, build the tools and transportation 

1
 
 

 

 

 

APPENDIX F - Page 6 

infrastructure that unified the continent, and heeded the call to arms when, as a nation at war, we 

stood against the forces of those who would forever change our way of life. 

Through it all, we helped to lead the defense of America – at home and abroad. We understood 

our company and industry to be more than just businesses – we treasured our role as Americans. 

For most of this time, the threats to our security were readily identifiable and the requirements of 

our response were equally clear. Not so today. In 2017, the threats to America’s national defense 

have multiplied and now present themselves in fundamentally different forms. We still need 

tanks on the battlefield and airpower to control the skies, but now we also need to guard against 

asymmetrical risks such as those we see, for example, in cyberspace. 

And, make no mistake, we – U. S. Steel and other U.S. corporations – see these threats 

ourselves: we have been the direct victim of trade secret thefts accomplished through 

sophisticated hacking into our internal computer systems. The indirect victims, of course, are the 

American people and the military that protects them and counts on us to provide better, stronger, 

more effective steel products than those possessed by others. 

Just as the global supply chain has created an infrastructure that is regularly beneficial for 

consumer products from cars to smart phones to t-shirts, it is at the same time pernicious when it 

prevents us as a nation from being able to domestically source and produce the materials needed 

to ensure our energy independence and defense – whether on the battlefield, or in the superiority 

of our energy supply, or the safeguarding of our vital corporate and government secrets. 
 

 

 

APPENDIX F - Page 7 

One aspect of our defense infrastructure that is dangerously threadbare involves our country’s 

reliance on imported steel products known as oil country tubular goods (OCTG). A family of 

products that makes it possible for energy companies to explore for, retrieve, and bring to market 

the oil and gas America needs to guard its security through a reliable and dependable supply of 

domestically-produced energy. 

Today, imports make-up approximately 50 percent of the OCTG market. Driven by Chinese 

manufacturers over the last several years and now overtaken by state of the art plants in South 

Korea, foreign suppliers have made it their mission to steal this market from U.S. companies, 

well aware of the danger such a loss of domestic capacity would pose to America’s national 

security. 

So, you might ask, how did we get here and how bad is it? Sadly, the answer is three-fold. 

First, the governments in South Korea, China, and elsewhere have deemed dominance in this 

market a matter of their national security. To accomplish this goal, they’ve plainly subsidized 

their domestic industries, provided as much regulatory and other support as needed, and worked 

steadily to undermine U.S. efforts. 

And, for the record, the domestic market for OCTG goods in South Korea is non-existent and in 

China is minimal, at best. 

3
 
 

 

 

 

APPENDIX F - Page 8 

Second, the result of this behavior by these countries in large swaths across America has been 

predicable and painful in human terms and has left us with a long-term deficit when it comes to 

this key manufacturing capability. In the tubular business at U. S. Steel alone, this unfair 

competition has resulted in the closure of 50 percent of our mills since 2014 – and forced us to 

lay off far too many of our friends and colleagues as a result. 

In just the last few years, we have been forced to abandon more than 40 percent of the OCTG 

products we previously made, as the tsunami of imports have driven down prices to levels where 

it is impossible for us, and others who operate within the traditional rules and boundaries, to 

successfully maintain our market presence. 

And the harm is agonizingly real. In 2014, we had more than 3,000 people working as part of our 

team focused on tubular products and production. At its low point six months ago, that number 

had shrunk to 950 – a cut of more than two thirds. Even today as the energy market has begun a 

modest turnaround, we’ve only been able to engage a total of 1,300 people on this business. 

In the last two years alone, U. S. Steel’s tubular business has suffered severe financial losses. 

Adding to this pain is the fact that these losses occurred while imports from South Korea, 

Mexico, and Russia continued to cross our borders – including those from some competitors who 

claim to be American but closed their American plants to bring pipe in from their foreign 

operations. 

4
 
 

 

 

APPENDIX F - Page 9 

Moreover, the unfair trade attacks from government-subsidized foreign competitors undermines 

our ability to have the resources necessary to sufficiently invest in the research and development 

that is the life’s blood of a business that relies on continual innovation. We need our government 

to stand by us and the rule of law – if it will not, we will all face the prospect of surrender in a 

fight that was anything but fair. 

Which brings me to point three. As a nation, we need to understand that the traditional remedies 

used in trade-related matters, from increased import duties to more rigorous enforcement, simply 

wither in the face of the audacity of these foreign companies and their government sponsors. 

While these foreign companies and governments operate under the guise of competition and 

fairness, their actions are driven by a no-holds barred, ruthless focus on winning control over the 

markets that Americans need to defend the nation against near- and long-term threats. 

And, to be candid, our traditional remedies are no longer the deterrent – much less the 

punishment – that they once were. Despite the implementation of trade margins on certain 

OCTG products, certain countries simply thumb their nose at these remedies, and see our country 

as the answer to ensure their stability by continuing to export their unemployment to this 

country. As a consequence, we need new, more effective tools to level the playing field, 

especially when it comes to such direct threats to American national security. 

Putting a stop to this foreign government-enabled encroachment into America’s critical energy 

independence infrastructure is no less a matter of the nation’s security than is building new 

generations of ships and aircraft and strengthening our cyber defenses. They are all crucial. 

5
 
 

 

APPENDIX F - Page 10 

Simply put, if we as a nation are hostage to other parts of the world for the development of key
 

pieces of our energy sector, then we can never lay claim to true energy independence – which 

puts us at a tremendous, macro-level risk. 

As 21st century security threats have multiplied, changed their shape, and their attack vectors – 

so too must our vision of the most effective response. Today, protecting our homeland’s borders 

is just as important as ensuring that we have the materials, tools, and political will to match these 

expanded challenges with an equally broad definition of a threat to our collective national 

security. At U. S. Steel, the only large, integrated American company that manufactures OCTG 

goods, we proudly embrace our role as one of the nation’s core industries while at the same time 

bringing a clear-eyed view of the market in the U.S. and globally as fundamentally distorted as 

the result of large volumes of competing products driven by foreign government subsidies and 

other unfair practices. 

In conclusion, let me add that the challenges we face extend far beyond a single industry or 

issue. As I mentioned earlier, the tubular products we produce are but a small subset of all that 

U. S. Steel does. The trends that I have outlined with respect to OCTG have been replicated 

many times over across all of our businesses. From the automotive sector to a broad range of 

industrial production to the mining and consumer products arenas to tin products, the global 

assault on U.S. steelmakers has been acute and left our entire industry wounded. 

The plants we build and the blast furnaces that operate across the country don’t work like a light 

switch. You can’t turn them off one day and then simply hit “on” and they are back in business. 

6
 
 

APPENDIX F - Page 11 

American companies have always thrived when the playing field is level and the rules are clear. 

Honest competition is at the heart of our democracy and we look forward to a time in the near 

future when that norm, once again, governs the marketplace. 

Thank you again for the opportunity to share our views on the need to clarify what we on the 

front lines of manufacturing know is the most effective approach to protecting America’s 

national security. 

7
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 12 

Section 232 National Security Investigation of Steel Imports 

Testimony of John Ferriola 

Chairman, CEO & President of Nucor Corporation 

May 24, 2017 

Good morning. I am John Ferriola, Chairman, CEO, and President of Nucor 

Corporation. On behalf of Nucor and our nearly 24,000 teammates, I would like to 

thank you for the opportunity to appear before you today. We welcome this 

investigation as a means of addressing the unprecedented crisis facing the U.S. steel 

industry, caused primarily by massive global overcapacity and historic import levels. 

This crisis must be resolved if we are to continue supplying steel for U.S. national 

defense and critical infrastructure applications. 

As the largest steel producer and recycler in the United States, Nucor is proud 

to supply our armed forces with a wide variety of mission-critical steel products to 

keep our soldiers and our nation safe. For example, Nucor bar products are used in 

Humvee suspensions and track forgings for the Abrams tank and Bradley Fighting 

Vehicle. Our structural steel goes into the Patriot missile system, and our armor 

plate protects soldiers and sailors in armored vehicles, aircraft carriers, and 

destroyers. In addition, Nucor steel supports critical transportation and energy 

infrastructure that is vital to our entire economy. 

We agree with President Trump that “core industries such as steel . . . are 

critical elements of our manufacturing and defense industrial bases.” That is why 

Nucor has invested significantly to become a reliable supplier of these products. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 13 

Playing a role in our nation’s defense requires a long-term financial commitment. 

For example, Nucor is one of only two steel companies in the U.S. certified to 

produce Navy-grade armor plate for aircraft carriers, destroyers, and submarines. 

Entering this market required purchasing specialized equipment, hiring 

knowledgeable personnel, developing advanced chemistries and processes, and 

undertaking rigorous testing and certification procedures to meet Navy requirements. 

This is the type of continual investment that is needed to satisfy the rapidly evolving 

needs of our armed forces. 

Unfortunately, global overcapacity and unfairly traded imports threaten our 

ability to invest. Production overcapacity in the steel industry has reached crisis 

levels. There is more than 700 million metric tons of global steel overcapacity, more 

than half of which is located in China. In fact, China’s state-supported steel industry 

now exports more steel than is produced by all three NAFTA countries combined. 

China is at the heart of the crisis, but governments in countries like Korea, Brazil, 

Russia and Turkey also do their part to drive excess steel capacity. These 

governments continue to flood the world with artificially cheap steel, and much of 

it finds its way to the United States, where markets are open and the government 

doesn’t keep mills in business for political reasons. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 14 

A sustained surge of low-priced imports has eroded the U.S. steel industry. 

Over the last decade, shipments have fallen by approximately 20%, and nearly 

20,000 workers have lost their jobs. In 2015, the industry operated at a $1.7 billion 

net loss, and despite improving demand in 2016, American mills only operated 

around 70% of their total capacity. U.S. steelmakers can barely maintain what they 

have, let alone continue to invest in developing new products. This threatens the 

industry’s ability to supply the advanced steel products that our military relies on. 

Steel used in national defense applications may be a relatively small share of 

our overall sales, but those products are made at the same facilities and by the same 

workers who make other products. A commercially healthy industry is vital to 

ensure a stable supply of products for national security and critical infrastructure 

applications. This includes the entire production chain beginning at the melting 

stage and continuing through finishing and fabrication. In a time of national crisis, 

the U.S. cannot afford to rely on imported steel slabs from foreign suppliers like 

China or Russia. National security begins with primary steelmaking. 

Broad-based action is the only way to target all imports and also address the 

root cause of the current crisis – chronic overcapacity in countries that do not operate 

on a market basis. 
 

 

 

APPENDIX F - Page 15 

In closing, we urge you to find that steel imports threaten our national security, 

and to take broad action that will ensure the long-term viability of our nation’s steel 

industry. 

Thank you. 
 

 

APPENDIX F - Page 16 

Testimony of Roger K. Newport 

Chief Executive Officer 

AK Steel Corporation 

Thank you Secretary Ross. My name is Roger Newport, and I am the CEO of AK Steel 

Corporation. I want to thank you for the opportunity to testify on behalf of AK Steel and our 

8,500 U.S.-based employees. 

AK Steel welcomes the Department of Commerce’s Section 232 investigation of the 

serious threat posed by imported steel to our national security. For decades, the steel industry 

has battled global overcapacity and the oversupply of U.S. imports, many of them dumped and 

subsidized. Just since the beginning of 2015, over 14,000 steel workers have been laid off and 

numerous production facilities have been idled, including AK Steel’s blast furnace and 

steelmaking operations in Ashland, Kentucky. Unfortunately, unfairly traded imports remain a 

severe threat to the long-term viability of the domestic steel industry. 

AK Steel is the only company in the United States that produces a combination of flatrolled carbon steel, stainless steel, and electrical steel products. While I can certainly speak to 

the adverse impact of imports on each of these types of steel, I would like to focus my remarks 

today on electrical steel. AK Steel is the sole domestic producer of grain-oriented electrical 

steel, or GOES, which is used in cores and core assemblies for the production of electrical 

transformers. Transformers are a key component of our nation’s electricity grid, from the large 

step-up transformers that transmit power across the entire grid, to the smaller pole- and padmounted transformers that deliver power to individual homes and businesses. AK Steel is also 

the sole domestic producer of high-end non-oriented electrical steel, or NOES, products. NOES 

1
 
APPENDIX F - Page 17 

is also critical for the electrical grid, as it forms the heart of massive generators that actually 

create electrical energy. 

About 2,000 highly-skilled workers melt and finish electrical steel products at our Butler 

Works facility in Pennsylvania and finish electrical steel at our Zanesville Works facility in 

Ohio. AK Steel also conducts extensive electrical steel research and development at our state-ofthe-art Research and Innovation Center in Middletown, Ohio. 

While we strongly believe that electrical steel plays a crucial role in our national security, 

so do many others. Pursuant to policy directives issued by both President Obama and President 

George W. Bush, the Department of Energy has identified electricity transmission systems as 

infrastructure that is critical to our national security and that requires urgent attention. The 

government has identified equipment failure and aging infrastructure in the U.S. as threats to our 

national security. Because virtually all households and businesses rely on electricity, the security 

and long-term viability of U.S. electrical infrastructure is a critical, national imperative. 

A secure, reliable supply of electrical steel is necessary to maintain the electrical grid. 

Major blackouts, such as the one in San Francisco last month that shut down the financial center 

of the city, demonstrate that the lack of reliable electrical grid infrastructure is a major threat to 

our national economy. Major blackouts may occur as a result of grid obsolescence, severe 

weather events like Hurricane Katrina or Superstorm Sandy, or cyber, terrorist or other attacks 

on our electrical infrastructure. A secure, domestic source of electrical steel is more important 

than ever before. Fortunately, AK Steel has sufficient production capacity to meet current and 

future estimated demand within the United States. 

Due to competition from dumped and subsidized imports, the only other U.S. producer of 

GOES, Allegheny Technologies, shuttered a plant and discontinued GOES production in 2016. 

2
 
APPENDIX F - Page 18 

High-end electrical steel is an incredibly difficult product to manufacture, as it requires a 

significant amount of dedicated, capital equipment and a sophisticated, well-trained workforce. 

Therefore, if AK Steel were to exit the market, there would be no operational electrical steel 

manufacturing equipment in the United States, the specialized labor and related expertise in 

operations would be lost, and many of AK Steel’s talented operators and researchers would 

either re-locate to other businesses, industries and/or foreign countries, or become unemployed. 

AK Steel strongly supports Presidential action to stem the surge of imported electrical 

steel. We are, however, very concerned that importers will simply side-step the relief that covers 

steel by using foreign electrical steel to build cores and transformers abroad, then import those 

cores and transformers into the United States. Therefore, to effectively address the vital national 

security interests of the United States and to protect the domestic electrical grid for the long-run, 

the Department of Commerce must include imported cores and transformers in any relief that 

covers imports of electrical steel. Without addressing this supply chain issue, any remedy on 

electrical steel will be easily circumvented. Keeping imports of electrical steel, cores, and 

transformers at a reasonable level would balance the interests of protecting our national security 

with allowing a reasonable level of imports to meet the ongoing needs of buyers of these 

materials. Complete reliance on imports for these critical products, however, would ultimately 

lead to dependency on foreign sources for the materials needed to maintain and modernize the 

electrical grid. 

Thank you again for the opportunity to testify. I would be pleased to answer your 

questions. 

[END] 

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APPENDIX F - Page 19 

TESTIMONY OF JOHN BRETT 

Hearing on Section 232 National Security Investigation
 

May 24, 2017
 

Good morning. I am John Brett, President and CEO of ArcelorMittal USA. Thank 

you for holding this hearing today on the impact of steel imports on national security. Our 

country’s defense and industrial base depends on a strong and sustainable domestic 

steel industry to supply our military and critical infrastructure needs. 

Mr. Secretary, our company has a long and rich history of supporting our nation’s 

defense capabilities. We are also a major supplier to the U.S. energy industry which plays 

a key role in moving the United States toward energy independence. Today I would like 

to speak to the relationship between supplying our military customers and our broader 

commercial business, our efforts to meet the demands of our energy customers, and our 

view of the fundamental challenge facing U.S. and global steel producers. 

Serving the needs of our nation’s military has been a long-time, multi-generational 

priority of ArcelorMittal USA and our predecessor companies; in particular, Lukens Steel 

Company and Bethlehem Steel Corporation. Today this tradition continues as 

ArcelorMittal USA supports our nation’s men and women in uniform by supplying steel for 

a variety of military applications on land and at sea. Providing steel to the U.S. military, 

whether the Navy, Army, Marine Corps, Coast Guard or Air Force, is a tremendous source 

of pride for our company and our employees. 

We are currently the largest supplier of armor steel plate for the United States 

Armed Forces. Our armor products find application in many fighting vehicles used by the 

Army and Marine Corps, including the Abrams M1 main battle tank, the Bradley fighting 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 20 

vehicle, M88 recovery vehicles, the Stryker family of fighting vehicles, various MRAP 

(Mine Resistant Ambush Protected) vehicles and the up-armored Humvee. 

The shipbuilding industry has also been one of the long-term staples of 

ArcelorMittal’s business. We supply steel for a variety of United States Navy vessels, 

including aircraft carriers, submarines, destroyers and other ships. The Navy’s most 

recent force structure assessment concludes that addressing current and future threats 

to U.S. national security will require a larger fleet of 350-360 ships, which would entail an 

increase in naval shipbuilding over the coming years. The Navy, the shipbuilders and their 

suppliers, including ArcelorMittal, are working together to ensure that the industrial supply 

base can accommodate an accelerated shipbuilding schedule. 

Preserving the domestic steelmaking and finishing capacity to provide the highly 

specialized steel for U.S. defense purposes is without a doubt a national security issue. 

However, the steel tonnage directly used for defense applications is quite small compared 

to that of the broader commercial market for steel products. As large a supplier as 

ArcelorMittal USA is to the U.S. military, our sales into defense applications represent 

only 1 percent of our total production, and less than 5 percent of our steel plate production. 

In other words, defense-related sales of steel alone are not the determining factor 

in whether a steel mill is successful and sustainable. Instead, the commercial viability of 

a steel operation is imperative for retention of that operation’s ability to serve the defense 

needs of the nation both in times of peace and war. 

As the Department knows, ArcelorMittal USA has joined with other U.S. producers 

to bring a number of trade remedy cases in response to a flood of unfairly traded imports 

from China and other countries in recent years. Our operations which produce steel for 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 21 

military applications were not immune from the negative impact of these imports. Along 

with other U.S. plate producers, we petitioned this Department and the International Trade 

Commission for relief from unfairly traded imports of cut-to-length plate from 12 countries, 

including China, after these imports increased by over 100 percent between 2013 and 

2015. The ITC found that, as a result, the U.S. plate industry’s operating income had 

dropped 75% over those three years. 

Here’s what the import surge meant for ArcelorMittal USA – we saw our steel plate 

sales drop by a third in one year. By 2015, our plate operations were running at only 55% 

of their capacity. Our plate prices fell to the lowest levels we had seen in more than ten 

years. When we are forced to price at levels that do not cover our costs, then we also 

are not generating the capital required to reinvest in our operations. And if we cannot 

reinvest, we cannot remain on the cutting edge of new technology for the future, for our 

commercial business or for our military business. In other words, the impact of the imports 

is felt throughout our business, commercial and military. 

Staying on the cutting edge of new technology is equally important for our energy 

customers. ArcelorMittal USA produces a full range of steel grades for the energy 

transmission and distribution markets, including for the production of large diameter line 

pipe. We’ve been a leader in developing wide API X-70 steel for U.S. pipeline projects. 

We are committed to serving U.S. customers who need this advanced product and have 

invested significantly in the production of both plate and hot-rolled steel for our line pipe 

customers. Those investments include accelerated cooling, surface quality control, slab 

processing and software for process control and statistical analysis to support our X-70 

and other CTL plate production capabilities. But our ability to serve these markets is 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 22 

threatened when competition from low-priced, unfair imports precludes us from building 

a sustainable business. 

The plate case is just one example of the impact that imports have had on our 

business. It has been a similar story on hot-rolled, cold-rolled, and corrosion-resistant 

steel. U.S. imports of flat rolled steel products increased 69 percent between 2013 and 

2014. The impact on our business was devastating. 

Mr. Secretary, we very much appreciate the attention this Administration has 

devoted to the state of the U.S. steel industry since it took office in January. It was my 

honor to stand in the Oval Office when the President announced the initiation of this 

Section 232 investigation. Nonetheless, the United States must address the problem of 

global excess steelmaking capacity or every other action you, or we, take won't matter. 

This Department knows the numbers well – Chinese government industrial and 

trade policies have driven Chinese steel production from 128 million metric tons in 2000 

to over 808 million metric tons last year. In 2016, China exported 108 million metric tons. 

Those exports have had direct negative effects on U.S. steel producers. They also have 

an indirect impact when they displace steel in other countries whose producers then ship 

to the U.S. market. And we have seen an increase in imports of downstream products 

made from cheap Chinese steel. 

It is easy, and correct, to point to China as the main culprit. But it is not just China. 

We face challenges from countries as diverse as Korea, Russia, Turkey, and others. 

The result – we sell less steel, receive less money for the steel we do sell, and 

employ fewer workers. Over the long term, this situation is not sustainable for U.S. 
 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 23 

producers who operate without the kind of government support provided to the Chinese 

steel industry. 

Mr. Secretary, we welcome this investigation because we need solutions to the 

unfair import problem at the U.S. border. The antidumping and countervailing duty orders 

have certainly been helpful but are being circumvented. 

But as you consider additional actions, please remember that we also need to find 

a solution to the excess steel capacity that is impacting global markets. We need 

governments throughout the steelmaking world to come together to make clear to China 

that they need to reduce their excess capacity in steel making – the way a market-based 

economy would – rather than exporting it. An objective of any actions should be to 

increase global pressure on China to change the policies that led to the creation of noneconomic steel capacity and to discourage other governments from adopting similar 

policies. Those policies have distorted global trade flows and harmed our national 

security. 

Thank you. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 24 

TESTIMONY OF BARBARA SMITH
 

INVESTIGATION OF THE IMPACT OF STEEL IMPORTS ON THE NATIONAL SECURITY
 

OF THE UNITED STATES
 

MAY 24, 2017
 

Good morning. My name is Barbara Smith. I am the President and Chief 

Operating Officer of Commercial Metals Company, a steel producer headquartered 

in Irving, Texas. I appreciate the opportunity to appear before you to discuss why 

high levels of imported steel threaten the national security of the United States. 

Commercial Metals Company is vertically integrated. We are active in all 

aspects of the steel industry, from buying and selling scrap through steel 

production to distribution. The scope of CMC’s global operations gives us a unique 

perspective on the U.S. steel industry, and the forces affecting it. 

CMC is also one of the world’s most technologically advanced and efficient 

steel producers. We have pioneered micromill technology, which enables us to 

produce rebar in the most efficient and lowest cost manner possible. I would like to 

stress the fact that the American steel industry is as modern and competitive as any 

in the world. Our industry can provide the United States with nearly all the steel 

products a modern industrial economy needs. However, steel imports are seriously 

damaging our ability to produce the steel products the United States requires for 

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APPENDIX F - Page 25 

national defense, critical infrastructure, and our general economic strength. If this 

trend is not reversed, the consequences will be serious. 

As you have already heard, steel is essential to the national security of the 

United States. The product CMC makes that is most obviously vital to our national 

security is advanced armor plate, which is produced by one of our subsidiaries, 

CMC Impact Metals. CMC Impact Metals makes three different grades of military 

armor plate. These are used in a variety of applications, including tanks, mine 

resistant ambush protected vehicles – MRAPS – and other military vehicles. In 

fact, during the MRAP build-up in the early 2000s, we were the first new armor 

plate supplier approved by the Defense Department in over two decades. The lives 

of our soldiers literally depend upon this product. Among other projects for the 

Defense Department, CMC was proud to supply the rebar used to repair the 

Pentagon after the 9/11 terrorist attacks. 

In addition to armor plate for the military, CMC produces a variety of 

specialized bar, rounds, angles, and shapes where high strength and abrasion 

resistance are critical. These products are used by the transportation, energy, 

construction, and mining sectors. Of course, these critical infrastructure sectors are 

vital to our national security as well. 

Production of armor plate and these other specialized products requires 

sophisticated equipment and, just as significantly, skill in steelmaking. To be able 

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APPENDIX F - Page 26 

to make these products, CMC has invested millions of dollars in equipment, 

technology and training. 

However, CMC’s most critical role in national security is our role as a major 

producer of rebar, a product of major importance to this nation’s infrastructure. 

National Security depends upon Economic Security. Economic Security depends 

upon a broad-based vibrant and self-sufficient economy. Our economy depends 

upon a world class system of infrastructure, connecting and supporting all 

economic activity here at home and abroad. 

CMC’s main product, rebar, is an essential product for national security as 

this product is used to support every aspect of our critical infrastructure. This 

includes the roads, bridges, airports, power transmission lines, and all the other 

facilities that we use every day, mostly without ever thinking about them. There is 

a reason the official name of the interstate highway system is the National System 

of Interstate and Defense Highways. To build and maintain this infrastructure, you 

need rebar. God forbid that we are attacked again on our own soil, without the 

capability to produce the necessary products like rebar to restore our country. 

Unfortunately, many of the world’s major producers, including Turkey, 

China, Taiwan, Japan, and Mexico, make far more rebar than they need for the sole 

purpose of export to other countries. These exporters have taken full advantage of 

the open U.S. market, as rebar imports increased by nearly 50 percent from 2014 to 

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APPENDIX F - Page 27 

2016. The U.S. International Trade Commission calculates that, before the recent 

trade cases, rebar imports held a market share of more than 20 percent. 

One of the factors the Commerce Department considers in investigations 

like this is the reliability of import supply. Rebar imports are generally sold by 

opportunistic traders who have no loyalty to the U.S. market. It seems very 

dangerous to me to depend on imports from questionable sources of a product so 

essential to our national security and economic prosperity as rebar. 

These growing imports have had a significant effect on CMC’s profitability, 

employment, and our ability to innovate and invest. To fund innovation and 

investment, we have to generate a return on investments that satisfies our 

shareholders. Imports have made it increasingly difficult to do that. In response to 

the flood of imports over the past several years, CMC has been forced to close 30 

U.S. locations since 2008, leading to a reduction in our workforce of 4,000 jobs. 

Each job in the steel industry supports another seven jobs in upstream and 

downstream industries, and we are painfully aware of the effect these reductions 

have had on local communities across the United States. 

Imports have also adversely affected our ability to make the new 

investments we need to remain competitive. CMC invested millions in our 

technologically advanced micromill in Mesa, Arizona and in building the most 

modern rebar mill in the world in Durant, Oklahoma. The technology in these mills 

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APPENDIX F - Page 28 

reduces energy and material usage in steel production to even lower levels, and we 

thought that these investments would increase our competitiveness significantly. In 

fact, we were planning to commission a whole series of micromills, which would 

have created thousands of high-paying jobs across the United States. 

Unfortunately, competition from imports has been so fierce that we have been 

forced to put our expansion plans on hold. The situation has gotten so bad that the 

returns on a number of our investments aren’t even covering our cost of capital. 

Our story is repeated throughout the domestic steel industry. 

Allowing our steel industry to shrink further will endanger our national 

security. If CMC cannot continue to invest, it won’t be able to produce either the 

armor plate we need for Army vehicles and other military applications, the 

specialized plate and bar products required by the transportation, energy, 

construction, and mining sectors, or the rebar needed for every kind of 

infrastructure application. The United States is nearing the point where we will be 

depending on other countries for the steel products that are essential to our national 

security. I believe we all can agree that this is a very dangerous proposition. I urge 

you to conclude that steel imports threaten the national security of the United 

States, and to recommend to the President that he take prompt and comprehensive 

action to address this crisis. 

Thank you. 

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APPENDIX F - Page 29 

Testimony of Thomas J. Gibson
 

President and CEO
 

American Iron and Steel Institute
 

For the Hearing on Section 232 National Security Investigation on Steel
 

May 24, 2017
 

Good morning, I am Tom Gibson, President and CEO of the American Iron and 

Steel Institute. AISI represents both integrated and electric furnace steelmakers 

accounting for approximately 70 percent of U.S. steelmaking capacity, with facilities in 

41 states. I appreciate the opportunity to testify at this hearing today. 

A strong and viable domestic steel industry is critical to America’s national 

defense, national economic security and homeland security. Virtually every military 

platform is dependent on U.S- produced steels and specialty metals, in applications 

ranging from aircraft carriers and nuclear submarines to Patriot and Stinger missiles, 

armor plate for tanks and field artillery pieces, as well as every major military aircraft in 

production today. These critical applications require consistent, high quality domestic 

supply sources. 

Steel’s importance to national security must also be looked at in a broader 

context to include both direct and indirect steel shipments to the military infrastructure 

that are needed to support our defense efforts, both at home and overseas -- e.g., all of 

the steel that goes into the rails, rail cars, ground vehicles, support ships, military 
 

 

 

 

 

 

 

APPENDIX F - Page 30 

barracks, fences and bases, which are not classified as shipments to ordinance, aircraft, 

shipbuilding or other military uses. 

On a broader scale, steel is also essential to our nation’s critical infrastructure, in 

terms of transportation, public health and safety, and energy, to name a few key areas. 

Our military and our broader economy depend on transportation infrastructure like 

roads, bridges, railroads, transit systems and airports, all of which are built with steel 

products such as rebar, plate, sheet and fabricated structural members. Public health 

and safety require reliable and efficient water and sewage systems that are built with 

steel components, including tubular goods, tanks and culverts. 

In addition, steel is critical to our energy security and infrastructure. Our 

nation’s security depends on a reliable domestic energy supply and the domestic steel 

and products made from steel that are necessary to develop and transport the energy. 

Oil country tubular goods are essential to oil and gas production, and steel linepipe is 

needed to move these energy supplies to market. A typical refinery contains miles of 

specialty pipe, large sophisticated boilers and process pressure vessels, thousands of 

custom made valves and fittings -- all made from steel designed expressly for critical 

applications. 

Electric power generation is another critical national security need served by 

steel. Grain-oriented electrical steels (GOES) are a principal raw material for power and 
 

 

 

 

APPENDIX F - Page 31 

distribution transformers, which are critical to the nation’s electrical grid and our 

national security. Non-oriented electrical steels (NOES) are an important raw material 

for use in critical infrastructure, including for large cores in electrical power generators 

and industrial applications, such as for oil drilling and oil and gas pipelines. Steel is 

also present in the structures and in the boilers, pressure vessels and pipe that is needed 

to produce and deliver the steam or water to the generators. Transmission towers, made 

entirely of steel, carry high voltage electric wires and provide support for our nation’s 

microwave, cellular and other communications equipment. 

The U.S. steel industry’s ability to supply our defense establishment and our 

nation’s critical infrastructure needs depends on the steel industry’s continued ability to 

compete in its commercial markets and maintain a domestic manufacturing presence. 

Repeated surges in imports of dumped and subsidized steel products from numerous 

countries in recent years have injured the U.S. industry and threaten further injury, 

putting our national security very much at risk. 

Finished steel imports took a record 29 percent of the U.S. market in 2015, while 

domestic steel shipments declined by 12 percent, and capacity utilization averaged just 

70 percent for the year. While total steel imports declined by 15 percent in 2016 as a 

result of a number of trade cases brought by the domestic industry against dumped and 

subsidized imports, foreign import market share still remained historically high at 25.4 

percent for the year. And imports in 2017 are once again on the rise – with total imports 
 

APPENDIX F - Page 32 

up 19 percent in the first three months of the year compared to the same period in 2016, 

and finished steel imports are now taking 26 percent of the market. 

These high levels of imports in recent years have been a critical factor forcing 

several steel companies to temporarily close major steel-making facilities. Employment 

in the steel industry declined by 14,000 jobs from January 2015 to December 2016, before 

seeing a slight recovery in the first part of this year. 

Foreign government interventionist policies in the steel sector have fueled 

massive, and growing, global overcapacity in steel, which the OECD has estimated to 

be more than 700 million metric tons. We estimate that more than half of that 

overcapacity – 425 million metric tons – is located in China, where government marketdistorting policies have produced a dramatic increase in the size of the Chinese steel 

industry, to the point that today it represents about half of all global steel production. 

As a direct result of Chinese government policy direction and subsidies, Chinese 

crude steel production soared from 128 million metric tons in 2000 to 823 million metric 

tons in 2014, before declining slightly to 808 million MT in 2016. In the first three 

months of 2017, however, Chinese crude steel production is once again up 4.6 percent 

compared to the first quarter of 2016. 
 

 

APPENDIX F - Page 33 

After many years of growth, Chinese steel demand appears to have peaked in 

2013. The World Steel Association has reported that Chinese steel consumption 

declined by 3.3 percent in 2014 and by 5.4 percent in 2015, before increasing slightly by 

1.3 percent in 2016. Furthermore, the demand situation in China is expected to worsen 

over the coming decade. The POSCO Research Institute forecasts that steel demand in 

China will decrease steadily until 2025, due to the slowdown in the Chinese 

construction and manufacturing industries. 

With China’s domestic steel demand declining, the Chinese steel industry has 

increasingly relied on exports to consume its surplus steel production. China exported 

a record 94 million metric tons of steel products in 2014, an increase of 52 percent from 

2013. That trend accelerated in 2015 with Chinese steel exports rising to 112 million 

metric tons, an amount big enough to meet all steel demand in Germany and Japan for 

a year and leave almost 9 million metric tons to spare. In 2016, Chinese steel exports, 

while down slightly from 2015, continued at historically high levels in excess of 108 

million metric tons. 

This massive increase in Chinese exports to the world has resulted both in 

increased imports of Chinese steel into the United States and in increased imports from 

third countries that have themselves received increased Chinese steel imports. In the 

case of direct steel exports to the United States, due to the imposition of trade relief by 
 

 

 

APPENDIX F - Page 34 

the Commerce Department in several antidumping and countervailing duty cases over 

the past few years, Chinese direct shipments have declined since 2014. 

But while direct steel imports from China may be down, the high level of 

Chinese exports to the world continue to put pressure on the global steel market, and 

lead to increased imports from many third countries. Chinese exports to third countries 

are being further processed into downstream steel products that are then exported to 

the United States. For example, Chinese billets are being further processed in Turkey 

into long products which are then exported to the United States, while Chinese flatrolled steel is being converted into pipe products in Korea which are then, according to 

Commerce Department determinations, being dumped into the U.S. market. In 

addition, Chinese cold-rolled and corrosion-resistant steel is being shipped to Vietnam 

for minor further processing before being exported to the United States is a blatant 

effort to circumvent AD and CVD orders on these products. As a result, the U.S. 

industry continues to suffer from the injurious impact of Chinese overproduction of 

steel that is exported to world markets. 

In addition, the Chinese model of government intervention in the steel industry 

is being emulated in other countries as well, perpetuating the growing overcapacity 

problem. Vietnam and India, for example, both have explicit government plans to 

support the expansion of their steel industries and to increase their exports while 
 

 

 

APPENDIX F - Page 35 

restricting imports. As these plans are implemented, further injury will be suffered in 

the United States from dumped steel products. 

As one of the most open markets in the world, the United States is often the 

target of dumping by steel producers from countries around the world. In many cases, 

these foreign producers are also subsidized by their governments. 

To date, the U.S. steel industry has relied on our trade laws to seek to address the 

impact of unfairly traded steel imports in our market. While the antidumping and 

countervailing duty laws have provided some relief, because the resulting orders are 

necessarily country and product specific, they leave openings for steel products not 

subject to orders to continue to surge into our market. 

Accordingly, AISI recommends that the Administration use the current section 

232 investigation to fashion a more comprehensive and broad-based program of action 

to safeguard America’s national security. 

Among the goals of this program should be to increase pressure on China and 

other countries around the globe to reduce steelmaking capacity. 

Thank you for the opportunity to testify today. I would be happy to answer any 

questions. 
Ward Timken, Timken Steel Corporation 

APPENDIX F - Page 36 

Department of Commerce 

Section 232 National Security Investigation of Imports of Steel 

I’d like to thank Secretary Ross and the public officials here 

today for the opportunity to testify at this hearing. 

My great-grandfather H.H. Timken established steel production 

in Canton, Ohio in 1917. Generations of people built this 

company from a one-customer enterprise that made bearing 

steels / to a global company that creates high-performance 

steel for demanding applications in almost every market. As 

we celebrate our centennial this year, our 2,600 employees, 

like the generations before them, take pride in making the 

cleanest steel in the world. 

Our niche in the steel industry is special bar quality -- or SBQ -- 

steel to serve customers across a wide variety of industries. 

Our customers share two things in common/
	

First, their products endure a high degree of stress and operate 

in harsh conditions. They need consistently high-performing 

steel to be successful. 

And second: our customers are vital to the national security of 

the United States. 
 

 

 

 

 

 

 

	 You find our steel in every kind of military equipment and 

military ordnance. !n example is the work we’ve done 

recently with the U.S. Air Force to improve the strength and 

toughness of its “bunker busting” bombs. We delivered 

higher-performing steel at a lower price, improving the 

effectiveness of weapons in eliminating their targets and 

limiting collateral damage, while also reducing the total 

cost to the American taxpayer. (pause) 

here’s a famous military quote that says “If you find 

yourself in a fair fight, you didn't plan your mission 

properly.” Well, one essential part of that planning is to 

ensure that the military has the best, most modern tools 

possible / and !merican companies like imkenteel are 

delivering the type of innovation that gives the men and 

women of the military an advantage in completing their 

missions and returning home safely. 

APPENDIX F - Page 37 

 We also serve companies across a wide range of industries, 

many of which also have a vital role in preserving and 

enhancing national security. You’ll find our products: 

 a mile under the Gulf of Mexico in an oil string; 

 in millions of vehicle transmissions that move people 

and goods across the roadways of this country; and 

 in the landing gear of tens of thousands of aircraft that 

touch down every day. 
 

 

 

 

 

APPENDIX F - Page 38 

	 Our products are throughout energy, transportation 

and manufacturing and they enable customers to push 

the bounds of what’s possible in their products. Put 

simply, we like the tough stuff / the harder the better. 

Our ability to serve customers who preserve and enhance 

national security is dependent upon the domestic steel 

industry’s continued economic viability. The world has an 

overcapacity of steel and many foreign competitors export 

steel to our shores, depressing pricing and displacing our sales. 

We’re not afraid of fair competition. We have some of the best 

people and assets in the world. Our employees not only can 

compete, but they can out-innovate and out-work any in the 

world / and the work of our engineers sets the global standard 

for special bar quality steel. 

However, three numbers keep me up at night: 

700 million 

425 million 

94 million 

 The world has 700 million metric tons of steel overcapacity. 

 425 million of that is in China alone. 

 Demand in the U.S. is only 94 million. 

Imports are a real issue for the U.S. steel industry, particularly 

when foreign competitors don’t play by the rules. 
 

 

APPENDIX F - Page 39 

!s a company, we’re using every competitive tool we have to 

combat imports. We ask that the Commerce Department 

evaluate the levers it can pull as well. There is no "one size fits 

all" remedy to this issue. With hundreds of steel products 

across multiple countries, the remedy must be flexible enough 

to address the complex nature of the global steel trade. We 

recommend accessing all of the tools in the remedy toolbox, 

including tariffs, quotas, VRAs and more / and in some 

instances, a combination of remedies may be necessary. 

We appreciate your leadership on this issue. All of us at 

TimkenSteel take great pride in our contribution to the 

security of this nation and share your belief that a strong steel 

industry is critical to our national interests. Thank you. 
 

 

 

 

 

 

APPENDIX F - Page 40 

Testimony of Barry Zekelman
 

Executive Chairman and Chief Executive Officer
 

Zekelman Industries
 

Section 232 Investigation on Steel
 

May 24, 2017
 

Thank you very much Secretary Ross. My name is Barry Zekelman and I am the CEO 

and Executive Chairman of Zekelman Industries. I appreciate the opportunity to appear here 

today on behalf of my company and our employees. Zekelman is the largest pipe and tube 

producer in North America. We produce over 2 million tons of tubes annually consuming almost 

2.2 million tons of domestically produced steel. Our millions of miles of tubing provide the 

thread that sews the security blanket that covers our great nation. 

Tubular products are critical to maintaining a strong defense and essential civilian sectors 

of the U.S. economy, and is the backbone of our nation’s infrastructure. In 2008 we produced 

125,000 tons of hollow steel structural tubing used for the border security fence, which protects 

this country and its citizens from illegal border crossings and illicit drug trafficking. We produce 

the fire suppression pipe that is routed through our buildings, schools, hospitals, power plants, 

industrial plants, warehouses, and military bases. We produce the electrical conduit that provides 

safe passage and routing to all of the wiring in all building we see, especially in our data centers, 

mission critical military and space centers, power plants, and transportation systems. We make 

the pipes that carry the water and waste throughout all of our buildings and civil infrastructure. 

Our military bases, airports, transportation systems, and ports all rely on our pipes. We produce 

the oil country tubular goods and line pipe that is vital to the exploration and extraction of oil and 

gas that provide us with energy to run our economic and military machine. Our tube transports 

fuel and gas to planes, trains and automobiles, to houses and buildings for heat, to fuel power 

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generating turbines and to support solar panel and wind turbines to propel clean energy use. Our 

structural tubing is used for the protective posts which you see throughout this city and many 

others for vehicle barriers. It is used for buildings and agricultural equipment to farm our fields 

and feed not only the U.S. population, but the rest of the world. Highway signage, guardrails, 

bridges, electrical distribution towers, cell towers and rail cars are all made with our hollow steel 

structurals. The foundation of One World Trade is set upon our pilings. Our drawn over mandrel 

tubing is used for hydraulic cylinders that makes movement in all machinery possible, including 

mining equipment, construction machinery, transportation, robots and automation. Ask any 

military man if a hydraulic cylinder is critical to their success. There is not one piece of military 

equipment that does not have a tube in it, from gun barrels to rocket launchers to helicopters and 

naval ships, tanks, armored personnel carriers -- the list is infinite. Ask the people of Flint 

Michigan if water pipes are vital to their security and survival! 

In sum, to ask if pipe and tube is vital to our national security is not the right question. 

The question is really how our country could possibly be secure without it. Our economy and 

our military would grind to a screeching halt without a vibrant domestic tube industry. We 

employ tens of thousands of people, providing income levels far superior to the touted minimum 

wage victories. In addition, our industry consumes over 20 million tons of the flat rolled steel 

produced in the United States, the largest single category. So if we go out of business, the steel 

producers are not far behind. Imports have decimated our industry, resulting in the closure of a 

host of pipe and tube mills and throwing thousands out of work. In the first quarter of this year, 

imports in all pipe and tube categories exceeded 60 percent of consumption, with some 

categories reaching 70 percent and higher. It would be the epitome of folly to allow our nation 

to continue to permit imports to grow, putting U.S. producers out of business, and making our 

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APPENDIX F - Page 42 

country vulnerable due to its reliance on foreign producers in China, Korea, Vietnam, Turkey 

and elsewhere. 

My company supports a strong response in the form of a combination of duties and 

quotas. Trade remedy cases have not addressed the problem of unfairly traded imports and 

massive foreign overcapacity. Third country dumping is rampant in our industry and a stronger 

response is essential to ensure the ongoing viability of our industry. We have to break the cycle 

of dependency on imported pipe and tube, and the only way to do that is by limiting imports to a 

smaller share of the U.S. market. If we allow our domestic industry to disappear, we will only 

have only ourselves to blame for placing our country in an extremely vulnerable position. We 

have the best and most efficient steel producers in the world. We should make it here, and put 

America first. 

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APPENDIX F - Page 43 

Statement of Dennis M. Oates
 

Chairman, Specialty Steel Industry of North America
 

(SSINA)
 

Chairman, President and Chief Executive Officer
 

Universal Stainless & Alloy Products, Inc.
 

Public Hearing on
 

Section 232 National Security Investigation
 

Regarding Imports of Steel
 

May 24, 2017
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 44 

Good morning Mr. Secretary and members of the panel. I am Denny Oates, Chairman, 

Specialty Steel Industry of North America (SSINA) and Chairman, President and Chief Executive 

Officer, Universal Stainless & Alloy Products, Inc. 

SSINA is a Washington, DC-based trade association representing virtually all continental 

specialty metals producers, which include high technology, high value stainless and other specialty 

alloy products. 

SSINA membership includes virtually all North American manufacturers of stainless steel 

and nickel based alloys, including superalloys. Other specialty metals such as titanium and 

titanium alloys, zirconium and niobium alloys are also produced by SSINA member companies. 

There can be no doubt that the domestic specialty metals industry is critical to the national 

defense. Attached to my testimony is a report entitled “Specialty Metals and the National 

Defense,” which summarizes the contributions of the specialty metals industry to the national 

defense. Also attached is a press release issued when the report was made public. The report 

proves unequivocally that specialty metals are vitally important to virtually every U.S. military 

platform. Without these specialty metals, the U.S. military and Homeland Security forces would 

not have the ability to fight a war, defend our borders, and protect our citizens from terrorism. The 

press release quotes then-Acting Deputy Under Secretary of Defense Gary A. Powell, who said, 

“There is no question that specialty metals are critical to the national defense, and the U.S. 

specialty metals industry is a very important supplier of these materials to various defense 

contractors. And myriad defense programs would be negatively impacted by specialty metals 

supply disruptions.” Furthermore, Department of Defense studies provide further evidence of the 

critical importance of specialty metals to the national defense. A series of reports entitled, 

“Defense Industrial Base Capabilities Studies” clearly show that applications which contain 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 45 

specialty metals are essential to meeting national defense requirements and are critical components 

of technologies that focus on 21st century warfare. 

A key concern, however, is that the domestic specialty steel industry must be healthy and 

profitable in order to supply the critical defense applications. Simply put, the survival of the 

industry is dependent upon the core commodity products produced by our members. This includes 

basic stainless steel in the form of sheet and strip, plate, bar, rod, ingot and billet. The specialty 

steel industry cannot exist simply by producing materials for defense applications. While it is 

difficult for the specialty metals industry to identify the percentage of our total production which 

goes to specific defense applications because many of our sales go through service centers or 

distributors before reaching end users, a reasonable estimate is 10 percent. If civilian applications 

which play essential supporting roles for defense such as aircraft, highways, power plants, etc. are 

considered the percentage is much larger, perhaps 50 percent. And let me be clear -- the specialty 

steel industry could not abandon manufacturing in the United States and focus on technology 

development. It just does not work that way. Technology development travels with the 

manufacturing process. Our steel mills are laboratories. It would be naive to think that 

manufacturing of these materials could be transferred abroad to countries like China while 

technology development remained in the United States. 

Import competition has taken a serious toll on U.S. producers. In the 1970s there were 

approximately twice as many specialty metals producers in the U.S. as today. We have battled 

unfairly-traded imports for decades. We have filed and won many antidumping and countervailing 

duty (subsidy) cases. The Commerce Department and the U.S. International Trade Commission 

reached affirmative findings in an antidumping case last year against imports of stainless steel 
 

 

 

 

 

 

 

 

APPENDIX F - Page 46 

sheet and strip from China. We constantly monitor developments on other products to determine 

whether additional trade cases should be filed. 

As you are well aware, there is tremendous overcapacity worldwide to make stainless steel. 

China alone has excess production capacity equal to twice the size of the entire U.S. market. And 

it remains to be seen whether China will cooperate with the rest of the world in the Global Steel 

Forum simply to develop a database demonstrating current production capabilities. Global 

overcapacity, endemic dumping and foreign government subsidies all pose direct threats to U.S. 

producers and an associated threat to our ability to provide the critical materials essential to the 

national defense. In conclusion, let me express our sincere appreciation for the efforts of this 

Administration to recognize the threat to our national security and to undertake this investigation 

to determine how to deal with this vital problem. Thank you. 
 

 

APPENDIX F - Page 47 

Statement of Terrence L. Hartford
 

Vice Chairman, Specialty Steel Industry of North America
 

(SSINA)
 

Vice President, ATI Defense
 

Allegheny Technologies Incorporated
 

Public Hearing on
 

Section 232 National Security Investigation
 

Regarding Imports of Steel
 

May 24, 2017
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 48 

Good afternoon, Mr. Secretary, and members of the panel. I am Terry Hartford, Vice 

Chairman, Specialty Steel Industry of North America (SSINA), and Vice President - Defense for 

Allegheny Technologies Incorporated. ATI is a U.S.-based manufacturer of advanced specialty 

materials, including nickel-based alloys, superalloys, titanium alloys, stainless steels and other 

specialty materials, including zirconium, niobium and hafnium alloys. We’ve also made 

significant investments in downstream capabilities to produce specialty components from these 

materials. Many of these alloys have significant defense applications in our most advanced military 

systems. 

ATI is one of the largest and most diverse specialty metals and components manufacturers 

in the world. Our largest markets are in the aerospace and defense sectors, although we also have 

a strong presence in the oil and gas, electrical energy, medical, automotive and other industrial and 

commodity markets. Virtually every major military aerospace system contains an ATI specialty 

steel or alloy. Our materials are also utilized in the production of land-based vehicles; naval 

systems; missiles and rockets; armor and munitions. The applications of these materials are widereaching, and in many instances, these materials are sole-sourced and not substitutable. Let me 

provide a few illustrative examples, beginning with the aerospace sector. 

1. Our vacuum melted nickel alloy sheet, bar and finished forgings and our aerospace 

quality titanium alloys provide the strength and thermal protection that enables our military jet 

engines to operate at the highest temperatures with the necessary strength. The Joint Strike 

Fighter F-135 engines and the F-404 engines of the F/A-18-Hornetare aerospace platforms are 

examples of programs that rely heavily on ATI specialty metals. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 49 

2. Our premium quality titanium for dynamic rotor components and blades on many 

military helicopters, including the Apache, Blackhawk and Chinook programs provide high 

strength and light weight performance that is critical to the operation of these aircraft. 

3. Our Precipitation Hardening stainless steel bars and finished forgings are used for 

landing gears and other aircraft structural components of our military aircraft. 

Moving from aerospace into the realm of ground vehicles, our vacuum melted nickel alloy 

sheets are used for recuperators on the M1-A2 Abrams tank engine, and our titanium alloys are 

used to produce armor for the M1-A2 tank. Several years ago, ATI developed a new titanium 

alloy for armor systems, and this new material is nearing final qualification from the US Army and 

its prime contractors. 

On the sea, our nickel-based alloys are utilized in hull construction to increase the system 

performance, durability and survivability of our naval vessels; while our special alloys for Navy 

submarine and aircraft carriers’ nuclear propulsion systems ensure the corrosion resistance 

necessary in high temperature and salt water environments. Similarly, our duplex stainless steel is 

used for structural components on the Navy’s newest Zumwalt-class destroyer, providing cost 

effective strength and corrosion resistance. 

This is a small sampling of the numerous applications served by ATI specialty steels and 

specialty metals. Many of these applications involve the use of proprietary materials that we have 

developed directly with the Departments of Navy, the Air Force and the Army. These metals are 

high tech in nature and are in a constant state of advancement. They are not “off-the-shelf” items. 

It is their superior performance, often under the most severe operating conditions, that enable our 

defense systems to function at high levels of performance and to do so reliably. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 50 

ATI is committed to the defense market. We are investing heavily in the development of 

new materials to navigate the transition to the next generation of advanced jet engines that will 

power our commercial and military air fleets. These materials will help our engines operate at 

higher temperatures to drive greater performance and improve fuel efficiency. Our efforts, 

however, are not limited to mill products. We are a leader in the production of titanium-based and 

nickel based alloy powders for use in next-generation jet engine forgings, as well as in the 

production powder and wire for 3-D printed components. 

Mr. Secretary. We applaud the Administration’s willingness to study the relationship 

between imports and national security in this investigation. To understand that relationship, 

however, requires an understanding the operations of companies like ATI that are leaders in the 

development of the specialty metals that will power our military into the future. 

ATI grew through investment, technology development and innovation into the diverse 

specialty metals and components producer that it is today. A core business segment, however, is 

stainless steel production. Like most U.S. specialty steel mills, the ability to sell stainless steels 

into the commercial market requires us to be cost competitive to sustain our business. The 

domestic specialty steel industry – including companies like ATI – cannot exist simply by 

producing materials for leading edge defense applications. The production of materials for all 

defense applications, represents, in our case, perhaps 10 percent of total production. The survival 

of this industry, however, is dependent on the viability of all of its businesses, not just its defenserelated production. It is important to realize that the production equipment used to make materials 

for defense applications is the same as the equipment used to produce materials like stainless steel 

for large volume non-defense applications, including infrastructure projects. Many of our 

engineers and metallurgists are also the same. It is the efficiencies of these larger volume, non-
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 51 

defense related businesses that sustain the development and production of leading edge specialty 

metals for defense applications. Thus, the economic welfare of our high volume stainless steel 

operations directly impacts our ability to serve the needs of our military. For this reason, and 

relevant to this investigation, I would like to address the current state of the stainless steel market 

from the perspective of the stainless flat-rolled sector, which accounts for about two-thirds of U.S. 

stainless production. 

For more than 40 years, the stainless steel flat-rolled market has been targeted by imports. 

Nevertheless, the sector has persevered and invested billions in world class technologies to remain 

globally competitive. We have also relied on the trade laws to respond to the challenges from 

illegally traded imports. Most recently, ATI and the other stainless steel-flat-rolled producers were 

forced to confront a Chinese state-owned juggernaut that increased its production of stainless steel 

from 3.8 percent of global production in 2001 to 54.5 percent in 2016. 

China’s production capacity is nearly eight times the size of the U.S. market, and its excess 

capacity alone is more than double the size of the entire U.S. market. These capacity imbalances, 

not surprisingly, translate into an intent, through the use of aggressive pricing, to dominate and 

potentially take over our market. Over the period 2013-2015, imports of stainless sheet and strip 

products from China grew 133.1 percent from 63,114 to 147,143 tons. China’s share of the entire 

U.S. stainless sheet and strip market doubled during that period. The recent import surge from 

China, in fact, created market conditions that forced ATI to close our Midland Pennsylvania 

facility in 2015, with the loss of hundreds of jobs. Through the use of the trade laws, we were able 

over the period 2016-2017 to obtain antidumping and countervailing duty orders against China 

that should restore temporarily some degree of fairness to the market place. The fundamental 

structural problem of overcapacity, however, remains, and Chinese imports have been supplanted 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 52 

by imports from Taiwan and Vietnam, many of which originate from Chinese-produced upstream 

material. 

ATI’s revenues come primarily from commercial markets, complemented by significant 

positions in defense. ATI recently invested $1.2 billion to build the world’s most advanced hotrolling, and processing facility in Brackenridge Pennsylvania. We will be processing some of our 

most sophisticated specialty alloys at that facility, many of which will be the foundation of our 

future military platforms. The new mill, however, to operate profitably and efficiently needs to be 

able to produce stainless steel in commercial volumes. This is true of many of our operations, 

including our Forged Products business. If our commercial markets continue to be victimized by 

unfair imports, we will not be able to operate our mills at a level of profitability and return on 

investment that will permit us to invest in the research and development of the materials so critical 

to our national defense. Many of these materials cannot be produced anywhere else. Indeed, this 

is why the U.S. Department of Defense asked Congress in 1973 to impose a domestic sourcing 

requirement on specialty metals. That requirement is a reason why companies in the specialty 

steel industry, like ATI, have had the ability to develop the specialty alloys that power our military, 

and why the U.S. leads the world in the technology development and production of these materials. 

A domestic sourcing requirement alone, however, will not preserve that US leadership 

position, given the structural problems of excess capacity that plague the specialty steel industry. 

This investigation must recognize the inextricable linkage between our national defense needs and 

the ability of our specialty metals manufacturers to achieve the returns on investment in their 

commercial markets that will support the research and development of the high technology 

materials that are vital to our defense industrial base. This investigation must therefore address 

the fundamental issues of overcapacity and unfair trade that have plagued our commercial markets, 
 

 

 

 

 

 

APPENDIX F - Page 53 

and it must fashion a remedy that will permanently address those issues. The remedy, however, 

cannot undermine the antidumping and countervailing duty orders that have been effective in 

restraining import surges, nor can it weaken the domestic sourcing requirement incorporated in the 

Specialty Metals Amendment, which has ensured that the U.S. has the ability to produce the 

specialty metals from which most of our military platforms are built. We look forward to working 

with the Administration in helping shape that remedy. 
 

 

 

 

 

 

 

 

 

APPENDIX F - Page 54 

Testimony of
 

Lourenco Goncalves - Chairman, President and Chief Executive Officer
 

Cliffs Natural Resources Inc. 

U.S. Department of Commerce - Bureau of Industry and Security 

Notice Request for Public Comments and Public Hearing on Section 232 

National Security Investigation of Imports of Steel
 

May 24, 2017
 

Good morning, Secretary Ross and members of the panel. 

My name is Lourenco Goncalves and I serve as Chairman, 

President and Chief Executive Officer of Cliffs Natural Resources. 

Thank you for the opportunity to speak here today. 

By way of background, Cliffs is the largest supplier of iron ore 

to the steel mills in the United States. We own and operate four of 

the seven active iron ore mines in the country, directly employing 

approximately 3,000 Americans. In stark contrast to the Australian 

iron ore miners BHP, Rio Tinto and Fortescue, which almost entirely 

produce and sell iron ore sinter feed fines to China and other 

countries, Cliffs’ operations in the United States exclusively produce 
 

 

 

APPENDIX F - Page 55 

iron ore pellets. While iron ore fines feed sinter operations that 

contribute immensely to the well-known air pollution problem in 

China, the pellets we sell to our domestic clients make the 

American steel industry one of the most – if not the most 

environmentally friendly in the entire world. Chinese noncompliance with minimal environmental standards is the most 

absurd, unfair and unacceptable advantage the Chinese have in 

exporting their excess steel. 

I will speak today both in my capacity as Cliffs’ Chairman and 

CEO and from decades of experience in the steel industry. Prior to 

joining Cliffs, I served as CEO of two other American companies: 

Metals USA Holdings, a leading national steel service center 

company; and California Steel Industries, the biggest steel supplier 

on the West Coast of the United States. In light of my ten years at 

Metals USA and my active role in the previous cases under 

Sections 201 and 232 back in 2001 when I was at California Steel, I 

would like to confront a very important part of the problem that has 

2 
 

 

 

 

 

 

 

 

APPENDIX F - Page 56 

never been properly addressed. That problem is the role played by 

some domestic service centers and steel buyers as enablers of the 

entire steel import crisis, by providing a home within the United 

States for illegal steel imports. 

Dumped steel products do not find their way to this country 

spontaneously, nor do these imports swim to U.S. shores. Every 

steel product that enters this country is brought here because a 

steel trader, distributor, service center or end user will buy – or 

already bought - that steel. Some steel buyers, traders and service 

centers, by design, acquire dumped and illegally subsidized steel 

and, in many cases, intentionally circumvent duties and tariffs 

assigned to steel products. 

These bad players know exactly what they are doing, but they 

do it anyway, because they feel they are beyond reach. As 

evidence, emails sent from traders to steel buyers in the U.S., 

offering to navigate around duties applied to steel from China and 

3 
 

APPENDIX F - Page 57 

South Korea, have been submitted along with the written version of 

my remarks. 

Let me be clear: any American company or individual who is 

complicit in such a scheme must be held accountable. These 

steel buyers are no different than recipients of stolen goods after a 

robbery. While these recipients did not directly perpetrate the initial 

crime, it is nonetheless an offense to, knowingly, acquire stolen 

goods. Their only real concern is not to be caught; they do not care 

that artificially cheap products negatively affect the health of the 

domestic iron and steel industry and, by extension, the military 

readiness of the United States. 

While not all service centers and steel buyers act as domestic 

enablers of illegal trade, the ones providing dumped and 

circumvented steel products a destination within the United States 

must be punished. Any real solution to our imported steel 

problem must include a commitment by the federal government to 

4 
 

 

 

 

 

APPENDIX F - Page 58 

directly confront the American companies and individuals that 

facilitate the trade of illegal steel imports by ensuring that these 

products find a home in the United States. 

In closing, I would like to remind the panelists that the worst 

enemy is the one that pretends to be a friend. Some of these 

perpetrators use a speech very similar to ours, despite their actions. 

If any of these individuals do have the courage to show up today, 

please ask them if importing illegal steel is part of their business 

model and, if so, why they break the law. I am sure they will not 

accept accountability because their illegal short-term profits are 

more important to them than the military readiness of the United 

States. 

Thank you once again for the opportunity to speak today. I 

would be happy to answer any questions you may have. 

5 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 59 

Testimony of John Adams, Brigadier General, U.S. Army (Retired)

President, Guardian Six LLC
 

Hearing Regarding Section 232 National Security Investigation of Imports of Steel

May 24, 2017
 

Thank you for the opportunity to share my views on the effects on the national security of 

imports of steel. 

I applaud the administration’s initiation of this Section 232 national security investigation of this 

issue. As a thirty-year veteran of the U.S. Army, with a background in strategy and intelligence, 

and as a lead author of the 2013 study of the U.S. defense industrial base, Remaking American 

Security, my experience and research convince me that imports of cheap and subsidized steel 

from our strategic competitors put our national security at risk by eroding the U.S. steel 

industry’s position as a fundamental building block of our national security infrastructure. I 

therefore advocate concerted action at all levels of government to preserve a strong domestic 

steel industry. 

Our nation’s security rests on a military equipped with the technology, weapons systems, and 

platforms needed to protect our nation supplemented with logistical and critical infrastructure. 

Despite technological advances in materials, notably composites and ceramics, steel remains 

irreplaceable to the U.S. military. From nuclear-powered submarines to aircraft carriers, and 

from main battle tanks to mine-resistant vehicles, steel shields our nation and the lives of our 

warriors. A healthy domestic steel sector – including the many small and specialty 

manufacturers that depend on steel – is critical to sustaining the quantity and quality of 

capabilities needed to preserve our national security. 

The glut of low-priced steel in the world market, resulting in large part from China’s and other 

potentially hostile trading partners’ actions, undermines the ability of American-made steel to 

fairly compete in the marketplace. Left unchecked, the current steel market situation will 

continue to result in plant closures, mass layoffs, and the loss of key technology and 

manufacturing know-how. In this insecure world, the need to build more defense platforms in a 

hurry may very well come sooner than we would like. As China expands its global presence, a 

situation in which China exercises market control over global steel is all-the-more alarming. 

There is more to this issue than “lowest cost is best.” While low prices for steel can reduce 

defense acquisition costs, irreparable damage to our domestic steel industry and loss of our 

steelmaking capacity will increase defense industrial base dependency on China and other 

potentially hostile foreign governments. 

It is a myth that steel will always be available for U.S. defense requirements. Domestic 

steelmakers’ health depends on the health of their commercial sectors. Conversely, the overall 

health of domestic steelmakers is not contingent on defense production. If the commercial 

market is severely disrupted or unprofitable, the defense production sector cannot survive. 

Reliance on foreign sources of steel, especially from strategic competitors, results in uncertain 

supply for critical national requirements, especially in a crisis. In 2004, on temporary duty in 

Iraq, I witnessed our warriors apply jury-rigged armor plates – often sent by their families – to 

their vehicles to protect against IEDs. When DoD asked foreign suppliers to “uparmor” American 

vehicles, they put our requirements in their months’ long queue for orders. Only American steel 

companies – subject to “rated orders” scheduled in weeks rather than months – supplied armor 

plate for the uparmored vehicles that protected our warriors from IEDs. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 60 

We must take urgent action to address these risks. 

- Take aggressive action to safeguard America’s economic and national security by 

recommending remedies to the President that will yield a meaningful opportunity for U.S. 

producers to recapture lost market share and rebuild broken supply chains. 

- Take a broad view of steel products that are necessary for our national security. While 

the first products that come to mind are ships and tanks, we must also consider and 

include steel used to construct America’s logistical and critical infrastructure – everything 

from our electrical grid and transformers to rail networks and underground water 

systems. A strong and readily-available supply of iron and steel products is vital to 

America’s economic and national security. 

- Focus on the entire supply chain, including everything from iron to semi-finished steel 

products in your recommendations to the President. According to SteelOnTheNet.com, a 

semi-finished steel slab constitutes roughly 90 percent of the cost of a finished hot-rolled 

steel product. Thus, allowing for the importation of foreign slabs, despite a 232 

safeguard remedy, could undermine the goal of stabilizing and protecting steel 

production that is vital to our national security. The same goes for upstream raw 

materials production of iron. We must ensure that the entire supply chain of iron and 

steelmaking in the United States benefits from actions arising from this investigation. 

- We must establish verifiable and enforceable mechanisms for the elimination of global 

overcapacity in the steel sector, and implement rules to counter anti-competitive 

behavior of state-owned entities, especially in China. 

- We must proactively apply our trade enforcement laws to provide relief from market 

distortions before plants are forced to close and capacity is irreparably lost. 

- We must rigorously apply domestic sourcing policies in government procurement of 

steel. 

Our goal is to maximize domestic capabilities combined with supplies from unquestionably 

reliable third parties. The one supplier in whom I have complete confidence is Canada. Not only 

do we currently have a steel surplus with Canada, but we share a border and have synergistic 

strategic, economic, and national security interests. However, treating Canada as a unique 

partner under any Section 232 relief measures requires that Canada also strengthen and align 

its trade enforcement efforts with ours. Circumvention and evasion of U.S. trade laws and 

actions through Canada is unacceptable. 

Again, I applaud the administration’s initiation of this Section 232 investigation of the effects of 

imports of steel from a national security perspective, and as indicated, to recommend actions to 

adjust steel imports so that they will not put our national security at risk. We need concerted 

action to address the risks to our domestic steelmaking capacity before we lose it, especially to 

our most dangerous long-term strategic competitors, and to ensure that the U.S. steel industry 

remains a strong and ready foundation of our national security. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DRAFT – 5/22/2017
 

APPENDIX F - Page 61 

Section 232 National Security Investigation of Steel Imports
 

Testimony of John Stupp
 

May 24, 2017
 

Good morning. I am John Stupp, President and Chief Executive Officer of 

Stupp Bros. and Chief Executive Officer of Stupp Corporation, our steel pipe 

manufacturing division. I am also a representative of the American Line Pipe 

Producers Association or ALPPA. I would like to thank you for this opportunity to 

testify today and explain how imports of large diameter line pipe threaten U.S. 

national security. 

Stupp was founded in 1856 and has been supplying products to the U.S. 

military since the Civil War. Back then, it was iron classing for the monitor class 

vessels that helped secure the lower Mississippi. During World War I, Stupp 

provided fabricated steel sections for maritime vessels and during World War II, 

Stupp built Bailey bridges, a portable, pre-fabricated, truss bridge that was used 

extensively by the military during the war. We also began making bomb bodies for 

the 500, 1000 and 2000 pound bombs used by the Air Force and Navy in the early 

1970s and continue to manufacture those bomb bodies today. 

Stupp’s involvement in pipeline manufacturing dates back to the 1940s, 

when it began providing financing and project management for the 898-mile 

Michigan-Wisconsin Pipeline. In 1952, Stupp started manufacturing pipe in Baton 

Rouge, Louisiana and added an integrated coating plant to its operations in 2004. 

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DRAFT – 5/22/2017
 

APPENDIX F - Page 62 

In 2009, Stupp added a second pipe manufacturing facility to its campus. Stupp is 

strongly committed to producing the highest quality line pipe in the United States 

and has been for decades. 

Stupp, together with American Steel Pipe, Berg Pipe, and Dura-Bond, make 

up the ALPPA, a domestic coalition of large diameter line pipe manufacturers. 

Together, we account for the vast majority of large diameter line pipe domestic 

production. ALPPA’s members produce line pipe for a number of U.S. national 

security applications, including for oil, gas, chemical, water, sewage, and slurry 

pipelines, all of which are critical U.S. infrastructure. ALPPA’s members also 

produce specific products for the U.S. military, including steel bridges and 

munitions. We are proud to produce steel products that protect our citizens and 

infrastructure. However, unprecedented global steel overcapacity and the resultant 

surge in steel imports into the U.S. market are threatening our ability to continue 

doing so. That is why I am here today. 

This Section 232 investigation comes at a pivotal time. As you are likely 

aware, the domestic steel industry is suffering from chronic overcapacity and a 

growing import crisis, both of which have been largely driven by governmentsponsored capacity expansions. Over the past several years, governments in China, 

Korea, Turkey, and elsewhere have provided their producers with massive 

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DRAFT – 5/22/2017
 

APPENDIX F - Page 63 

subsidies to expand capacity and production far in excess of demand, which has 

resulted in a severe supply glut. 

Estimates place current global excess capacity at more than 700 million 

metric tons. This figure is staggering and represents a sharp increase from the 

roughly 500 million tons of global excess steel capacity recorded in 2014. While 

China accounts for the bulk of this excess capacity, there is also significant 

overcapacity in Korea, Turkey, Japan, and other countries. 

In the United States, the effects of the global excess steel capacity crisis are 

being felt most acutely in the form of record steel imports. The domestic large 

diameter line pipe industry has experienced this firsthand. Despite Korean welded 

line pipe being under order and a sizeable drop in U.S. demand in 2016, Korean 

producers have continued to ship substantial volumes of large diameter line pipe to 

the United States and now capture roughly 20 percent of the U.S. market, more 

than any other import source. Japanese volumes almost doubled between 2014 and 

2016. Turkish and Greek volumes of large diameter line pipe increased by 267 

percent and 991 percent, respectively, between 2014 and 2015, and remained 

significant in 2016, despite weakened U.S. demand. 

These elevated import levels have resulted in dramatic declines in the 

domestic large diameter line pipe industry’s capacity, production, revenue, 

investment, and employment. In 2015, which was a peak demand year, the 

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DRAFT – 5/22/2017
 

APPENDIX F - Page 64 

domestic industry was operating at a capacity utilization rate of only 37 percent. 

Since then, conditions have worsened. The industry is now operating at a capacity 

utilization rate of well under 30 percent – the lowest that it has been in years. 

While some large diameter pipe operations have been forced to shut down in 

response to the import surge, including U.S. Steel Tubular Products’ McKeesport

pipe mill, others have been idled. Just last May, American Pipe idled one of its 

two mills and reduced its workforce to one shift because of the import surge. Berg 

Pipe has also suffered a dramatic reduction in workforce – from 660 employees in 

2015 to roughly 415 today – for this same reason. 

The U.S. national security implications of the domestic industry’s current 

state are significant. The industry is gradually losing the ability to produce large 

diameter line pipe to equip the U.S. military, respond to disasters, and modernize 

increasingly aging infrastructure. ALPPA’s members supply a variety of different

line pipe for critical oil, gas, and other pipeline projects throughout the United 

States as well as steel munitions, bridges, and other products for the U.S. military. 

However, we cannot keep producing these products if the import crisis continues. 

The industry’s ability to develop new steel products to meet evolving 

national security needs is also in jeopardy. ALPPA’s members have made 

significant investments in recent years to produce the highest performance 

pipelines for the most demanding U.S. military and critical infrastructure 

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APPENDIX F - Page 65 

applications. Stupp added a second mill to its operations in 2009, American Pipe 

invested $80 million in a new facility to increase its capacity in 2012, Berg made 

significant upgrades to its technology in 2013, and Dura-Bond purchased the 

former McKeesport pipe mill in 2016. Such investments are necessary to keep our 

industry strong and healthy. 

Yet, as President Trump recently acknowledged, if the present situation 

persists, “it may place the American steel industry at risk by undermining the 

ability of American steel producers to continue investment and research and 

development, and by reducing or eliminating the jobs needed to maintain a pool 

of skilled workers essential for the continued development of advanced steel 

manufacturing.” The domestic large diameter line pipe industry could not agree 

with the President more. 

For these reasons, the ALPPA and its workers ask that Commerce find that 

steel imports are threatening U.S. national security and grant much needed trade 

relief to domestic large diameter line pipe producers and the rest of the steel 

industry. A failure to grant broad relief to the steel industry will result in further 

harm to U.S. producers and workers, and continue to place our national security at 

risk. The ALPPA will talk more about remedy in our written submission, but 

strongly believes that there is a need for import tariffs covering the large diameter 

line pipe industry. 

5
 
 

 

APPENDIX F - Page 66 

DRAFT – 5/22/2017
 

Thank you for your time and attention on this critical issue.
 

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APPENDIX F - Page 67 

Oral Presentation of Ryan Chadwick, VP and General Counsel of TMK IPSCO
�

Public Hearing on Section 232 National Security Investigation of Imports of Steel
�

May 24, 2017
�

Good morning Secretary Ross and distinguished members of the panel. Thank you for the opportunity to 

speak at this hearing. 

My name is Ryan Chadwick and I am the Vice President and General Counsel of TMK IPSCO, one of the 

largest manufacturers of steel pipe for the energy industry in the United States. Our energy related products 

include OCTG and line pipe up to 16”. TMK IPSCO also manufacturers standard pipe, industrial pipe, and 

structural steel products. TMK IPSCO has 1.6 million tons of annual steel pipe manufacturing capacity at 

our facilities in Pennsylvania, Kentucky, Ohio, Arkansas, Iowa, Oklahoma, Nebraska, and 

Texas. Approximately 75% of our pipe production capacity is for welded pipe; the remainder is for seamless 

pipe. TMK IPSCO currently employs 1,370 employees at these facilities and at its headquarters and R&D 

facility in Houston, Texas. At full capacity utilization, TMK IPSCO would employ over 2,600 individuals in 

the United States. 

According to the US Energy Information Administration, net imports of petroleum products account for 

25% of US consumption of petroleum and US natural gas production is equal to about 99% of US natural gas 

consumption. Our country has made great strides on the path to energy independence. Dependence on 

imports of steel pipe to support this critical energy infrastructure, however, leaves our country less able to 

independently provide for its energy needs and less secure. 

Our pipeline infrastructure is aging, with much of it installed prior to 1970. We must have a secure supply of 

steel pipe to repair and maintain this pipeline infrastructure. 

Over one third of electricity generation in the United States is powered with natural gas, increasing the need 

to assure the security of steel pipe supplies to support the transmission of natural gas to these generation 

facilities. 

Total steel pipe production in the United States is approximately 10% of total steel production in the United 

States by tonnage. A healthy domestic steel pipe industry helps insure a healthy domestic steel industry. 

After final AD and CVD duties were implemented in 2010 against Chinese steel and steel pipe, Chinese steel 

overcapacity was redirected to other countries, such as South Korea. After 2010, we saw a steady increase in 

imported steel pipe manufactured by foreign companies able to take advantage of reduced steel prices caused 

by steel overproduction at unprofitable Chinese companies. By 2013, producing welded OCTG and line pipe 

became unprofitable for TMK IPSCO and other domestic producers. 

The gap between US and Chinese steel coil prices expanded to as much as $340/ton last year and is $266/ton 

as of May 11 of this year. The Chinese steel coil prices warp the world steel market outside the US, lowering 

prices to well below the US coil price. It is very difficult and often impossible to compete with foreign steel 

pipe producers that have such an advantage in lower input costs. In some instances, foreign steel pipe has 

been priced close to the prices for domestic steel coil used in the production of US steel pipe. If the status 

quo is maintained, many of the steel pipe production facilities in the United States, particularly for welded 

pipe, will remain or become money-losing operations. 

If the Administration takes action on imported steel under Section 232 and does not take action on imported 

steel pipe, the resulting influx of cheap steel pipe imports is likely to drive many domestic producers out of 

business because there will, at the same time, be a significant increase in US steel coil prices for domestic steel 

pipe producers. 
 

 

 

 

 

 

 

 

 

APPENDIX F - Page 68 

In 2012, TMK IPSCO spent close to $100 million on capital projects to improve its manufacturing facilities 

in the United States. In 2013 and 2014, TMK IPSCO reduced its capital spending to approximately $40 

million annually as it responded to difficult market conditions created by low-priced imported pipe. In 2015 

and 2016, TMK IPSCO reduced capital spending to $19 million and $6 million as it idled its welded pipe 

facilities in response to low-priced imported pipe and the downturn in the oil and gas industry. In all, TMK 

IPSCO has invested half of a billion dollars in its US operations since 2008. TMK IPSCO has also spent 

approximately $10 million annually on research and development on improved metallurgies and advanced 

connection technologies that make the types of oil and gas well drilling that now occur in the United States 

possible. TMK IPSCO would like to return to a full workforce, return to spending on capital projects that 

allow it to compete in a fair marketplace, and maintain its R&D programs. 

Both TMK IPSCO and a strong consensus of the US steel pipe industry at the CPTI annual meeting last 

week in Washington, D.C. agree that quotas, rather than tariffs, would be a better choice for relief under 

Section 232. These quotas should be based on 2010 and 2011 levels, a period between relief from massive 

Chinese imports and the onslaught of imports from many other countries. 
 

 

 

 

 

 

 

 

 

APPENDIX F - Page 69 

Position of the Ministry of Commerce of China: 

U.S. Section 232 Investigation on Imported Steel 

Testimony Before the U.S. Bureau of Industry and Security 

May 24, 2017 

Gu Yu, First Secretary
	

Embassy of the People’s Republic of China
	

in the United States 

Good morning. My name is Gu Yu, and I am First Secretary at the Embassy of 

the People’s Republic of China here in Washington. I welcome the opportunity to 

present the position of the Ministry of Commerce of China in this investigation on the 

effects, if any, of steel imports on the national security of the United States. 

The Ministry of Commerce believes there is no evidence that steel imports 

threaten to impair U.S. national security. United States defense requirements are 

plainly not dependent on imports of foreign-made steel. Nor does imported steel 

fundamentally threaten the ability of domestic producers to satisfy national security 

requirements, or threaten the security and welfare of industries that are critical to the 

minimum operations of the economy and government. Simply put, United States 

national defense and other critical sectors’ need for steel can be, and are, readily 

satisfied by U.S. domestic production. 

First, your agency, as well as the U.S. Department of Defense, have previously 

determined that U.S. national defense requirements for finished steel are very low. 

Recent statistics of the American Iron and Steel Institute show that just 3% of total 

U.S. domestic steel shipments go to national defense and homeland security. Clearly, 

1 
 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 70 

current and projected U.S. national defense demand for steel can be readily satisfied 

by domestic production. Moreover, the U.S. Department of Defense has 

long-established domestic procurement requirements that apply to all steel used in 

critical national security systems. None of these systems are dependent upon foreign 

steel. Annual reports of U.S. domestic steel producers show that they cover the steel 

supply for national defense and national security applications, and the capacity and 

shipments of steel of these companies far exceed U.S. national defense and security 

requirements. Thus, steel produced domestically in the United States remains in 

abundant supply relative to U.S. national defense requirements. 

Second, the United States imports its steel from a diverse array of more than 100 

countries and territories. Steel pipe and tube imports, for example, are sourced from 

more than 50 different countries. The United States is not dependent on steel 

imports from any particular source country. The portion of imports from each 

individual country is relatively low compared to total imports. Canada, for example, 

the largest source of imported steel, accounts for only 17% of steel imports. And the 

vast majority of U.S. steel imports -- nearly 70 percent -- are from close U.S. allies. 

The top five suppliers are Canada, Brazil, South Korea, Mexico and Turkey. 

Furthermore, U.S. reliance on imported steel is declining. Your Commerce 

Department found that steel imports have declined by more than 25 percent since 

2014. 

2 
 

 

 

 

 

 

 

APPENDIX F - Page 71 

Third, the U.S. steel industry is healthy and has the capacity to produce the steel 

needed to satisfy the country’s national security requirements. In particular, U.S. 

producers have state-of-the-art technology to produce high-end, high-value steel 

products, and they maintain steady and competitive exports of such products in global 

markets. The top domestic U.S. steel producers are actively making significant new 

investments, both domestically and abroad, that increase the efficiency of their 

domestic output and enhance their global strength and competitiveness. These 

investments are reflected in relatively stable levels of U.S.-based steel workers, as 

well as in the overall expansion of employment by U.S. steel producers in their global 

operations. Furthermore, given current capacity utilization rates around 70%, the 

U.S. steel industry has significant expansion potential to continue providing ample 

supply for national security needs. 

The U.S. government already provides domestic producers with adequate trade 

protections. Over the last 40 years the U.S. initiated more than 200 trade remedy 

investigations on imported steel products. U.S. steel producers are currently the 

beneficiaries of more than 150 separate antidumping and countervailing duty orders 

that your Commerce Department enforces on imported steel products from over 25 

countries. These orders provide the U.S. industry with full protection from imports 

of steel, as well as generate revenue for the U.S. Treasury due to high rates of duties. 

Fourth, the volume of imports of steel from China has significantly declined in 

recent periods and represent a very minimal portion of U.S. steel imports. Steel 

3 
 

 

 

 

 

 

 

 

 

APPENDIX F - Page 72 

imports from China, which are primarily low-end products sold to distributors and 

processing centers, are down 67.4 percent since September 2015. Chinese steel 

imports plainly do not impact U.S. national security. 

Finally, in light of the lack of a unified definition of “national security” within the 

WTO framework, such action may trigger other Members to invoke similar national 

security interests to protect their own allegedly critical industries from imports, which 

would create unnecessary and harmful barriers to trade. At the same time, any steel 

import restrictions imposed as a result of this investigation will do nothing to enhance 

U.S. national security, but would only harm downstream U.S. manufacturers and the 

broader domestic economy. We hope that the United States will carefully assess the 

impact of this section 232 investigation and play a positive role in the global order of 

international trade. 

The Ministry of Commerce plans to file a written submission further elaborating 

and documenting these points by May 31, 2017. Thank you for the opportunity to 

share these views with you today. 

4 
TRADE REPRESENTAflON 

OF Tfl.E RUSSIAN FEDERATION 

TOP. I 'OBOEJ!PE).l(.'TABl1TEJlbC'l.'BO 

POCCl1l1CKOVf <l:>E,I\EPAL(l1l1 

IN THE UNITED STATES OF AMERICA 8 COE,I\l1HEHHbiX lilT A TAX AMEPl1KI1 

Tel.: +I (202) 232-5988 

Submitted Electronically 

Mr. Brad Botwin 

Director for Industrial Studies 

Office of Technology Evaluation 

Bureau of Industry and Security 

U.S. Department of Commerce 

2001, CONNECTICUT AVE., NW., 

WASUINGTON, DC 20008, 

USA 

www.rustradeusa.org 

E-mail: dc@rustradcusa.org Fax: +I (202) 232-2917 

Our ref. TNtJq-IY!-orj fill( 

May 22,2017 

Section 232 National Security 

Investigation on Steel 

PUBLIC DOCUMENT 

14th Street and Constitution Ave., N.W. 

Washington, D.C. 20230 

Re: Section 232 National Security Investigation on Steel; Confirmation of Participation at 

Public Hearing and Copy of Testimony 

Dear Mr.Botwin: 

We hereby confirm a participation of Alexander Zhmykhov, Deputy Head of Economic 

Section, Trade Representation of the Russian Federation in the USA at the hearing on the abovereferenced investigation on May 24, 2017. 

Please, find attached a copy of a planned testimony. 

Respectfully submitted, 

Encl.: 2 pages. 

Aleksander Y. Stadnik 

Trade Representative of 

Russian Federation in the USA. 

APPENDIX F - Page 73 
Summary of Hearing Statement of 

the Trade Representation of the Russian Federation on behalf of 

the Ministry of Economic Development of the Russian Federation 

before the Office of Technology Evaluation, 

Bureau of Industry and Security 

at a public hearing on Section 232 N a tiona! Security 

Investigation on Steel 

on May 24,2017 

Thank you for the opportunity to speak today on behalf of the Ministry of Economic 

Development of the Russian Federation. 

Currently, exports of a broad range of steel products from Russia to the United States are 

subject to substantial limitations imposed by an Agreement Suspending the Antidumping 

Investigation on Cut-To-Length Carbon Steel Plate', and by antidumping duties against hot-rolled 

flat-rolled carbon-quality steeJ2. 

These two remedies have had the effect of disciplining imports of steel products from Russia 

to such an extent that Russian imports must be excluded from any remedy recommendation in the 

current investigation. A contrary result would unfairly subject imports of Russian steel to duplicative 

and severe limitations. 

Regarding cut-to-length carbon steel plates, in accordance with the Plate Suspension 

Agreement that was put in effect in 2003, each signatory Russian producer/exporter agrees not to sell 

its merchandise subject to this Agreement to any unaffiliated purchaser in the US at prices that are 

less than the normal values of the merchandise, as determined by the Department on the basis of 

information submitted to the Department. 

There IS only one Russian producer who provides necessary information 

to the Department and has the possibility to sell subject goods into the USA. The quantities 

of shipments of the product from Russia to the USA plummeted by more than 25 times: from 252 

thousand tons in 1996 to 10 thousand tons in 2016. The Department issues the normal values, which 

exclude the risk of unfair trade practices by Russian import. 

1 See Suspension of Antidumping Duty Investigation: Certain Cut-to-Length Carbon Steel Plate From the Russian Federation, 68 

FR 3859 (January 27, 2003). Plate Suspension Agreement is attached hereto as Exhibit I. 

2 See Termination of the Suspension Agreement on Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From the Russian 

Federation, Rescission of2013-20I4 Administrative Review, and Issuance of Antidumping Duty Order, 79 FR 77455 (December 

24, 2014). 

APPENDIX F - Page 74 
2 

The U.S. market of hot-rolled coils and sheets has been closed for the Russian exporters due 

to the prohibited level of antidumping duties up to 184.56% since the end of 2014. Prior to that there 

was the suspension agreement in force. Russian producers treated that agreement with duly respect 

although it was designed for non-market economy country in 1999. 

Also, in September, 2016 (less than 3 quarters ago) the Department finished the antidumping 

and countervailing investigations against certain cold-rolled steel flat products with no measures for 

Russian-originated products due to negligible amount of import, proving that import of these goods 

from Russia did not cause any injury to the US industry3• 

In light of the array of limitations that already exist and have already severely reduced the 

volume of imports of Russian flat-rolled carbon steel products into the United States, 

we urge the Department to use great caution in the course of the current investigation, in order to 

ensure that Russian merchandise is not subject to excessive, redundant and conflicting restrictions. 

The statute directs the President to provide relief "only to the extent the cumulative impact of 

such action does not exceed the amount necessary to prevent or remedy the serious injury. "4 In the 

current case, however, the Russian imports have already been so drastically limited by the measures 

in force that further limitations would be excessive in terms of the "amount necessary to prevent or 

remedy" the injury found by the Department. It would be unfair, therefore, for the Department to 

recommend a remedy to the President that is not necessary to fulfill the statutory standard for the 

imposition of relief. 

For the reasons outlined above, we respectfully reiterate that there is no need for the 

imposition of additional import restraints on steel products from Russia. Additional remedies under 

Section 232 would unfairly impose redundant and potentially conflicting remedies on imports from 

Russia. 

We respectfully ask the Department to abstain from recommending any additional remedies 

on imports of steel from Russia. 

3 See Cold-Rolled Steel Flat Products From Brazil, India, Korea, Russia, and the United Kingdom; Determinations, 81 FR 63806 

(September 16, 2016). 4 19 u.s. c.§ 2253(e)(2). 

APPENDIX F - Page 75 
 

 

APPENDIX F - Page 76 

May 22, 2017 

Total No. of Pages: 5 

Trade Expansion Act of 1962 

§232 National Security Investigation 

Bureau of Industry and Security 

U.S. Department of Commerce 

PUBLIC DOCUMENT 

BY EMAIL 

Brad Botwin, Director 

Industrial Studies, Office of Technology Evaluation 

Bureau of Industry and Security 

U.S. Department of Commerce 

Room 1093 

1401 Constitution Avenue, NW 

Washington, DC 20230 

Re: Public Hearing on Section 232 National Security Investigation of Imports of Steel 

Dear Director Botwin, 

I plan to appear on behalf of EUROFER at the May 24, 2017 public hearing on the United 

States’ Section 232 National Security Investigation of Imports of Steel. A copy of my planned 

testimony is attached. Thank you for the opportunity to participate in the hearing. 

Please do not hesitate to contact me if you have any questions. 

Sincerely, 

Karl Tachelet 

EUROFER 

Director, International Affairs 
APPENDIX F - Page 77 

Public Hearing on Section 232 National Security Investigation of Imports of Steel: 

Written Statement of Karl Tachelet on behalf of EUROFER 

(May 24, 2017) 

Director Botwin and members of the Panel, thank you for inviting me to participate in this 

hearing. My name is Karl Tachelet. I am the Director of International Affairs for EUROFER. I 

have worked in the European steel industry for over 20 years. EUROFER represents 100 percent 

of steel production in the EU. Our members are steel companies and national steel federations. 

We are longstanding, reliable suppliers of steel to the United States. Many of our members have 

steel plants in the United States. 

EUROFER shares the US government’s concerns regarding excess steel production, unfair 

trading practices, and global steel overcapacity. We have worked with EU officials to address 

the injurious effects of these problems through the enforcement of our trade remedy laws and 

their root causes through international negotiations in fora like the OECD and the G-20 (Global 

Forum on Steel Excess Capacity). Continued joint efforts between the EU, the US, and other 

like-minded governments are the only effective avenue to address these problems and secure 

balance in the global and US steel markets. 

We do not believe that restrictive actions based on national security will allow for the lasting 

solution the market needs. However, if the US pursues this investigation, EUROFER believes 

the Bureau’s analysis of national security must be narrowly tailored to focus on direct threats to 

national security. 

First, the analysis should be focused on specific steel products needed for specific uses directly 

tied to national security, in particular defense applications. As a rule, commercial and national 
APPENDIX F - Page 78 

interests do not rise to the level of security interests. For example, the following products clearly 

do not affect national security: 

•	 Rebar and heavy sections used in construction; 

•	 Wire rod used to make tire cord, springs, and fasteners for autos; 

•	 Wide flange beams and channels used in construction; 

•	 Hot-rolled wide strip used in construction and autos; 

•	 Cold-rolled sheet used to make household appliances and auto components; 

•	 Metallic and organic coated sheet used in household appliances, building materials, autos, 

and for deep drawing and stamping; and 

•	 Tin mill products used to make cans for food and beverages. 

The Bureau must therefore focus its analysis only on steel products that have a strong, direct 

national security nexus. In this regard, we note that many of the subsectors identified by the 

Department of Homeland Security as “critical infrastructure applications” have little or no 

relevance to national security and should be removed from the analysis. 

Second, for each steel product with a strong, direct national-security nexus, the Bureau should 

determine whether US producers have sufficient capacity to meet the needs of the Defense 

Department and critical infrastructure applications. 

Third, the Bureau should account for factors arguing against import adjustment. In particular, 

the Bureau should consider whether adequate complementary imports are available from US 

allies like the EU. If so, no action should be taken. Furthermore, any remedy proposed to adjust 

2 
APPENDIX F - Page 79 

imports should differentiate based on the threat posed to US national security by specific foreign 

steel suppliers. 

Not all foreign sources of steel are the same with respect to national security. The US and EU 

share a long history of collaboration on national security issues. Indeed, 22 EU Members are 

members of the North Atlantic Treaty Organization (NATO) and are committed to defend US 

security, including by providing assistance in times of crisis. Additionally, there are dozens of 

bilateral agreements between the US and individual EU Members covering matters such as 

defense cooperation and weapons production, and many EU Members are parties to reciprocal 

defense procurement memoranda of understanding with the US under which each country agrees 

to remove barriers to purchases of supplies and services of the other country. 

Furthermore, EUROFER members are longstanding, reliable suppliers of high-quality steels that 

are needed to maintain US national security. Indeed, many of our members have invested in US 

plants to make steel products and employ American workers. Thus, EUROFER companies have 

a manifest interest in a strong, prosperous, and secure United States. 

If the Bureau does not have adequate information to perform this type of rigorous analysis, it 

should issue questionnaires to US users in defense and critical infrastructure applications, US 

producers of steel, and foreign producers of steel. The lack of detailed data regarding the 

consumption of specific steels by these industries or US producers’ capacity to make the specific 

steels is not a valid basis for conducting an overly broad analysis or imposing overly broad 

measures. We note that the US International Trade Commission regularly solicits data of this 

sort in trade remedy investigations, and the Bureau should do so here. 

3 
APPENDIX F - Page 80 

EUROFER is available to contribute to the establishment of such an analytical framework, and 

to provide data, to ensure that the Bureau produces a focused analysis and recommendations that 

address national security concerns. 

Thank you. 

4 
SectiOn 232 National Securilty lnVestigation

oflmports of Steel

● UkrainelbelieveSJhatthereiSJoamplegroundtoittNlliStatc8

any l■cas■lres、 under‐ Sectton 232 agaittst ilnports o」

● The Ul■ited StateS and Ukraine have l■ ahttined a close diploltladC田 J Security

rel威101■Ship sincc_Ukraine“ gai蘇〕d itS independence in l,991.

O Ukrame htt closely coOperated W呻 血C Uniぉ d StateS On nuClett non‐

prollおratiOn issues,inCludi,ng giVing up its lluclett Weapons.

°

酬 翼柵 ピ癬 脚酬 榔 製

and fll■ancing.

o Ukrainiall military offloerS attこ nd U.S`l■lilitary sch6ols to receiVe vital

tr五五ing,instucJ,On,alld prO・ Fessional deVelo,ment` ‐

。 n・ail・e has COntributed a larse nttbeF OftrOops to lraq to support united

stttこs effott there.From 2003‐ 2005,uCaine llad■e foWh largest

‐ number of fOreitt trooPS in lraq,aner the umted SttteS,Untted

Kingdom,and Poland. °

盤職灘茸鰹l霧彗彗難翌∫∫ 躍∞触d

c and Luhansk regiorls,SinCe 2014

slightly‐ Ov鉗 7%6ftl■e ttrFitOW OfU鳳 盛ne tempo露五ly remaliS 6ut ofCb鰍r010f

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securlty ieldS iS Clearly itt tl■ e mutualintereSt Ofbotl■ ofOur na」ol■ s.

The united states is not a major expo{ market fbr lJlrrainian steel" Ukraine

steel producers ;#t*tp;ll fo*,iua on regional rnarkets in Eastern Europe'

the Mid.dle East;iN"rti, nfri"u."L"p"ttl -Jffl"a 

to the United States barelv

;"k; i-9- tr^rr export destinations in 20t6' U

As a resUlt of the illegal expropriation of ukrainian companies' assets and

properry by the il;;i; for"uJ ir, ""rLi" areas of the Donetsk and Luhanslt

亀“

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〕s/PdfS/2016/allnuJ/exPortキ

ukraine.Pdf

APPENDIX F - Page 81 
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3/ ]は at i・

APPENDIX F - Page 82 
 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 83 

TESTIMONY OF TIM JOHNS
 

NIPPON STEEL & SUMIKIN COLD HEADING WIRE INDIANA INC.
 

May 24, 2017
 

Good morning/afternoon. I am Tim Johns, Vice President of Manufacturing 

for Nippon Steel & Sumikin Cold Heading Wire Indiana Inc. (“NSCI”), a newly 

established manufacturer of steel wire for automotive cold heading and forging 

located in Shelbyville, Indiana. NSCI is scheduled to open in October 2017 and 

begin production of steel wire starting in January 2018. When fully operational, 

NSCI’s production facility will directly employ approximately 70 people in 

Shelbyville. 

NSCI is unique in that it will not follow others by simply importing finished 

steel wire from Japan. Rather, the company will import the raw material – that is, 

high-quality wire rods – from Japan, and produce finished steel wire in the United 

States. However, in order to do so, NSCI needs access to a reliable supply of highquality Japanese wire rod. 

If NSCI is not able to import these materials, the company will be forced to 

shut down because the wire quality needed for the production of fasteners and 

other safety-critical auto parts can be achieved only with the high-quality wire rod 

available from Japanese manufacturers. 
 

 

 

 

 

 

 

 

 

APPENDIX F - Page 84 

The quality of the wire rod produced by the Japanese manufacturers is
 

unavailable in the United States. In short, Japanese wire rod is superior to wire rod 

produced elsewhere because only the Japanese manufacturers have demonstrated 

the ability consistently to meet the precision and performance requirements of 

fastener and other safety critical auto parts manufacturers. These downstream 

manufacturers require wire rod that is both extremely durable but also light weight. 

The Japanese wire rod manufacturers are uniquely able to meet these contradictory 

requirements due to their advanced methods of controlling for surface defects, 

inclusions, and size tolerances. 

NSCI intends to win business from its downstream U.S. customers based on 

the quality and reliability of our products. Import duties on wire rod from Japan 

will compromise the viability of our business and lead to the elimination of many 

jobs in Shelbyville and the surrounding area. Further, such duties would also cause 

serious damage to automobile and fastener supply chains in the United States, 

potentially affecting the jobs of thousands of people throughout the country. To 

block imports of Japanese wire rod will simply lead to export of U.S. jobs and 

import of the finished products we make here. For these reasons, I urge you to find 

that Japanese wire rod is integral to the U.S. economy and that such imports do not 

compromise the national security of the United States. 

Thank you. 

2
 
 

 

 

 

 

 

 

 

 

APPENDIX F - Page 85 

BEFORE THE U.S. DEPARTMENT OF COMMERCE 

BUREAU OF INDUSTRY AND SECURITY
 

) 

Section 232 Investigation on the Effect of ) 

Imports of Steel on U.S. National Security ) 

) 

Oral Presentation of Byeong Bae Lee, President, Hyundai Steel America 

1. Good morning. My name is Byeong Bae Lee. I am the President of 

Hyundai Steel America, located in Greenville, Alabama. 

2. Hyundai Motor Manufacturing Alabama, LLC or “HMMA” is a U.S. 

automobile manufacturer located in Montgomery, Alabama. Kia Motors 

Manufacturing Georgia or “KMMG” is a U.S. automobile manufacturer located in 

West Point, Georgia. Hyundai Steel operates a steel processing center in 

Greenville, Alabama that processes cold-rolled and corrosion-resistant steel for 

HMMA, KMMG, and other Automobile Companies, as well as for the suppliers of 

parts and components to those companies. All three companies are affiliated with 

Hyundai Steel of Korea, a Korean producer of various steel products. 

3. Hyundai has invested approximately $2.1 billion in the three 

establishments, with a plan of future investment of approximately $3.1 billion. 

The details are as follows: HMMA was established in 2005. The total investment 

has been approximately $1.7 billion. HMMA employs approximately 3,500 

American workers. In 2016, HMMA purchased approximately 170,000 tons of 

1
 
 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 86 

cold-rolled and corrosion-resistant steel -- 49,000 tons were purchased from 

domestic steel producers, and 121,000 tons were imported from Korea and Japan. 

4. KMMG was established in 2010. The total investment in KMMG has 

been approximately $1.1 billion. KMMG employs approximately 3,000 American 

workers. In 2016, KMMG purchased approximately 208,000 tons of cold-rolled 

and corrosion-resistant steel -- 59,000 tons were purchased from domestic steel 

producers, and 149,000 tons were imported from Korea and Japan. 

5. Hyundai Steel America is a steel processing center for cold-rolled and 

corrosion-resistant steel. Hyundai Steel was established in 2003 with a total 

investment of approximately $82 million. Hyundai Steel employs approximately 

140 employees. Going forward, Hyundai Steel plans to purchase approximately 40 

percent of the cold-rolled and corrosion-resistant steel purchased from domestic 

steel producers. The balance will be imported from Japan, Korea, and other 

sources. 

6. HMMA and KMMG have a plan to invest approximately $3.1 billion in 

upgrading and expanding their domestic U.S. manufacturing operations. The 

investment in these automobile facilities was based on the assumption that HMMA 

and KMMG would be able to purchase high quality cold-rolled and corrosionresistant steel from domestic and imported sources. Roughly 10 percent of 

Hyundai’s Steel requirements are not available from domestic steel manufacturers 

2
 
 

 

 

 

 

 

 

 

APPENDIX F - Page 87 

in the qualities and tolerances required. Hyundai’s access to steel is threatened by 

this action and thus jeopardizes the investments already made as well as the 

planned investments. 

7. The volume of cold-rolled and corrosion-resistant steel required 

directly for national defense needs is limited, and Hyundai believes that existing 

domestic capacity is more than adequate to meet current and projected national 

defense requirements. 

8. For auto makers like HMMA and KMMG, by far the most important 

factors in purchasing cold-rolled and corrosion-resistant steel are product quality 

and product uniformity. Different auto parts require specific qualities, but flatness, 

no wave, and low reject rates are always important. HMMA and KMMG are not 

following a policy of purchasing from their Korean affiliates. To the contrary, 

HMMA and KMMG prefer to purchase from U.S. suppliers where the steel is 

available and meets these quality requirements. 

9. With the emphasis on light weight vehicles to maximize fuel 

efficiency, there is an emphasis on high tensile strength steel. Some U.S. 

producers produce some grades and qualities required, but they do not produce 

other grades and qualities. Both HMMA and KMMG require increased quantities 

of Advanced High Strength Steel (“AHSS”) and Ultra High Strength Steel 

(“UHSS”). These high strength steels are difficult to produce and not all domestic 

3
 
 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 88 

steel producers produce these qualities in the dimensions and to the tolerances 

demanded by KMMG and HMMA. 

10. The investment in KMMG, HMMA, and Hyundai Steel have 

increased employment and provided jobs and economic activity in the 

communities where they are located that previously did not exist. The companies 

have increased domestic purchases of steel, providing customers and opportunities 

that did not previously exist. 

11. At the same time, these investments demand the ability to also access 

high quality imports of cold-rolled and corrosion-resistant steel. As noted, some of 

these grades and qualities are not available from U.S. producers. In addition, 

because HMMA’s and KMMG’s research center for development of new models is 

located in Korea, new models are often designed initially using Korean and 

Japanese steel due to the ease of logistics. 

12. Existing trade remedy laws already protect the domestic steel industry 

against unfair subsidization and dumping. Further restrictions are not necessary. 

13. Thank you and I am prepared to answer any questions you may have. 

4
 
 

APPENDIX F - Page 89 

Statement of the American Institute for International Steel 

At the 

Public Hearing for the Section 232 Investigation on the Effects of Steel Imports on 

U.S. National Security 

Bureau of Industry and Security 

U.S. Department of Commerce 

May 24, 2017 

I am Gary Horlick appearing on behalf of AIIS. We include 108 members, including 

traders, freight forwarders, stevedores, shippers, importers, exporters, railroads, port authorities, 

unions, and many other logistics companies. We account for approximately 80% of imported 

basic steel products. 

1.	 The purpose of Section 232 is to ensure that the U.S. military can obtain the types of 

products it needs in the quantities it needs when it needs them. It was not intended to 

provide overall protection for U.S. industry for other purposes – there are lots of other 

statutes for that purpose. 

The Department of Commerce’s Federal Register notice requests information concerning 

a very broadly undefined industry of “steel.” That industry’s long-term prospects are 

sound, as shown by the start-up of new facilities such as Big River Steel. The major 

change in the industry was the emergence of entrepreneurial companies such as Nucor. 

The electric arc furnace sector grew from less than 10 percent to 57.9 million tons in 

CY2016 compared to 28.5 million tons for blast furnace production, and 26.5 million 

tons of imports. Individual companies making individual products may change their 

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APPENDIX F - Page 90 

product mix from time to time, but there is no sign that they cannot make the products 

our military requires as needed. 

Further, analysis under this statute requires looking at all the capacity that would be 

available to the U.S. military in times of need, and that would most certainly include 

Canada and Mexico, and probably other countries as well. 

2.	 The past history of this clause illustrates the extreme caution needed to avoid misuse for 

political reasons. It is frequently stated that the statute has only been used for import 

protection twice, both involving relatively minor uses involving crude oil in the 1970s. 

But this forgets the largest use of this statute, under a predecessor statute. From 1959 to 

1973, the U.S., for internal domestic political reasons, imposed quantitative restrictions 

on the import of crude oil. This had 3 very direct consequences: 

(a) In the name of protecting our national security, the U.S. for those 12 years 

pumped out our own reserves, and in the end of the period, the U.S. for most of its 

history a major net oil exporter, had become a net importer of crude oil. 

(b) During this period, U.S. downstream industry, as a direct result of the quotas, paid 

50-100% more for its oil (used both as an input and as energy) than its foreign 

competitors, effectively giving a huge cost advantage to competitors in the newly 

reconstructed industries in Japan and Europe. At the end of the quotas, the U.S. 

ran a trade deficit in goods. 

(c) The U.S. granted an exemption to the quotas to its close ally and neighbor, 

Canada. In 1959, the minister of national patrimony of Venezuela, then a very 

close U.S. ally, flew to Washington to ask for a similar exemption. This was 

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APPENDIX F - Page 91 

refused and Minister Alonso instead of flying back to Caracas flew directly to 

Riyadh and founded OPEC. 

The important lesson that we can draw from this is that when contemplating using a 

statute like Section 232, we should treat it with extreme caution and concern for 

foreseeable and unforeseen consequences. This is especially true when the rationale for 

employing Section 232 appears to be entangled with political considerations for broad 

industrial policy goals. 

3.	 Logically, the national security “bottleneck” if there is one is the dwindling reserves of 

U.S. iron ore. According to the U.S. Geological Survey, the U.S. is not even in the top 10 

for iron ore reserves, while significant military competitors such as Russia and China 

have more than double our reserves. This is unsurprising, since we have been using up 

our iron ore at a substantial rate for more than 100 years. In addition, U.S. iron ore has 

relatively low iron content compared to those countries. Consequently, stimulating 

production of steel in the U.S., which currently relies heavily on U.S. iron ore, only 

makes us more dependent on imports of iron ore. Fortunately, Canada and Mexico have 

good reserves of iron ore, as do friendly countries such as Australia and Brazil. But if the 

concern is to have everything sourced in the U.S., it would be not only illogical but 

dangerous to use up our own iron ore first – as we did with crude oil. 

4.	 Finally, it is impossible to ignore the certainty that other countries will retaliate against 

U.S. exports. Let’s start with the obvious: 

•	 The United States is the largest exporter of military equipment in the world, 

selling over $20 billion annually in recent years. But we have competitors for 

almost all our products—Russia is second, for example. This affects not only the 

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APPENDIX F - Page 92 

jobs that are dependent on exports, but the entire economics of our defense base. 

The economics of great airplanes like the F-35 or the F-22 do not work unless 

they are sold to some of the same countries whose steel this proceeding might 

limit from entering the U.S. It is hardly hypothetical that those steel exporting 

countries might want to stop buying our military equipment and switch to other 

sources, as they might easily do. 

•	 And there is no reason to believe retaliation would be limited to military sales. A 

member of the Mexican Senate and a candidate in the 2018 presidential election 

recently introduced a bill to force Mexico to diversify its sources of corn away 

from the U.S. He states that the goal is to reduce Mexico’s imports of corn from 

the U.S. from $1.3 billion down to $500 million. While some may think that that 

is no problem for U.S. corn growers, as they can simply sell the corn elsewhere, 

that logic does not apply if many countries do the same thing. And in any event, 

agriculture today is not that simple. When more than 60 countries banned our beef 

exports in 2003 on spurious SPS grounds, we lost more than $3 billion in exports 

a year, and in fact we never fully recovered to this day (China, for example, the 

world’s largest potential market for beef, remains closed to the U.S. despite 

announcements from last year and this year that it would reopen, while it is open 

to our friendly competitors in Australia). When the prior administration imposed 

a safeguard on tires from China, China retaliated the same day by announcing 

antidumping and countervailing duty cases against imports of U.S. automobiles 

and chicken parts. There are reports that Jeep eventually had to ship production 

of Jeeps—and jobs--to be sold in China from Toledo, Ohio to China because of 

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APPENDIX F - Page 93 

those cases. Chicken was more impacted: $500 million of the $800 million that 

the U.S. industry sold to China annually before the cases was composed of 

chicken paws and tips for which there is no other market except rendering. We 

had been selling those parts at 80 cents a pound in China. When they were sold 

for rendering in the U.S., our chicken producers received only 4-5 cents a pound. 

In general, the underlying economics of agriculture is that a relatively small loss 

of foreign markets leads to very large and potentially catastrophic drop in prices 

in the U.S. market. Food security for Americans would seem a very immediate 

national security concern. 

5.	 None of this is necessary, of course. For items for which there is a national 

security need – even according to the American Iron and Steel Institute, this 

amounts to approximately 3% of U.S. steel production; prior statistics set this 

amount originally at 0.3%, a number which is still used by reputable analysts-- the 

Government has full legal means to access what it needs. In addition, less trade 

restrictive means such as additional subsidies could be used to stimulate 

production of those items. 

Thank you very much. 

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APPENDIX F - Page 94 
APPENDIX F - Page 95 
   

          

       

     

     

     

     

           

       

           

                           

                           

                           

                       

                             

                           

                              

                           

       

                         

                               

                               

                                     

                         

                               

                                                            

                             

                                 

     

APPENDIX F - Page 96 

U.S. DEPARMENT OF COMMERCE
 

PUBLIC HEARING ON SECTION 232
 

NATIONAL SECURITY INVESTIGATION OF
 

IMPROTS OF STEEL
 

May 24, 2017
 

ORAL TESTIMONY OF

Tracey J. Norberg
 

Senior Vice President & General Counsel
 

U.S. Tire Manufacturers Association
 

CONTACT: tnorberg@USTires.org or +1 202 682 4839
 

On behalf of the member companies of the U.S. Tire Manufacturers Association (“USTMA”),1 I

appreciate the opportunity to submit testimony to the Section 232 National Security Investigation of

Imports of Steel. USTMA represents ten tire manufacturers with manufacturing operations in the United

States. USTMA’s membership includes: Bridgestone Americas, Inc.; Continental Tire the Americas, LLC;

Cooper Tire & Rubber Company; The Goodyear Tire & Rubber Company; Kumho Tire U.S.A., Inc.;

Michelin North America, Inc.; Pirelli Tire North America; Sumitomo Rubber Industries; Toyo Tire Holdings

of Americas Inc.; and Yokohama Tire Corporation. In the United States, USTMA members employ nearly

100,000 workers, operate 55 tire‐related manufacturing facilities in 19 states and generate over $27

billion in annual sales.

Tire manufacturing is vital to the U.S. economy. Tires manufactured by USTMA members safely

transport millions of Americans and millions of tons of goods each day throughout the United States.

USTMA members have a direct interest in the Section 232 National Security Investigation of Imports of

Steel. Virtually all of the steel wire rod used to manufacture tire cord that is consumed in U.S. tire

manufacturing plants is sourced from foreign suppliers due to the stringent performance and quality

requirements of tire manufacturing, as well as quality and supply limitations of domestic steel wire rod

1 Effective May 23, 2017, the Rubber Manufacturers Association, the national trade association for tire

manufacturers that produce tires in the United States, has officially changed its name to the U.S. Tire

Manufacturers Association (USTMA).
       

     

                               

                                 

                             

                                     

                          

                           

                     

                                 

                               

                           

                                   

                         

                           

                                 

                                   

                           

                                     

                             

                                    

                         

                                

                         

                             

APPENDIX F - Page 97 

U.S. Tire Manufacturers Association

May 24, 2017

Page 2

suppliers. It is our understanding that electric arc furnace technology, used in domestic steel mills, is

unable to produce consistently the quality of tire cord‐quality wire rod necessary to make tire cord for

use in tire manufacturing. Tire cord‐quality wire rod is produced using basic oxygen furnace technology,

which is employed by foreign wire rod suppliers, and is a product that cannot be supplied in the volume

and under the quality necessary for military and civilian applications by domestic producers.

Depending on the outcome of the Section 232 National Security Investigation of Imports of

Steel, potential remedies could have a significant negative impact on the U.S. tire manufacturing

industry. In particular, any action that curtails the availability of the supply of tire cord or tire cord‐

quality wire rod would affect U.S. tire production. Any such trade constraint could potentially have a

cascading negative impact on U.S. commerce, since the transportation industry and the military depend

on a reliable supply of tires to ship goods throughout the country. In addition, the U.S. military depends

on the tire manufacturing industry to supply tires to protect our national security.

Tires contain a number of highly engineered components, including high carbon steel. The steel

wire in tires is manufactured using SAE 1080 or higher steel wire rods (often called “tire cord‐quality

wire rod”), which are drawn into steel wire to meet exact specifications (or “tire cord” and “bead wire”).

This steel wire is used both in a tire’s steel belts, providing strength, high load‐carrying capacity,

puncture resistance and durability, and in the bead, which holds the tire to the rim. SAE 1080 and higher

tire cord‐quality wire rod contains a minimum of 0.80 percent carbon content, a low manganese

content, between 5.0 mm and 6.5 mm in diameter and is generally free from defects. The high carbon

content and consistent surface quality are required to assure performance to stringent tire performance

requirements. All types of modern tires designed for highway use contain steel belts and steel beads,

including passenger, light truck and truck/bus tires. However, truck/bus tires contain a greater

percentage of steel, due to the more demanding load and durability requirements of heavier vehicles.
       

     

                             

                 

                             

                        

                               

                                       

                       

                             

                    

                               

                                   

                                   

                           

                               

                                   

                       

                           

                             

                               

                     

                             

                             

                           

APPENDIX F - Page 98 

U.S. Tire Manufacturers Association

May 24, 2017

Page 3

Military and related vehicles have intrinsically demanding durability requirements, in light of the need to

operate such equipment in extreme conditions around the world.

Tires sold in the United States are self‐certified by tire manufacturers to meet U.S. Federal

Motor Vehicle Safety Standards set by the National Highway Traffic Safety Administration. Federal

Motor Vehicle Safety Standard No. 139 applies to passenger and light truck tires made after September

1, 2009 for use on vehicles that have a gross vehicle weight rating (GVWR) of 10,000 pounds or less and

that were manufactured after 1975. Generally recognized as the most stringent tire performance

standard in the world, FMVSS No. 139 was promulgated in response to the Transportation Recall

Enhancement, Accountability and Documentation (or TREAD) Act enacted in October 2000. Among

other requirements, FMVSS No. 139 mandates that tires sold in the United States perform to meet the

specifications of the endurance low pressure test, which requires a tire to run for 34 hours at increasing

loads on a test wheel, then run for two additional hours on the test wheel after being significantly

deflated. Adherence with FMVSS No. 139 necessitates tire construction to be robust, puncture resistant

and resistant to the effects of load and heat, demanding high quality materials, including high carbon

steel. Similarly, truck and bus tires sold in the United States must meet FMVSS No. 119, which includes

tests for strength and high‐speed performance. Additionally, truck/bus tires must meet customer and

vehicle requirements for substantial load‐carrying capacity to meet the demand of a diverse array of

vehicles. As well, passenger/light truck and truck/bus tires are designed to contribute to vehicle fuel

economy by reducing vehicle weight and lowering the tire’s rolling resistance. Tire cord made from high

quality, high carbon steel is vital to maintaining tire safety and performance.

Given the unique needs of tire manufacturers to have continuous, consistent supply of tire cord

made from tire cord‐quality rod (Grade SAE 1080 and higher steel), USTMA respectfully requests that

the U.S. Department of Commerce exclude from the Section 232 National Security Investigation of
       

     

                             

                                

                       

          

     

         

                             

                                 

                               

                             

                               

               

APPENDIX F - Page 99 

U.S. Tire Manufacturers Association

May 24, 2017

Page 4

Imports of Steel the specific Harmonized Tariff System (HTS) codes corresponding to the steel products

necessary for the production of tires. In particular, USTMA asks that the following HTS codes be

excluded from the Section 232 National Security Investigation of Imports of Steel:

 7213.91.3011: Tire cord‐quality steel wire rod

 7312.10.1030: Tire cord

 7217.30.4530, 4560, 4590: Bead wire

Tariffs or quotas on these products would significantly disrupt the production of tires in the

United States, have quality and supply limitations in producing SAE 1080 and higher steel wire rod to

replace imported products. A disruption in tire manufacturing in the U.S. would harm the U.S. economy,

since consistent tire supply is critical to the nation’s shipping and commerce needs, and threaten

national security, since the U.S. military relies on the tire industry to provide high performing and

durable tires to aid in our national defense.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 100 

May 22, 2017 

Presentation for Section 232 National Security Investigation of Imports of Steel: 

Honorable members of the panel, my name is Suzi Agar and I’m representing ADI (Air 

Distribution Institute). ADI is a non-profit association that was formed in 1947 to promote 

steel products and fittings for the heating, venting and air conditioning industry. Currently, 

there are sixteen members who are the owners or principals of over thirty-six manufacturing 

facilities located throughout the US. Together, we also proudly employ over 5,000 full time 

and 150 part-time workers within the U.S. 

A key product used by ADI members is light-gauged corrosion-resistant steel, commonly 

referred to as “CORE”. Specifically, we utilize: Hot Dipped Galvanized Sheet in coil form, 

which conforms to ASTM A653; Grade CS, Type B, with a zinc coating known as G-30. 

Please note that, first and foremost, the key products we import are not in any way tied to 

the national defense industry. Our products are not used for armor, defense vehicles, ships, 

aircrafts or infrastructure. The HVAC products we manufacture are predominantly utilized 

for the housing industry and for the construction of light commercial buildings. 

For decades, domestic mills have vacated the residential HVAC market by choice. Because 

most domestic mills are governed by a ‘tons per hour’ pay scale, it’s simply not profitable 

nor advantageous for them to produce light gauge steel or aluminum. Rightfully so, they 

have focused their production on fabricating heavier gauged metals. These metals are used 

for the appliance, automobile, heavy construction, tube and pipe industries. They are favored 

not only because of the higher prices they can command, but also because they are less 

taxing to produce. There is neither the demand nor the desire for them to produce light 

gauged metals and aluminum. 

The scarce availability of domestic light gauge metals coupled with the high prices they 

charge, is directly reflected in the average yearly totals ADI members buy from domestic 

mills: approximately 77,000 tons of galvanized metal and 960 tons of aluminum, all 0.010" ­

0.012". On a yearly average, ADI members purchase approximately 200,000 tons of these 

same type light gauge metals from foreign sources. 

ADI members also have a need for multiple widths of steel. There are some types of steel 

we purchase that are currently available from only one U.S. mill. We would prefer to source 

our metals from domestic mills, but due to restricted availability and pricing, we are basically 

forced to find mills outside of the U.S. who are willing to work with us. 
 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 101 

Because of the tariffs already added from the 2015 Antidumping lawsuit, our members and 

therefore our U.S. consumers are already feeling the effects of higher priced steel. Additional 

tariffs and restrictions from a second action will continue to drive prices up. Domestically, 

prices have increased around 16% between 2015-2016. And, on average, 2017 domestic 

prices are even higher, by approximately 10% YTD. 

We would anticipate a serious disruption and probable scarcity of metal if forced to buy 

higher priced steel from either within or outside the U.S. This would escalate the probability 

of the housing industry to seek alternatives to ducted HVAC systems. Additionally, we 

believe jobs will be lost due to a lack of demand for our affordable products. 

The members of ADI believe in and support President Trump's initiative to prepare America 

for adequate readiness in the event of a national security event. We do not want our types 

of light gauge metals to interfere with domestic mills being able to react quickly if there was 

a crisis. We are sympathetic to the intent of this investigation, however, U.S. manufactures, 

like ourselves, are truly in a unique niche: the production of light gauge HVAC ductwork and 

fittings. 

We need readily accessible as well as reasonably priced steel. We respectfully ask that you 

exclude light gauge galvanized metals and aluminum (0.010"-0.012" thicknesses) from the 

Section 232 National Security Investigation of Imports of Steel. We respectfully appeal 

to the U.S. government to give our industry consideration by not imposing additional tariffs, 

adding restrictions or prohibiting our ability to purchase light gauge metals and aluminum 

from foreign markets. Thank you. 
APPENDIX F - Page 102 

Testimony of John Cross (Steelscape LLC) 

Good morning (afternoon). My name is John Cross, President of Steelscape 

LLC, an American company that manufactures coated and painted steel for US 

companies. Steelscape has facilities in Washington State and California, together 

employing almost 400 men and women in productive, high-paying jobs. As I will 

explain below, Steelscape is structured to import the raw material that we use to 

produce our coated and painted steel, from Australia and Asia. This imported 

substrate not only does not threaten the country’s national security, but actually 

promotes it by permitting Steelscape, a US steelmaker, to participate productively 

in the US economy. If the president were to institute broad-based restrictions on 

steel imports, it would jeopardize the viability of Steelscape itself, and in the 

process threaten the livelihood of our American employees. 

Steelscape has two facilities, one located on the Columbia River in Kalama, 

Washington, and one located in Rancho Cucamonga, California. Both facilities 

produce coated steel products, but not from liquid steel. Our Kalama facility 

transforms hot rolled coils into cold rolled and galvanized coils, while our Rancho 

facility purchases cold-rolled steel to produce galvalume coils. Both facilities also 

paint most of the coated steel they produce. A large portion of Steelscape’s output 

ships to ASC Profiles LLC, an affiliated company, which uses our steel to 

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APPENDIX F - Page 103 

manufacture steel profiles and building components for commercial and residential 

use in the western United States. 

Both Steelscape facilities need imported steel substrate to make their coated 

products. The Kalama site is located literally along the side of the Columbia 

River, a deep-water port facility which allows ocean-going vessels to discharge 

steel directly from the dock to Steelscape’s storage yard. Shipping costs from 

Australia or Asia range from $60 to $100 per ton LESS than rail rates from most 

US mills. 

For US mills to get their steel to the West Coast, they have to ship steel by 

rail across the Rocky Mountains, which is an expensive proposition. I know, 

because one of Steelscape’s parents, BlueScope Steel, also owns a US steel mill, 

North Star BlueScope Steel in Delta Ohio, producing hot-rolled steel. Steelscape 

can purchase only a few hundred tons of steel a month from North Star due to the 

added cost of freight. 

Sourcing steel from west coast producers is also problematic for us. There 

are only two or three suppliers of hot-rolled steel in the West Coast, and they are 

focused on supplying their own downstream needs and customers. Let me tell you 

something else about the West Coast steel market – none of the major steel 

producers in the West Coast melt and pour their own steel. California Steel 

Industries, a joint-venture of JFE Steel of Japan and Vale of Brazil, hot-rolls and 

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APPENDIX F - Page 104 

cold-rolls semi-finished slab that it buys from elsewhere, mostly from import 

sources. UPI, the other major producer, cold-rolls its steel from hot-rolled steel 

that it purchases from its two owners, US Steel and POSCO of Korea. 

Historically, half or more of the hot-rolled steel that UPI uses to produce 

downstream steel products it obtains from Korea. The dynamics of the West Coast 

market are such that virtually all steel producers in the market have to import a 

large portion of the raw material they use from abroad. Steelscape is no different. 

Steelscape is subject to another structural restriction that prevents it from 

purchasing raw material from US mills: Any steel substrate that Kalama would 

buy from domestic suppliers would have to arrive by rail, which Kalama cannot 

accommodate due to space limitations. We are not in a position to absorb the 

significant capital investment that would be required for additional land and heavy 

equipment to support delivery by rail. 

Domestically produced steel does not compete with imported steel for 

Steelscape’ substrate business. Steelscape requires imported steel to survive as an 

American producer of coated steel products. The proof of that is this: last year, 

when the Commerce Department imposed almost 30% dumping duties on hotrolled steel from Australia, Steelscape did not replace its Australian hot-rolled steel 

with a single ton of domestically-produced hot-rolled steel. Instead, we imported 

hot-rolled and cold-rolled substrate from other countries to meet its needs. By 

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APPENDIX F - Page 105 

doing so, Steelscape was able to remain a going concern, saving 243 jobs in 

Kalama and 131 in California. 

And it is not only Steelscape jobs that would potentially be at risk. As I 

mentioned, much of Steelscape’s production goes to ASC Profiles, which uses the 

coated steel to produce metal building components. If ASC could not buy reliable, 

high-quality steel from Steelscape – made from imported substrate – its operations 

could also be at risk. 

The steel substrate that Steelscape must import from Australia and other 

countries does not threaten the security of at least this part of the United States’ 

steel industry; it helps the industry survive and prosper. 

I would like to point out, in addition, that a large portion of the steel 

substrate that Steelscape imports is from BlueScope Steel Ltd. in Australia. 

BlueScope Steel Limited is the only exporter of flat-rolled steel from Australia. 

The steel substrate that Steelscape imports from Australia – or from any other 

source – is not for any defense or national security use. It is simple, flat-rolled 

steel that we coat and paint and ship for use in commercial and residential 

buildings throughout North America. This kind of steel has no impact on the 

United States’ national security requirements. 

Steelscape, in short, needs to import steel in order to produce steel in the 

U.S. We ask the Department to consider the special situation of companies such as 

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APPENDIX F - Page 106 

ours, companies that depend on imported steel to survive as American steel 

producers. And we ask you to take the special relationship between Australia and 

the United States into account. 

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APPENDIX F - Page 107 

BEFORE THE U.S. DEPARTMENT OF COMMERCE 

BUREAU OF INDUSTRY AND SECURITY
 

) 

Section 232 Investigation on the Effect of ) 

Imports of Steel on U.S. National Security ) 

) 

Oral Presentation of Jim Tennant, Chief Executive Officer, Ohio Coatings
 

Company
 

1. Good morning. My name is Jim Tennant. I am the Chief Executive 

Officer of Ohio Coatings Company or “OCC”, located in Yorkville, Ohio, on the 

Ohio/West Virginia border. 

2. OCC is a domestic U.S. producer of tin plate. Tin plated products are 

used in food and beverage cans, paint cans, aerosol cans, and similar products. 

3. OCC operates a world-class, 130,000 square foot electrolytic tin plate 

manufacturing facility with a capacity to produce 250,000 tons per year of the 

highest quality tin plate available anywhere. When OCC’s plant opened in 1997, it 

was the first tin plating mill to have been constructed in North America in over 30 

years. OCC employs 66 American workers who live in Ohio and West Virginia. 

Those jobs, and the very survival of OCC as a U.S. tin plate manufacturer, are 

threatened if imports of tin-mill black plate, the steel substrate used to produce tin 

plate, are restricted as the result of this investigation. 

4. OCC is owned by TCC, a Korean producer of Tin Plate, and Esmark. 

The total investment in OCC to date is $80,000,000. The investment in the mill, 

1
 
 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 108 

and its continued operation, was conditioned on the ability to import some of the 

black plate substrate necessary to produce tin plate. 

5. Black plate is a specialty steel that was developed and designed for 

the production of tin plate. It has no other significant uses. Besides OCC, there are 

three other domestic producers of tin plate products in the United States: 

ArcelorMittal, U.S. Steel, and USS-POSCO Industries (“UPI”). The volume of tin 

plate and black plate required directly for national defense needs is limited, and 

OCC believes that existing domestic capacity is adequate to meet current and 

projected national defense requirements. 

6. Unlike our three competitors in the tin plate market, OCC does not 

have its own captive supply of black plate. Rather, OCC is dependent upon 

purchasing black plate in the merchant market. The only domestic producers of 

black plate, however, are also our competitors in the tin plate market – primarily 

ArcelorMittal and U.S. Steel. As a West Coast producer, UPI is not a viable 

supplier of black plate for OCC. Sourcing 100 percent of our black plate 

requirements from our competitors is not a viable option for OCC. Unless we are 

able to continue to also purchase high-quality black plate from import sources, 

OCC may have to close its doors. 

7. In 2012, RG Steel, our former parent company and source of OCC’s 

black plate, went through bankruptcy and was liquidated. Until the 3rd quarter of 

2
 
 

 

 

 

 

 

 

 

 

APPENDIX F - Page 109 

2016, OCC obtained its black plate from ArcelorMittal, POSCO, and from 

Japanese suppliers. The only viable domestic supplier at this point is 

ArcelorMittal. 

8. OCC is no longer able to import black plate from Korea and Japan 

and has not done so since the 3rd quarter of 2016 as a result of the antidumping 

and countervailing duty actions against cold-rolled steel. As a result, OCC 

continues to purchase black plate from ArcelorMittal and from some import 

sources, but OCC lacks sufficient raw materials to maximize its efficiency. In 

2015, OCC operated at 60 percent of capacity, declining to 50 percent in 2016 as a 

result of the antidumping and countervailing duty orders. In the first quarter of 

2017, OCC is operating at 40 percent of capacity because of shortages of black 

plate substrate. 

9. Moreover, despite U.S. Steel’s assurances before the International 

Trade Commission that they could supply black plate, U.S. Steel has never even 

offered competitively priced black plate to OCC, as compared to offers from 

ArcelorMittal and other suppliers. U.S. Steel’s “offers” have been at prices that 

were higher than the current market price for finished tin plate. Clearly, U.S. Steel 

is not interested in supplying OCC due to the fact that we compete with them in the 

tin plate market. 

3
 
 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 110 

10. OCC cannot survive with ArcelorMittal as its only supplier. If OCC 

sourced all of its black plate from ArcelorMittal and that plant were to have any 

kind of shutdown, fire, strike, etc., OCC would be shut down. 

11. Second, ArcelorMittal is OCC’s direct competitor in the tin plate 

market. They will always prioritize supplying their own operations first. 

12. Any further import restrictions on black plate would be devastating to 

OCC and would threaten its survival as a U.S. producer. 

13. To the extent that this proceeding is designing an industrial policy 

toward the steel industry and steel users, thought must be given to the costs of 

shutting out imported steel needed to supplement domestic production and to 

support downstream users of steel. Restrictions on imports of black plate have 

weakened, not strengthened the U.S. industry. 

14. Thank you and I am prepared to answer any questions you may have. 

4
 
 

 

 

 

 

 

 

 

 

APPENDIX F - Page 111 

Testimony of
 

Leo W. Gerard
 

International President
 

United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
 

Allied Industrial and Services Workers International Union (USW)
 

regarding the
 

Section 232 National Security Investigation of Imports of Steel
 

May 24, 2017
 

Mr. Chairman. 

On behalf of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, 

Allied Industrial and Service Workers International Union (USW), I appreciate the 

opportunity to testify today on behalf of our membership in the iron and steel sector. Our 

members are involved at every level of steelmaking, from the raw materials to finished 

products in almost every North American Industry Classification System (NAICS) 

category of steel product, which gives our union a very broad perspective of the critical 

nature of steel manufacturing to our national security. 

The examination of this potential action occurs at a perilous time for the steel 

industry. There is no doubt that the U.S. steel sector is essential to our nation’s national 

security. From the materials utilized by our military, to the materials necessary to build, 

maintain and repair our critical infrastructure, our national security is increasingly at risk 

because of the relentless economic attacks on our steel industry. 

It's important to recognize that the steel sector is not monolithic. Indeed, as public 

policy clearly identifies, there is a continuum of products from the basic materials through 

iron and on to steel. When talking about Buy America, for example, the statute refers to 

“iron and steel”. And, the industry’s preeminent trade association is named the American 

Iron and Steel Institute. 

As this Section 232 investigation continues, I hope that the Administration will 

evaluate the challenges facing the entire industry spectrum. From the basic material to 

iron and steel products; to elements like silicon metal, manganese and chromium used in 

making alloys, our national security interests are at risk. All of these products are 

important to our national security. My testimony will use the term steel to reflect the entire 

sector and all these products. 
 

 

 

 

 

APPENDIX F - Page 112 

Steel is literally the backbone of this great country ensuring our military might and 

our ability to respond to potential attacks. America’s steel producers and workers have 

been called upon to support this nation in times of war and to build the capacity to deter 

potential adversaries from initiating conflict. We need to revitalize the sector to meet 

today’s growing needs and to ensure that we have the “surge” capacity, should it be 

needed. That means having not only the productive capacity in our mills, but the skilled 

workforce necessary to man the operations. 

Meeting national security needs in steel is not just about basic commodities. It’s

also about having the capacity to fabricate the products we need that are necessary for 

the functioning of the U.S. economy. The criteria of the National Security Industrial Base 

Regulation (NSIBR) provide broad guidance for the vital understanding of how steel can 

affect national security. USW believes the Administration must focus in on the criteria 

developed into law which incorporates an understanding that steel is not only necessary 

to build a tank or a ship but to grow and build a strong nation. Criteria such as the impact 

of foreign competition on the economic welfare of the steel industry must rise in 

prominence as the 232 report is prepared. 

Others will likely testify about vulnerabilities related to a smaller, less diversified 

domestic steel industry but I wish to highlight a few products which show the 

interrelatedness to defense and non-defense applications. The plate mills at USWrepresented ArcelorMittal Burns Harbor produce not just steel for military applications but 

have supplied steel for John Deere tractors which harvest the foodstuffs for our country. 

Simply, an army marches on its stomach as much as it moves in USW-made Bradley 

fighting vehicles. This is why we urge that this investigation approach national security in 

steel from a holistic perspective. We as a country have to ask ourselves the question; if 

we don’t have a domestic non-defense manufacturing base that provides steel goods, 

how can domestic defense steel industries survive? 

The ability to fabricate and produce basic steel products like pipe and tube must 

also be considered in this investigation. A lack of domestic capability has the potential of 

undermining the country’s ability to deliver basic needs to communities. 

The United States uses 42 billion gallons of water a day to support daily life from 

cooking and bathing in homes to use in factories and offices across the country. Drinking 

water is delivered via one million miles of pipes across the country. Every day, nearly six 

billion gallons of treated drinking water are lost due to leaking pipes. An estimated 

240,000 water main breaks occur each year. That is why we as a union are dismayed 

when we read about infrastructure projects like the Holland Tunnel using Turkish, Eastern 

European, and Chinese steel for 5,700 tons of pipe. We are undermining domestic 

producers’ ability to supply our citizens. As plants close, the decrease in revenue to 

government from local property and business taxes creates a vicious downward cycle in 

disinvestment. This in turn creates social and economic instability for millions of working 

Americans. 
 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 113 

Another example is Grain Oriented Electrical Steel (GOES) which is critical to 

producing the transformers that help deliver power. Products made from GOES – power 

transformers, switchgear, and distribution transformers – are all necessary to complete 

the delivery of electricity to the entire country. The Department of Energy (DOE) has 

highlighted that if our country’s electrical grid sustained substantial damage, it could take 

months to obtain certain key parts. We must have the capacity not only to produce the 

underlying product, but this nation must retain the ability to manufacture the final products 

dependent on those commodities. 

We live in highly uncertain times with rising threats. Traditional nation states, like 

North Korea, are not the only threats we face. As the 9/11 attacks made all-too-clear, 

non-state actors have the capacity to inflict enormous damage. 

Europe is confronting terrorist actions on a regular basis and the threats here at 

home are just as real. Cyber capabilities have the capacity not only to damage control 

systems, but the very operations themselves as was reported in 2014 when hackers 

attacked a German steel mill and inflicted “massive” physical damage. The ability to 

strengthen our critical infrastructure and ensure its resiliency, should it be damaged, are 

vital to protecting the country, its citizens and its interests. 

America’s steel mills are far from the smoke-belching “rust belt” images that many 

still have in their minds. Here in the United States a combination of massive investments 

in plant, equipment, technology and people have made our plants some of the most 

efficient on earth. Labor productivity has seen a five-fold increase since the early 1980s, 

going from an average of 10.1 man-hours per finished ton of steel to an average of 1.9 

man-hours per finished ton in 2015. 

Traveling through a facility you will find few workers on the plant’s floor as most 

man computers and high tech monitoring equipment. We must recognize that the modern 

steel mill requires specialized skills. Our members spend hundreds of hours training and 

specializing in making steel products. I fear that lack of action and continued decline of 

U.S. steelmaking will reduce the basic skilled human resources necessary to produce 

steel products in the country anymore, weakening our national security and economy. 

The decision to include all steel products spanning the gamut of the industry in this 

investigation sends an important signal: The United States cannot simply try to isolate 

one product or one technology and then rely on world markets to generously, and 

immediately, support America’s needs in a crisis. If you travel through the holding yards 

of a steel mill, you will see materials which appear common in appearance, but one that 

may have vastly different metallurgical properties from its twin right next to it. From armor 

plate, to high carbon steel, to fan blades for jet engine turbines, to Oil Country Tubular 

Goods and countless other basic and finished products; steel supports our nation’s

security interests. And, product-after-product has been under attack by our trading 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 114 

partners – all important in some way to our national security. Other countries will first 

worry about their own needs. We want to have the ability to meet our needs quickly, 

without having to worry about supply lines and security. 

In a time of crisis it is quite possible that some countries may simply refuse to 

supply us, depending on what the underlying cause of the conflict or problem is and who 

is involved. Remember during the Gulf War how Switzerland refused to provide the U.S. 

military with over-flight rights? Others could easily refuse to supply the United State with 

materials in future confrontations. At the end of the day, only the United States can 

guarantee the security interests of its people. We cannot simply hope for the best, we 

must prepare for the worst. 

Our domestic industry has been, and is, under attack from foreign unfair, illegal, 

predatory and protectionist policies. Heading up this list is China which, through a 

network of non-market economic policies has dramatically expanded its steel production 

capacity, fueling global overcapacity that has swamped world markets. China is engaged 

in an attack on our entire manufacturing sector but it has been targeting steel longer than 

any other product. 

Attached to this testimony is a paper we prepared on China’s “Broken Promises.”

Its leaders have repeatedly indicated that steel overcapacity is something the People’s

Republic of China intends to lower, and while the country makes promise after renewed 

promise of their intent to dismantle the excess capacity it has created there has been no 

net decrease in capacity, only increases. 

China, despite all its rhetoric on cutting its overcapacity, increased its operating 

capacity by 36 million tons in 2016. China’s overall operating capacity is estimated to 

have risen to 1 billion tons, from about 965 million tons the year before. 

Shortly after the last steel crisis in the late 1990s which decimated U.S. production 

and employment, we were able to convince the Bush Administration to bring a Section 

201 case on certain steel products. Let’s recognize that his Administration did not readily 

embrace the effort: It was only after Senator Jay Rockefeller had cobbled together the 

votes on the Senate Finance Committee to initiate action that the Administration used 

their authority to self-initiate action. 

Quickly, the Administration began to issue waivers and reduce the scope of the 

relief. But, after a lot of pain and suffering through bankruptcies, restructurings, layoffs 

and benefit cuts, the industry stabilized. At roughly the same time, China became a 

member of the World Trade Organization as a result of Congress’ grant of Permanent 

Normal Trade Relations. China took that as the signal to begin a massive trade attack 

on the U.S. and world markets. 
 

 

 

 

 

 

 

 

APPENDIX F - Page 115 

China’s actions have been virtually unchallenged by the international community. 

Indeed, here in the U.S., the bulk of the trade actions which have been taken were at the 

initiation of the private sector – a substantial portion because of the Steelworkers. The 

USW has participated in hundreds of antidumping and countervailing duty cases and 

have initiated and brought a number of them on our own. We have launched Section 301 

cases on green technology and efforts on China’s actions in the auto parts sector as well 

as a Section 421 case on tires. 

All of these efforts could have been initiated by government with its existing 

authority. We do not view filing trade cases as a sign of success. Yes, we are proud of 

our fights on behalf of our members. But, to win a case, you have to lose: Winning a 

case requires that you prove injury, or the threat of injury. At the International Trade 

Commission, this generally requires employment reductions, lost profits, suppressed 

wages, and diminished market share. When relief is obtained, if it’s authorized, we are 

lucky to stabilize the industry as our competitors often take their unfairly-traded products 

and ship them through third country markets. 

We are watching this slow creep of relief in the market this year because the steel 

industry and the USW have been working cooperatively on several major trade cases. 

Three of these cases, filed in 2015 and completed in 2016, impact approximately 8 million 

tons of finished imports that entered the U.S. in 2015 alone. In fact between January 2016 

and January 2017, duties (tariffs) against illegally dumped and subsidized steel increased 

close to 20 percent. 

These cases are having an effect but they are muted by global overcapacity and 

lack of sustained policy action by the U.S. government. The steel industry adjusted yearto-date production through May 13, 2017 was 39,924,000 net tons, at a capability 

utilization rate of 74.3 percent. That is up 3.2 percent from the 31,912,000 net tons during 

the same period last year, when the capability utilization rate was 72.1 percent. To give 

perspective, in 2007 through the summer of 2008, domestic steel capacity utilization was 

at 87.6 percent. 

Winning relief has become the equivalent of Trade Whack-A-Mole. 

China’s massive subsidies and dumping, along with domestic policies to sustain 

and build capacity, have flooded world markets destabilizing and undermining those 

producers who must abide by free market rules. The market has been stabilized at a 

lower level of production and capacity because of the injury that has already been inflicted 

is not addressed by the orders as U.S. trade law does not address past harm. 

It is vital that any relief authorized as a result of this investigation leave in place, 

and supplement the relief provided by existing AD/CVD orders. 
 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 116 

Over the years, we have worked to get action on China’s overall policies, and 

address the anticompetitive actions of certain other countries – Russia and others – as 

well. The Steel Committee at the Organization for Economic Cooperation and 

Development (OECD) has worked to identify the problem. Last year, President Obama 

was able to get Chinese leadership to agree to participate in a Global Forum on Steel as 

part of China’s leadership in the eleventh meeting of the G-20. 

China has refused to work to define the scope of the problem beyond pointing 

fingers at others. Countries including China must come to the table for negotiations that 

result in enforceable disciplines on steel capacity with measurable, and significant, 

reductions in capacity and production. We should negotiate with an eye towards ensuring 

our existing steel capabilities be maintained and grown to meet our basic security and 

infrastructure needs. Our overall goal has never been to protect our market, but do that 

we must, if our national security is at risk. We simply cannot wait any longer while our 

steel sector and others gets downsized through repeated attacks. 

This Section 232 investigation has the potential not only to protect America’s

national security by imposing market restraints on imports from those countries causing 

the problem, but also to create the impetus for serious negotiations. A negotiated solution 

is the best approach – but not the only one. 

Mr. Chairman, the Steelworkers are a binational union with significant membership 

on both sides of the US-Canadian border. As you move forward with your assessment 

of the importance of steel to U.S. national security interests and what measures, if any, 

to implement, I hope you will focus on where the problem lies. It is not to our north, but 

to our east, west and south. Indeed, we have a trade surplus in steel with Canada. 

Products flow back and forth across our borders – often multiple times – because of 

integrated supply chains and finishing operations. 

And, from a national security perspective, Canada is one of the few countries that 

has always been there for us with no question, in my mind or in the military or intelligence 

expert’s views. Indeed, our national security and intelligence relationship with Canada 

is truly unique. We share an uncontested border. We have an intelligence sharing 

relationship known as Five Eyes (FVEY) that is limited to only five countries. We have 

the North American Aerospace Defense Command – NORAD – that has existed for more 

than sixty years that was the initial line of defense for North America during the Cold War. 

Canada has been an ally, a friend and a trusted partner. 

Canada is the only country that should be exempted from any potential action in 

the steel sector. 

But as we face increasing competitive challenges and threats to our steel sector 

Canada must also ensure that they enforce the trade laws so that steel products don’t

use their market as a way-station to enter the U.S. market and circumvent and evade our 
 

 

APPENDIX F - Page 117 

laws and our interests. I am confident that the leaders of Canada will embrace those 

efforts with the goal of sustaining and advancing our individual and joint national security 

interests. 

This testimony is not a treatise on the domestic steel sector as the Commerce 

Department’s experts have the experience and the data, to assist in your investigation. 

But, we stand ready to provide whatever assistance is appropriate as you continue this 

critical investigation and use the authority you have under the law to protect our nation’s

security. 

### 








 

APPENDIX F - Page 126 

Philip K. Bell Phone: (202) 296-1515 

President 

21st Century Steelmakers 

Statement of Philip K. Bell
 

President, Steel Manufacturers Association (SMA) 

Before the
 

U.S. Department of Commerce
 

Public Hearing in Conjunction with Section 232 Investigation 

Regarding the Effects on the National Security of Imports of Steel
 

May 24, 2017
 

1150 Connecticut Avenue, N.W. | Suite 1125 | Washington, D.C. 20036 
 

APPENDIX F - Page 127 

Good morning Secretary Ross and members of the panel. Thank you for the invitation to 

appear before you today regarding the Department’s Section 232 investigation into the national 

security effects of imported steel. 

My name is Philip Bell and I am President of the Steel Manufacturers Association 

(“SMA”). The SMA is the voice of the U.S. steelmakers that rely on electric arc furnace (EAF) 

steel manufacturing technology, which is the dominant steelmaking technology used in America. 

SMA is our country’s largest steel industry trade association – based on the actual number of 

steel producing members and the amount of steelmaking capacity represented. SMA’s 

membership contains a variety of steel producers including some of the nation’s largest 

steelmakers and employers. 

As “21st Century Steelmakers” our members utilize post-consumer recycled ferrous scrap 

as their principal feedstock, turning this waste into world-class steel. SMA’s members account 

for more than 75 percent of domestic steelmaking capacity, directly employing more than 60,000 

workers across North America, and indirectly supporting over 420,000 additional jobs. 

It is imperative to our national security that the United States have a strong, viable 

domestic steel industry with sufficient productive capacity to meet both defense and commercial 

needs. We cannot rely on foreign steel producers to arm and protect our military forces and to 

rebuild and maintain the nation’s critical infrastructure. 

Before discussing some of these threats to our industry, I want to briefly focus on the 

importance of a broad definition of national security, and steel’s role therein. 
 

 

 

 

 

 

APPENDIX F - Page 128 

Steel is critical to our national defense. But beyond direct defense applications, steel is 

an engine of economic activity and employment that is of critical importance to the United 

States. Steel connects our energy grid and utilities, powering our homes and businesses. Steel 

in pipelines delivers our abundant natural resources to consumers, empowering our 

competitiveness. Steel gives strength to the cars, trains and ships that carry our commerce to 

market over the highways, bridges, rail and waterways that are built with steel. In short, steel is 

a ubiquitous and indispensable component of the nation’s critical infrastructure and its economic 

wellbeing. 

Imports of steel, quite simply, present an existential threat to the American steel industry. 

The volumes of imported steel today have impaired demand for U.S.-produced steel, forced 

reductions in domestic production and diminished returns on capital investments. U.S. 

steelmaking production capacity utilization has hovered under 75 percent for many years. We 

believe capacity utilization of 85% is necessary to allow steelmakers to: 

•		 Ensure double digit return on capital employed; 

•		 Operate at full employment levels; 

•		 Make necessary capital investments; 

•		 Invest in research and development; and 

•		 Efficiently operate both the “hot end” (steelmaking) and “cold end” (steel 

finishing) of finished steel production. 

Not since before the 2007 global economic downturn has SMA members’ capacity utilization 

come close the 85 percent level. 
 

 

 

APPENDIX F - Page 129 

The ability of SMA’s members to meet episodic national defense requirements, and to 

improve and make necessary capital investments for tomorrow, depends entirely on today’s 

demand for their U.S. produced steel. 

SMA members are the safest, most productive and most sustainable steelmakers in the 

world. We can compete with anyone on a level playing field. The United States also has the 

world’s most open markets, and SMA supports free and fair trade. The same openness, however, 

should not be extended to illegally traded, dumped and subsidized steel. 

Over the last decade, global steelmaking capacity has grown at an unprecedented rate. 

The world’s steel consumption, however, has not kept pace, contributing to a large and 

increasing gap between global capacity and demand. Now estimated to be more than 800 million 

tons, this excess capacity – much of it propped up by illegal subsidies by foreign governments – 

strains the profitability of even the most efficient producers. 

The effect of global overcapacity has been, quite simply, to flood the U.S. market, 

typically unlawfully, with imported steel. Over the course of 2014 and 2015, import penetration 

reached historic levels, which it continues to approximate today. 

Import market penetration has come at a great price to the U.S. steel industry and the U.S. 

economy. From January 2015 through the end of 2016, steel industry employment in the U.S. 

declined by 14,400 workers. Multiple U.S. facilities remain idled or operate with significantly 

reduced work forces. Because each steel industry job supports an additional seven jobs 

throughout the supply chain, the impact is far greater. 
 

 

 

 

APPENDIX F - Page 130 

As the domestic steel industry has been weakened, tax revenues have been lost and our 

national security impaired. Using an estimated nationwide average annual steelworker income 

of $61,465, SMA estimates that the U.S. Federal Government forgoes – on average - $13,207 in 

federal income taxes for each steelworker lost to unfairly-traded imported foreign steel. For 

each 1.5 million in tons of steel imported into the United States, the Federal Government will 

forego an estimated $9,000,000 in personal income tax revenue. As applied to the 14,400 

workers lost since 2015, the Federal government has lost an estimated $190,000,000 in personal 

income tax revenues. 

With hundreds of millions of dollars in lost tax revenue the effects are being felt at the 

local, state and national level – while foreign producers continue to dedicate vast government 

resources to support their steel industries and promote exports to our market. 

SMA commends ongoing diplomatic efforts to rationally reduce global steel production 

capacity. While the United States may need to act unilaterally to ensure its steel producers and 

their workers and customers are not driven out of business by unfairly-traded imports, it is our 

hope that other like-minded countries that believe in free and fair markets and the rule of law 

will join us in these efforts to reduce over capacity. We also believe that the 232 process should 

serve as a catalyst to explore creative and meaningful remedies that deal with underselling, 

overcapacity and other market distortions that impact our entire supply chain. 
APPENDIX F - Page 131 

Again, we commend the Administration for taking this important step and we stand ready 

to work with you to find ways to address these illegal steel imports and the threats they pose to 

our national security. 

Thank you. 
 

 

APPENDIX F - Page 132 

Statement of Bill Geary
 

Chairman, Cold Finished Steel Bar Institute
 

(CFSBI)
 

President, Nelsen Steel Company
 

Public Hearing on
 

Section 232 National Security Investigation
 

Regarding Imports of Steel
 

May 24, 2017
 
 

 

 

 

 

 

 

APPENDIX F - Page 133 

Good morning Mr. Secretary and members of the panel. I am Bill Geary, Chairman, 

Cold Finished Steel Bar Institute (CFSBI) and President, Nelsen Steel Company. 

The Cold Finished Steel Bar Institute is a Washington, DC based trade association 

representing U.S. producers of cold finished steel bar. Cold finished steel bar is incorporated 

into a wide range of consumer, industrial, aerospace, and military products. Essentially any 

product that contains a motor or moving part contains one or more components made from cold 

finished steel bar. The U.S. cold finished steel bar industry produces high-quality products on an 

efficient and cost-competitive basis, using highly trained workers under environmentally sound 

conditions. 

Critical Contributions to the U.S. National Defense Made by CFSBI Members 

The following is a summary of national defense-related materials and applications 

provided by cold finished steel bar producers: 

A-10 Warthog and Apache attack helicopters Projectiles 

Shell cases Cold extruded armament shell cases 

Armored vehicles door hinge pins 

Vehicles Shafts 

Gears 

Engines 

Suspension parts 

Drive chains 

Military lockers 

Rocket fuel rods 

Grab handles 

Steering systems 

Braking systems 

Pallets/and bomb fin adaptors 

Guns Virtually every gun contains cold finished steel 

bars 

Smart bombs Cold finished bar parts 

Aircraft Numerous applications 

M-16 rounds 1060 steel for penetrator 
 

 

 

 

 

 

 

APPENDIX F - Page 134 

Cold finished steel bar producers also provide materials for civilian applications which 

provide critical supportive functions essential to the national defense and the fight against 

terrorism: 

Motor vehicles Numerous auto parts 

Transportation Airline seat parts 

Locomotive axles 

Wire ductwork for jet ramps 

Infrastructure Bridge parts 

Wire supports for concrete 

Sewer pipe parts 

Rebar tie wire 

Nails 

Wire for cement columns and barrier walls 

Power generation Bolts for wind turbines 

Wire for electrical transmission towers 

Oil & gas applications 

Mining industry applications 

The Effects of Import Competition On U.S. Cold Finished Steel Bar Producers 

Like much of the steel industry, CFSBI member companies are facing extraordinary 

challenges from foreign producers. We believe there is widespread dumping in the U.S. market. 

China and other countries have built substantial excess production capacity, frequently with 

government subsidies. We face competitors which never have to make a profit to survive, thanks 

to government handouts. 

The U.S. market for cold finished steel bar has declined precipitously. We estimate that 

within the last 45 years, the demand for cold finished steel bar in the United States has gone from 

2.5 million tons per year to about 1 million tons per year today. This reflects the loss of much of 

our U.S. customer base. Unless the underlying commercial production of cold finished steel bars 

is healthy, competitive and profitable, CFSBI companies would be unable to survive and would 

not be able to provide critical materials essential to the national defense. For this reason, we 

respectfully urge that any remedy determined in this section 232 case apply not only to the cold 
 

APPENDIX F - Page 135 

finished steel bar we produce, but also to downstream component parts made by our customers 

and are then incorporated into subassemblies. 

I will be pleased to respond to any questions you have. Thank you. 
 

APPENDIX F - Page 136 

ORAL TESTIMONY OF CHAIRMAN EDWARD VORE 

May 24, 2017 

Secretary Ross, my name is Edward Vore and I pleased to be here today in my capacity 

as the Chairman of the Committee on Pipe and Tube Imports, which is known as CPTI. I also 

serve as the CEO of ArcelorMittal Tubular Products North America, but today I am here to 

speak on behalf of CPTI and the entire U.S. pipe and tube industry. 

CPTI is the leading trade association for the steel pipe and tube industry in the United 

States. It was founded in 1984 in response to the damage being done to domestic producers by 

imported products. Regrettably, notwithstanding our organization’s efforts over three decades, 

the domestic pipe and tube industry has continued to decline as imports take more and more 

market share. 

Today, the CPTI has 40 members with 123 facilities in 32 states. Our members employ 

more than 35,000 workers across the United States. Thousands more workers are currently laid 

off, awaiting better economic conditions that would allow their employers to recall them. 

Although 2016 provided some respite for the domestic pipe and tube industry in the sense 

that imports declined from the highs of 2014 and 2015, imports still took more than half of the 

U.S. market. 2017 is not looking good. Imports are up 55 percent so far, which portends badly 

for domestic producers. 

Our industry is a critical supplier to a number of important sectors of the U.S. economy, 

including agriculture, construction, infrastructure, and manufacturing. I am here today, however, 

to underscore that a healthy pipe and tube industry is vital to the nation’s defense and security. 
 

 

APPENDIX F - Page 137 

First, pipe and tube have direct military applications such as casings for munitions and 

are also essential components of piping systems in jets, ships, military vehicles, weapons 

systems, and prefabricated buildings. 

Second, pipe and tube are critical to our nation’s energy security. Oil wells, for example, 

use pipe and tube products like drill pipe and oil country tubular goods, and both oil and natural 

gas are transported through pipelines made of line pipe. Petroleum products like gasoline – 

which is essential to virtually any military action – also are refined in facilities made almost 

entirely of pipe and tube. 

Third, pipe and tube are important to national security because they are used in the 

transmission of critical fluids and gases for fire protection, industrial production, heating and 

cooling, and water gathering systems. 

Finally, pipe and tube are an integral part of the overall steel industry. Seamless pipe and 

tube is made from steel billets, and welded pipe and tube is made from flat-rolled steel. Domestic 

pipe and tube companies tend to buy these inputs from domestic sources; foreign pipe and tube 

producers buy their steel from foreign suppliers. We estimate that domestic pipe and tube makers 

account for as much as one-third of the consumption of U.S. made hot-rolled steel. If domestic 

pipe and tube manufacturers were to go out of business, U.S. steel producers would be hard 

pressed to fill the resulting void in demand. 

The Reagan Administration recognized the importance of including pipe and tube in its 

voluntary restraint agreements, as did the second Bush Administration when crafting a safeguard 

remedy. The Trump Administration should do the same. 

According to the publication STEELBENCHMARKER, Chinese export prices for hot 

rolled steel in 2016 were $453/ton, whereas U.S. prices were $671/ton. China’s state-owned 
 

 

 

APPENDIX F - Page 138 

enterprises don’t care about profits and will continue producing at a loss in order to maintain 

production and employment. If the Administration were to limit only imports of steel itself, and 

not pipe and tube, domestic coil prices would likely increase – potentially making domestic pipe 

and tube less competitive. CPTI therefore favors a remedy for all flat rolled steel and billets 

extending to pipe and tube and associated components like couplings and nipples, as well as 

fabricated products such as pipe spools and pipe modules. 

On behalf of the nation’s makers of pipe and tube, as well as their workers, I am grateful 

for this opportunity to present you with testimony and would be pleased to answer any questions 

either now or in a written submission. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 139 

STEEL FOUNDERS’ SOCIETY OF AMERICA
 780 MCARDLE DRIVE UNIT G 

CRYSTAL LAKE, IL 60014-8155 

PHONE: 815/455-8240 

FAX: 815/455-8241 

www.sfsa.org 

Testimony from the Steel Founders’ Society of America 

Section 232 Investigation: The Effect of Steel Imports on National Security 

Submitted by: Raymond Monroe, Executive Vice President, Steel Founders’ Society of 

America, monroe@sfsa.org 

On September 9th, 2003, Amite Foundry in Amite, Louisiana poured a seven ton casting made 

with steel scrap from the World Trade Center to make the bow stem for the USS New York. 

Amite Foundry is a part of the U.S. foundry industry that manufactures thousands of custom 

designed, high performance castings ranging in size from 1 pound to 50 tons for critical sectors 

of the U.S. economy. 

On behalf of Steel Founders’ Society of America (SFSA), we appreciate this opportunity to 

provide these comments for the U.S. Department of Commerce investigation to determine the 

effects of the imports of steel on national security. 

Steel Founders’ Society of America (SFSA) is a trade association for advancing the steel casting 

industry. We are over 100 years old and since World War II have worked to develop the most 

advanced technology in steel casting production and use. 

The U.S. steel foundries have 200 plants that make over a million tons of castings each year. We 

are a part of the casting industry that supplies about 10 million tons of steel, iron, titanium, 

nickel, copper, magnesium and aluminum castings. Global competitors, primarily China, have 

taken at least 25 percent of the U.S. steel casting market. More serious than direct imports are 

the castings embedded in equipment imported from global sources. 

Since 2000, 80 steel foundries have shut their doors. Over 8,000 foundry workers have lost good 

paying jobs and these closures have reduced our capacity by 500,000 tons to 1,400,000 tons. 

Amite Foundry is one of those steel foundries that is closed. They are part of a group that 

includes Atchison Foundry in Atchison, Kansas that survived the manufacturing depression of 

the 1980s by producing the turret ring for the M1 Abrams Tank. Now Atchison is working 

with the Army to produce a cast steel armor capable of defeating IEDs but they are operating 

at less than 50% of their capacity. Their sister plant in Tacoma, Washington makes critical 

castings for the Virginia-class submarine program as the only qualified U.S. source. They are 

also operating at less than half their capacity. These poor business conditions put their plants 

at risk of closure and jeopardize their ability to supply these needed items for defense. 

These examples highlight the critical yet specialized products we make for national security. 

Around the buildings on Capitol Hill, Sivyer Steel of Bettendorf, Iowa makes the cast steel 
 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 140 

bollards for protection and Nova Precision of Auburn, Pennsylvania casts the artful custom 

tops. 

Working with the Defense Logistics Agency (DLA) since 1992, the metal casting industry has 

identified suppliers and tools for castings needed by the U.S. Department of Defense (DOD). 

Over 75 steel foundries provide more than 10,000 parts for the DOD. SFSA has worked with the 

Army to develop an affordable armor cast underbody to protect the warfighter from IEDs. We 

have also teamed up with the Air Force to make munition castings. 

As suppliers of defense parts, U.S. steel foundries need to be successful commercially in the nondefense market because defense procurement needs are volatile and sporadic. If the specialized 

U.S. production capabilities are closed because of imports, they are not available when needed 

for critical defense castings. 

To remain capable and available for Defense needs, the steel foundry industry needs viable 

commercial business. 

Unfair trading practices, U.S. economic policies, the strength of the dollar, globalization, 

regulatory burdens and foreign competition have made maintaining our businesses as reliable 

suppliers for the military challenging. We are in an extremely competitive U.S. market and are 

not afraid to compete but we cannot compete with global suppliers that are supported to gain 

dominance in the global market to eliminate our production. 

Our current system allows our global competitors to practice trade distorting behavior 

with no remedy for us as U.S. suppliers. 

Fluctuations in exchange rates have a dramatic effect on trade. The U.S. dollar is the reserve 

currency of the world. Our global competitors exploit the value of the dollar to displace U.S. 

suppliers from the market. 

Exploiting the variations of currency valuations is not included in the trade distorting 

behavior subject to our current set of rules. 

The U.S. metalcasting industry continues to face intense global competition. China is now the 

largest producer of all types of castings of any country in the world, with over 30,000 foundries. 

Chinese imports now make-up 25 percent of the U.S. marketplace imports. Like the steel mill 

industry globally, China has the capacity to make half the steel castings--five million tons--in a 

world production of ten million tons. 

Global sourcing strategies of our U.S. customers gain the benefit of a global supply chain at the 

expense of reducing the U.S. supply chain. Before the move to globalization, the U.S. had at 

least 2 qualified suppliers for every critical item. Globalization has reduced that to one. With the 

reduction of U.S. suppliers, our global competitors seek to eliminate our U.S. supply and 

establish a market dominant position that is monopolistic, especially in small specialty products. 

This behavior violates our antitrust laws but is beyond the reach of our current rules-based 

trading system. Also globalization has resulted in the acquisition of critical U.S. suppliers by 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 141 

foreign entities. This undermines our technical advantages by disseminating our technologies to 

the global suppliers of foreign parent companies. 

Globalization reduces cost by increasing the supply base but reduces the supply base in the 

U.S. and makes it more vulnerable. 

Another issue in trade is the inability to maintain and enforce the rules-based trading systems 

envisioned in our trade agreements. There are two significant challenges in our use of rulesbased trading; the inability to prosecute smaller claims of unfair, rule violating behavior and the 

inability to gain meaningful enforcement of current rules. 

Our trade remedies envision only large volume commodity product violations. For advanced 

manufacturing and high quality niche products of limited supply and market size, the U.S. trade 

remedy structure is unworkable. There are no small claims courts, no alternative complaint 

approaches, no relief for small market segments to access; no matter how egregious the 

violations. The industry needs to use this cumbersome system that provides no direct relief for 

violations even if they have spent the money to prosecute a case and were successful. Our 

system provides no solution to the modern market of small custom products traded in small 

dollar volumes in a global system. 

Trade remedies in the U.S. cost too much, take too long and provide too little benefit to 

allow our trading rules to work for niche or advanced manufactured products like steel 

castings. 

Enforcement is the other challenge. Since our trade system deals with discrete products, the 

violating party can take steps to avoid it. They can move up or down the supply chain. The 

ability to embed castings into a later product is an example. This damages not only the steel 

casting producer but also his customer. They can mislabel the product or transship through 

another country in violation of agreements. They can ship to another country and complete 

enough work to evade restrictions on the country of origin. Our enforcement is too little and too 

late to protect U.S. companies. It lacks the transparency to allow U.S. manufacturers to gain 

confidence that their interests are being protected. It provides no relief to the injured industry. 

Enforcement of our trade laws is ineffective to protect the interests of US manufacturers 

that make small volumes of valuable products and lack transparency in their application. 

Given the short time we have today and the nature of the hearing, we do not propose solutions to 

these challenges. We are happy to engage and work with you to make progress to improve this 

situation to ensure a capable and reliable supply chain for critical steel parts required for our 

nation’s security. 

Once again, thank you for the opportunity to provide comments on the significant challenges 

facing the domestic steel foundry industry against the tide of imports and unfair trade practices. 

We appreciate the administration and Commerce Department taking the time to investigate and 

determine the effects of the imports of steel on national security. If you have any questions or 

would like additional information, please do not hestiate to contact me. 
 

APPENDIX F - Page 142 

Testimony of Mark Millett, Steel Dynamics, Inc. 

Section 232 Steel Investigation Hearing – May 24, 2017 

Secretary Ross and other distinguished members of the panel. For the record, my name is 

Mark Millett, and I am the President and CEO of Steel Dynamics, Inc., known as SDI. I was one 

of the three co-founders of the company in 1994. 

Our company produced 9.3 million tons of steel in 2016 with 7,400 associates. We have 

an annual capacity of 11 million tons. Over the last five years we have made approximately two 

billion dollars of capital investments, including a 1.65 billion dollar investment on a 3.5 million 

ton plant in Mississippi, previously owned by Severstal of Russia. We are a major scrap 

company. We are also now one of the largest galvanized sheet producers, the second largest 

structurals producer, and the leading rail producer in the U.S. 

Our products are vital to our national and economic security. They go into national 

defense, military installations, transportation infrastructure, building construction, and autos. Our 

Mississippi plant is a major steel supplier to oil country tubular goods and line pipe mills in 

Texas. 

The steel import problem stems from global overcapacity that must be addressed through 

a global solution. For example, we filed antidumping and countervailing duty cases in 2015 on 

corrosion resistant sheet and cold-rolled steel. Duties of over 100 percent eliminated direct 

Chinese imports of each product by over 100,000 tons per month. However, just last month in 

April 2017, 460,000 tons of corrosion resistant sheet and 230,000 tons of cold-rolled sheet were 

imported, almost 50 percent more than before we filed the cases. In addition, more than 700,000 

tons of steel pipe and tube were imported in just April alone. 
 

APPENDIX F - Page 143 

We are playing a game of whack a mole: hit the Chinese with duties and Chinese steel 

goes to 10 other countries to become cold-rolled steel, corrosion resistant sheet, or steel pipe and 

tube. We are also seeing our market for structurals erode as massive quantities of fabricated 

structurals are imported. Big international construction companies such as Bechtel and Fluor are 

fabricating whole plants in China. Between 2013 and 2017, imports doubled from 850,000 to 1.7 

million tons, and they keep growing. 

World Steel Dynamics released a study on April 13, 2017 on the international hot-rolled 

market. I will attach it to our written comments. The study said that Chinese export prices were 

about $400 a short ton, which it stated was $100 per ton below Chinese mills cost. The study said 

that U.S. domestic prices were at $640 a ton, $240 or 60 percent higher than the Chinese export 

price. 

This is why SDI favors quotas at the 2010 or 2011 volume of imports. The U.S. and the 

rest of the world must cut off subsidized and dumped Chinese steel exports to stop this game of 

whack a mole and to get China to truly shutter excess capacity now, not five or 10 years from 

now. 

To do otherwise would truly jeopardize our national and economic security. 
APPENDIX F - Page 144 

Section 232 National Security Investigation of Steel Imports 

Testimony of Alexander Maass 

May 24, 2017 

Good morning. I am Alexander Maass, President of Maass Flange 

Corporation. I am here on behalf of the Coalition of American Flange Producers, 

its members, and employees. Thank you for the opportunity to appear before each 

of you here today. We fully support this Section 232 investigation on steel imports, 

and urge the Secretary of Commerce to find that these imports are threatening to 

impair our country’s national security, and that assertive action must be taken. 

Maass Flange Corporation is a U.S. manufacturer of stainless steel and alloy 

flanges formed 35 years ago in 1982, and we are located in Houston, Texas. Our 

products are used to strengthen and connect pipes, valves, pumps, and other 

equipment for piping systems. Maass Flange is a fully integrated forging and 

machining manufacturer, with the most diversified offering of stainless steel and 

alloy products. We offer a complete line of both small and large diameter flanges, 

in a full range of pressure classes and in various grades of material. Maass Flange, 

together with Core Pipe Products, Inc., are the founding members of the Coalition 

of American Flange Producers. We are a domestic coalition of flange 

manufacturers and produce steel flanges for numerous national security 

applications. 

1 

14107667.1 
APPENDIX F - Page 145 

Because our products are resistant to the harshest applications, they are used 

in navy ships and submarines, warfare products, aviation jet refueling systems, 

national fuel refining, chemical manufacturing plants, nuclear power reactors, 

turbine power and coal gasification generation, liquid natural gas recovery, 

aviation, aerospace, and in the submarine building industry. We also sell to 

utilities companies who use our products for the national power grid, a critical 

component of the infrastructure that protects the United States and its citizens. Our 

flanges are also used to assemble pharmaceutical equipment vital to the production 

and development of medicines that prevent and respond to epidemics. However, 

imports of steel, including stainless steel and alloy flanges, into the U.S. market 

threaten our ability to supply products for these and many other national security 

applications. 

This is why we are here today to urge Commerce to find that imported steel 

is threatening to impair the national security, and that actions such as a 

comprehensive tariff or quota system on all steel products, are needed to 

significantly restrain these imports. In our industry, imports have often entered the 

market in disruptive, massive waves at a time, rather than predictably throughout 

the year. For example, we have seen Indian producers ship substantial, year-and-ahalf supplies of stainless steel flanges to our customers over the period of a single 

2 

14107667.1 
APPENDIX F - Page 146 

quarter. But it is not just India; we see the same disruptive behavior from China, 

the Philippines, Korea, and many others. 

As these imports surge into the U.S. market, our capacity to supply our 

customers, invest, and our production, revenue, and employment numbers, suffer 

greatly. Just last month in April, Ameriforge Group Inc., another U.S. producer of 

stainless steel and alloy flanges, filed for Chapter 11 bankruptcy protection. That 

decision, we are sure, was in no small part a result of imports coming into the 

United States, and displacing American production and business. 

Moreover, the injury these imports cause our industry is confirmed by the 

existence of past antidumping duty orders on imports of stainless steel flanges 

from India and Taiwan, and by ongoing investigations. Currently, the International 

Trade Commission is in the final phase of antidumping investigations on carbon 

steel flanges from India, Italy, and Spain, and a countervailing duty investigation 

on carbon steel flanges from India. Moreover, the Department of Commerce 

recently calculated between 19 and 24.4 percent dumping margins on carbon steel 

flanges from Spain. As these investigations show, unfairly traded imports of steel 

flanges are irrationally entering the U.S. market, and have caused and are likely to 

continue causing great injury to our industry. But this is about much more than 

dumped flanges from one or two countries; imports of these products do indeed 

threaten the national security of the United States. 

3 

14107667.1 
APPENDIX F - Page 147 

The threat caused by imports is unsurprising given the global steel 

overcapacity crisis, which has undoubtedly spurred foreign overproduction in a 

range of steel products including flanges. Over the past years, it has become 

particularly evident that the imports coming in from these other countries are not 

only “second class” flange and other pipe connector products of questionable 

quality and workmanship, but they are also being sold at price levels that are 

unsustainable according to our business environment, which involves high quality 

U.S. workmanship, business ethics, and national responsibilities. With each new 

aggressive surge of imports, our ability to adequately supply flanges for national 

security applications deteriorates. The flanges we supply to the armed forces go 

into the assembly of military vessels, assisting to keep our warfighters and nation 

safe. As I mentioned earlier, they go into equipment for wind, oil, coal, natural gas, 

and nuclear energy plants. The power and energy that fuels our national security 

efforts are transmitted through pipes that are strengthened and held together by 

flanges. But steel imports competing with us in the U.S. market take opportunities 

we would otherwise have, affecting our current numbers and hindering our ability 

to innovate and invest in stronger, better products to remain competitive and 

continue supplying the best to our customers. In addition, we believe these imports 

do endanger, as President Trump said, “the jobs needed to maintain a pool of 

4 

14107667.1 
APPENDIX F - Page 148 

skilled workers essential for the continued development of advanced steel 

manufacturing.” 

Our industry also needs the Secretary to broadly define steel imports to 

include stainless steel and alloy flanges, and broadly define the scope of national 

security requirements to include critical infrastructural applications in the energy 

industry, national power grid, and pharmaceutical industry, in addition to military 

applications. 

On behalf of the Coalition of American Flange Producers, I urge Commerce 

to find that steel imports are threatening U.S. national security, and urge the 

agency to recommend aggressive, comprehensive, and concrete actions to adjust 

steel imports – including stainless steel and alloy flanges – and stop them from 

impairing the national security. 

Thank you for your time, attention, and for all your efforts in this critical 

investigation. 

5 

14107667.1 
APPENDIX F - Page 149 
APPENDIX F - Page 150 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 151 

BEFORE THE U.S. DEPARTMENT OF COMMERCE 

BUREAU OF INDUSTRY AND SECURITY
 

) 

Section 232 Investigation on the Effect of ) 

Imports of Steel on U.S. National Security ) 

) 

Oral Presentation of Joel Johnson, Chief Executive Officer, Borusan 

Mannesmann Pipe U.S. Inc. 

1. Good morning. My name is Joel Johnson. I am the Chief Executive 

Officer of Borusan Mannesmann Pipe U.S. Inc. or “BMP.” BMP is a U.S. pipe 

mill located in Baytown, Texas. We manufacture welded steel pipes, primarily 

casing for oil and gas wells, known as Oil Country Tubular Goods, or OCTG. 

2. Our pipe mill opened in 2014. The total invested capital by the 

Borusan Group in this facility is $300 million, 50 percent of which represents fixed 

assets. We intend to make further investments as long as market conditions 

continue to be favorable and no additional import restrictions are imposed. 

3. BMP employs 180 personnel in its U.S. operations. Our plan is to 

produce over 200,000 tons of OCTG in 2017. However, our facility cannot 

produce every size of OCTG used in the U.S. market. Just like most other U.S. 

OCTG producers, we fill out our product line by importing selective sizes of pipe 

that are produced by our parent in Turkey. As with other U.S. producers, these 

imports allow us to be fully competitive in the U.S. market and thus enhance the 

1
 
 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX F - Page 152 

volume of our domestic production. If we were suddenly unable to import these 

products, jobs will be threatened. 

4. While not used in national defense production, OCTG and oil and gas 

line pipe are an important element of the basic manufacturing infrastructure needed 

for domestic energy production and distribution. Expanding domestic energy 

production and increasing America’s energy independence have obvious national 

security implications. Thus, any import measures that would adversely affect these 

sectors will threaten national security by undermining U.S. energy production and 

energy independence. 

5. I would also like to bring to your attention that domestic pipe and tube 

manufacturers such as ours are consumers of flat-rolled steel. We add significant 

value added through the pipe manufacturing process. Import restrictions on these 

basic flat-rolled steel products pose the risk of undermining the domestic steel pipe 

sector by increasing costs and reducing competitiveness. Higher costs for OCTG 

and line pipe will discourage oil and gas drilling and the construction of new 

pipelines. 

6. A case in point is large-diameter line pipe. This is pipe used in large 

oil and gas pipelines such as the recently approved Keystone pipeline. U.S. health 

and safety regulations governing such pipelines require that the pipe be produced 

2
 
 

 

 

 

 

 

 

 

 

APPENDIX F - Page 153 

using high-quality, heavy gauge steel with very specific and demanding chemical 

and mechanical properties. 

7. As the U.S. pipeline operators commented in a recent proceeding 

before the Commerce Department, the U.S. line pipe industry cannot produce 

certain large diameter line pipe that is used in major pipeline projects. One reason 

is that the flat-rolled steel that meets certain required specifications cannot be 

sourced in the U.S. Furthermore, imported flat-rolled steel products that do meet 

those specifications are subject to high antidumping and countervailing duties. 

8. We have concerns about future U.S. investments in large diameter 

pipe production despite our extensive technical expertise and experience with this 

high value-added product. Any new trade barriers call into question the feasibility 

of such investments. Moreover, if high tariffs or restrictive quotas are imposed on 

imports of large diameter line pipes, critical energy infrastructure projects would 

be threatened due to the inability to source the specific pipes required in the United 

States. 

9. We believe that the Borusan Group has proven its commitment to the 

American economy. Before our investment in Texas, we imported pipe from our 

Turkish facilities. Once our investment was established, we ramped up our 

production in the U.S. and we now employ hundreds directly and indirectly by 

focusing on domestic production and strategically importing as needed. 

3
 
 

 

 

 

 

 

APPENDIX F - Page 154 

10. We do not believe further import restrictions are necessary; however, 

if the President imposes a trade restrictive measure, it should be designed to 

carefully protect those companies that have already invested in the U.S. Every 

effort should be taken to work directly with these companies to ensure that neither 

their sources of raw material supply nor their supplemental imports are 

endangered. The goal should be to encourage U.S. investment and protect the very 

companies that have demonstrated their commitment to the U.S. market. 

11. Thank you and I am prepared to answer any questions you may have. 

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APPENDIX G - Page 1 

PUBLIC COMMENTS
 

On April 26, 2017, the Department of Commerce (“the Department”) published a 

Notice Request for Public Comments and Public Hearing on Section 232 National 

Security Investigation of Imports of Steel in the Federal Register. The public 

comment period ended on May 31, 2017. The Department received 201 written 

public comment submissions. 

The public comment submissions were the following: 

1) Acenta Steel Limited
 

2) Air Distribution Institute
 

3) AK Steel
 

4) Algoma
 

5) Alliance for American Manufacturing
 

6) Allied Machine & Engineering Corporation
 

7) Altos Hornos de Mexico
 

8) American Association of Exporters and Importers
 

9) American Automotive Policy Council
 

10) American Iron and Steel Institute
 

11) American Line Pipe Producers Association
 

12) American Nickeloid Company
 

13) American Wire Producers Association
 

14) Aperam SA
 

15) Apollo Metals Limted
 

16) ArcelorMittal USA
 

17) Arundel
 

18) Association of Equipment Manufacturers
 

19) Atlas Steel Products Corporation
 

20) Autoliv
 

21) Ball Corporation
 

22) BlueScope Steel Ltd
 

23) Boker's Inc
 

24) Boltex Manufacturing Corporation
 

25) BorgWarner
 

26) Borusan Mannesmann
 

27) Brazil Steel Institute
 

28) Bridgestone Metalpha U S A
 

29) BSH Home Appliances
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX G - Page 2

30) Business & Institutional Furniture Manufacturer's Association 

31) Bway Corporation 

32) California Steel Industries 

33) Canadian Manufactureres & Exporters and Canadian Manufacturing Coalition 

34) Canadian Steel Producers Association 

35) Canam Group Inc 

36) Carpenter Technology Corporation 

37) Central Moloney Inc 

38) Charter Steel 

39) China Iron and Steel Association 

40) Coalition of American Flange Producers 

41) Coalition of Energy Equipment Manufacturers 

42) Cogent Power Inc 

43) Commercial Metals Company 

44) Committee on Pipe and Tube Imports 

45) Congressional Steel Caucus 

46) Copperweld Bimetallics LLC 

47) CPW America Co 

48) Crown Cork & Seal 

49) CSN LLC 

50) Dana Incorporated 

51) Daniel Pearson CATO 

52) Daniel R Pearson CATO Institute 

53) Dayton Rogers 

54) DB&S Steel 

55) Decra Roofing Systems 

56) Delta Star Inc 

57) Diamond Sawblades Manufacturers' 

58) Downhole Pipe Equipment LP 

59) Drill Rod & Tool Steels Inc 

60) Drinker Biddle and Reath 

61) DS Containers Inc 

62) E&E Manufacturing Co 

63) Eaton Corporation 

64) Economic Policy Institute 

65) Electrolux Home Products 

66) Eurofer 

67) Evraz North America 

68) Finarvedi SpA 

69) Finkl Steel 

Coalition 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX G - Page 3 

70)	 Forging Industry Association 

71)	 Freudenberg Sealing Technologies 

72)	 G & L Manufacturing 

73)	 Gerdau North America 

74)	 German Steel Foundation 

75)	 Grant Prideco and National Oilwell Varco 

76)	 Greater Pittsburgh Chamber of Commerce 

77)	 Greenbrier Companies 

78)	 H&T Waterbury Inc 

79)	 Hartree Partners LP Metallia Division 

80)	 Hirsh Industries 

81)	 Hitachi Metals 

82)	 Hytrol Conveyor Company 

83)	 IBEW Local 2150 Additional Signatory 

84)	 IBEW Local 2150 

85)	 Independent Pipe 

86)	 Industrial Fastener's Institute 

87)	 Institute of Scrap Recycling Industries 

88)	 International Longshore Warehouse Union Local 13 

89)	 International Longshore Warehouse Union Local 63 

90)	 International Union, United Automobile, Aerospace & Agricultural Implement 

Workers of America 

91)	 Japan Iron and Steel Federation 

92)	 Jarvis Cutting Tools 

93)	 JSW Steel 

94)	 JTEKT North America Corporation 

95)	 Kerr Pumps 

96)	 Key Knife Inc 

97)	 Kiewit Corporation 

98)	 Knife Source 

99)	 Komatsu Mining Corporation 

100)	 Korea Iron & Steel Association and various member companies 

101)	 Latin American Steel Association (Alacero) 

102)	 Law Office of Lewis Leibowitz 

103)	 Lyman Steel Company 

104)	 M7 Metals 

105)	 Magellan Corporation 

106)	 MAGNA International 

107)	 Maritime Exchange for the Delaware River and Bay Public 

108)	 Markem Imaje Corporation 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX G - Page 4 

109)	 Merfish Pipe & Supply 

110)	 Metal Flow Corporation 

111)	 Metal Partners International 

112)	 Metals 2 Go 

113)	 Metals Service Center Institute 

114)	 Metglas Amorphous 

115)	 Mexican Iron and Steel Industry 

116)	 Ministry of Commerce of China 

117)	 Mitsubishi Electric Power Products 

118)	 Motor & Equipment Manufacturers Association 

119)	 National Electrical Manufacturers Association 

120)	 National Foreign Trade Council 

121)	 Niagara Transformer Corporation 

122)	 Nippon Steel & Sumikin Inc 

123)	 Nippon Steel & Sumitomo Metal Corporation 

124)	 Nippon Yakin Kogyo 

125)	 NLMK USA 

126)	 North American Die Casting Association 

127)	 North American Tool 

128)	 Nucor Corporation 

129)	 Oil and Natural Gas Industry 

130)	 Pasha Stevedoring & Terminals L P 

131)	 Pentaflex Inc 

132)	 Pentair 

133)	 Port of Los Angeles 

134)	 Port of Vancouver USA 

135)	 Port Tampa Bay 

136)	 Power Partners Inc 

137)	 Precision Machined Products Association 

138)	 Precision Marshall Steel Company 

139)	 Precision Marshall Steel Company Belgium & France Division 

140)	 Precision Metalforming Association and National Tooling and Machining 

Association 

141)	 Rail Security Alliance 

142)	 Russel Metals 

143)	 Saha Thai Steel Pipe PCL 

144)	 Samuel Son & Co Limited 

145)	 Seilkop Industries Inc 

146)	 Senator Al Franken 

147)	 Senator Mitch McConnell and Senator Rand Paul 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX G - Page 5 

148) Senator Murray Cantwell 

149) Silgan Containers 

150) Simonds International 

151) Spectrum Brands Inc 

152) SPX Transformer Solutions, Inc 

153) SRG Global 

154) SSAB Americas 

155) SSINA 

156) Stainless Steel Tube Trade Advancement Committee 

157) Star Cutter 

158) Star Pipe Products 

159) Steel Dynamics Inc 

160) Steel Europe AG 

161) Steel Founders' Society of America 

162) Steel Manufacturer's Association 

163) Steel Tank Institute 

164) Steel Users 

165) Steel Warehouse Company 

166) Steelcase Inc 

167) Stewart and Stewart 

168) Sumitomo Corporation of Americas 

169) Ta Chen International Inc Aperam 

170) Ta Chen International Inc ArcelorMittal 

171) Tata Steel Europe 

172) Tenaris 

173) Titan Metal Service 

174) TMK IS 

175) Tool Manufacturers of New Hampshire and Wisconsin 

176) Toyota Tsusho America 

177) Transformer Manufacturers 

178) Trinity Meyer Utility Structures 

179) Truck and Engine Manufacturer's Association 

180) Tubular Synergy Group 

181) Turkish Steel Exporters' Association 

182) U.S. Tire Manufacturers Association 

183) U.S. Wheat Associates 

184) UK Steel 

185) United Association Labor Management Cooperation Committee 

186) United States Cutting Tool Institute 

187) Universal Steel Products 
 

 

 

 

 

 

 

 

APPENDIX G - Page 6 

188) Valbruna Slater Stainless Inc 

189) Valeo North America 

190) Vallourec Star 

191) Vaugh Manufacturing 

192) Vest Incorporated 

193) Vietnam Steel Association 

194) Villares Metals 

195) Voestalpine AG Austria 

196) Voestalpine AG Sweden 

197) Volkswagen Group of America Chattanooga Operations, LLC 

198) Weldbend Corporation 

199) Wheeler Metals 

200) Wind Tower Trade Coalition 

201) ZF North America, Inc 

To view any of the public comments listed, please visit: 

https://www.bis.doc.gov/232steel 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX H - Page 1 

Uses of Steel for National Defense 

The U.S. Department of Defense (DoD) has a large and ongoing need for a 

range of steel products that are used in fabricating weapons and related systems for 

the nation’s defense. DoD requirements are met by steel companies which also 

support the requirements for critical infrastructure and commercial industries. 

Navy ships require hardened steel for their exterior armor, specialized alloys 

for sensor and weapons housings, high-carbon forged steels for machinery 

components, and rolled high-tensile strength steel for hull plates and frames. 

Importantly, Navy ship hulls require steel produced from integrated steel mills. In 

addition, Army vehicle armor plating requires hard, high-carbon steel laminate, and 

vacuum melted nickel alloy sheet for recuperators on the Abrams Tank engine. Air 

Force (F-35 Joint Strike Fighter) and Navy F-18 aircraft require exotic steel alloys 

with high-strength and low weight. The Army’s Apache and other helicopters also 

utilize steel alloys. Vacuum-melted nickel alloy sheet, bar and finished forgings are 

used for engine shafts, landing gear, jet engine parts and components such as super 

precision bearings and gears. 

The single largest use of steel is for production of ships and submarines, with 

most modern submarines needing 10,000 net tons of steel. A single aircraft carrier 

requires 60,000 net tons of structural steel (see Figure H1).1 

Although U.S. Navy and Coast Guard purchases of ships decreased in recent 

years, ship procurements are expected to increase in the years ahead. According to 

the Office of Budget and Management, the Administration is preparing to increase 

the size of the military, especially the Navy (from 275 ships to an estimated 292 

ships by the end of FY 2018). 2 Some Navy officials report that the demand for ships 

could reach as high as 355, creating an increase in the demand for specialized steel 

for military purposes.3 

1	 2001 Report, note 20 (“DOD indicated that 60,000 net tons of finished steel was used in the multi-year 

construction of [the Navy aircraft carrier\ the USS Ronald Reagan”)/ 

2	 Office of Management and udget/ “2018 udget. Investing in Our National Defense”/ Fact Sheet/ The White 

House/ 

3	 U/S/ Naval Institute (USNI) News, “Moran. Navy Needs as Much !s $150 Extra to ‘Jump-Start’ Path to 355 

Ships- Would uy Mostly DDGs, SSNs, arriers,” March 22, 2017, https.//news/usni/org/2017/03/22/moran-
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX H - Page 2 

Figure H1. Weapons Systems Steel Requirements* 

Steel Usage Per Unit 

Navy Vessels 

Aircraft Carriers (excluding propulsion and armaments) 60,000 – 70,000 tons 

Amphibious Force Ships 12,000 tons 

Submarines 4,000 – 10,000 tons 

Guided Missile Destroyers 3,500 tons (steel plate) 

Ground Systems 

M-1 Abrams Tank 62 tons (approx.) 

Light Armored Vehicles 8 tons 

*Examples 

Source: American Iron and Steel Institute 

Thus, U.S. military platforms are dependent in varying degrees on U.S.-

produced steel and specialty metal. In many cases, the U.S. military relies on special 

types of steel and the U.S. steel industry’s ability to support critical defense needs. 

It is important to note, however, that this ability to meet defense requirements in turn 

depends on the continued ability of the U.S. steel industry to compete fairly in the 

commercial marketplace and maintain a financially viable domestic manufacturing 

capability. This includes the ability to have an adequately skilled workforce for 

manufacturing as well as to conduct research and development for future products. 

A continued loss of viable commercial production capabilities and related skilled 

workforce will jeopardize the U.S. steel industry’s ability to meet the full spectrum 

of defense requirements. 

A recent U.S. Army aerospace specialty steel (including stainless) sector 

report concluded that, “Maintaining a healthy domestic specialty metals industry is 

vital to U.S. security interests. Domestic manufacturing of these critical interests is 

needed in times of war. The ability of the United States to maintain leading edge 

navy-needs-additional-150b-over-next-7-years-to-get-on-355-ship-trajectory-would-buy-mostly-ddgs-ssnscarriers 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX H - Page 3 

technology in specialty metals depends on the continued existence of a healthy 

domestic manufacturing capability.”4 

The U.S. Department of Defense also has had to take specific actions to assist 

portions of the U.S. steel industry that are important for national security needs in 

part due to unique DoD requirements for which there is limited commercial demand. 

Through the Defense Production Act Title III program, which funds projects to 

“create assured, affordable and commercially viable production capabilities and 

capacities for items essential for national defense” the Department of Defense 

funded two steel programs. 

In 2008, the Defense Production Act Title III office funded a $59 million effort 

to expand domestic production capacity for low-alloy Vacuum Induction 

Melting/Vacuum Arc Re-melting steel. U.S. capacity for producing this type of steel 

(high-purity, low-alloy iron based steel) was constrained, creating unacceptable lead 

times for the Mine-Resistant Ambush-Protected (MRAP) vehicles. This steel is also 

used in bearings for jet engines, rotor shafts and heads for helicopters, flap actuators 

for fighter jets, gears in jet and helicopter transmissions, mounts and fasteners for jet 

engines and jet tail hooks. 

In 2015, the Defense Production Act Title III office also funded a $23 million 

project to enhance domestic, economically viable merchant supplier steel product 

capabilities. The aim was to improve production capability for very wide, very thick 

Navy-grade heavy alloy steel plate that is dimensionally uniform. Current 

capabilities are not sufficient to meet existing and growing demands for this type of 

steel. Steel plate is used in submarines, aircraft carriers, destroyers, helicopter 

landing decks, Army combat vehicles and tanks. 5 

Providing the wide range of steel products needed for defense requires a strong 

steel industry. As mentioned in the 2001 Report, military programs such as armored 

vehicles, aircraft, and ships represent approximately 0.03 percent of U.S. steel 

demand (peacetime requirements). These steels are not generally used in building 

4	 U/S/ !rmy !erospace Specialty Steel Sector !nalysis - U/S/ !rmy !viation and Missile Research, Development 

and Engineering enter Engineering Directorate, page 52/ July 2015/ 

5	 U/S/ Department of Defense, “Defense Production !ct. Title III,” http.//www/dpatitle3/com/dpa_db/, accessed 

May 2017/ 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX H - Page 4 

construction or consumer goods. However, when steel needs for critical 

infrastructure are included with defense needs, overall steel requirements are 

significantly higher. All remaining U.S. steel companies supply commercial and 

specialized steel for critical infrastructure and defense end-markets.6 

Steel used in defense-related products includes all five categories (flat, long, 

pipe and tube, semi-finished, stainless). The Department in the 2001 Report 

previously estimated that national defense needs for steel were 325,000 net tons of 

steel per year.7 The Department in the present investigation has seen evidence of an 

increase in national defense needs since the 2001 Report. In 2017, DoD estimates 

for U.S. steel needs is now calculated to be three percent of U.S. steel production. 

The ability of U.S. production to supply national defense needs is entirely 

dependent on the existence of commercially viable steel mills that are not dependent 

on national defense demand alone. The free market system in the United States 

requires commercially viable steel producers to meet defense needs. No company 

could afford to construct and operate a modern steel mill solely to supply defense 

needs because those needs are too diverse. To be available to supply those diverse 

national defense needs, U.S. steel mills must attract sufficient commercial (i.e., nondefense) business to support construction, operation and maintenance of production 

capacity and to support the upgrades, research and development needed to continue 

to supply defense needs in the future. 

This section summarizes briefly the depth and breadth of defense usage of 

steel across the full spectrum of the five product categories (and the nearly 800 

subcategories of steel that make up the five categories). 

1.	 Flat Products: Produced by rolling semi-finished steel through varying 

sets of rolls. Includes sheets, strips, and plates. 

Land-based vehicles such as the Bradley Fighting Vehicle, Abrams Tank, and 

the family of Light Armored Vehicles use significant tonnage of steel plate per 

6	 U/S/ Department of Defense requirements for steel would be prioritized over U/S/ civilian needs during a 

national emergency through existing authorities of the Defense Production !ct Title I and the Defense 

Prioritization and !llocation System (DP!S)/ 

7	 2001 Report at 13 and note 14/ 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX H - Page 5 

vehicle.8 In addition, steel plate is used in the bodies and propulsion systems of the 

naval fleet. 9 

Conventional and high-permeability domain-refined grain-oriented electrical 

steels (GOES) are used in cores and core assemblies for electrical transformers 

(including power transformers, switchgear, step-up, step-down, and distribution 

transformers) installed at military facilities across the United States. 

In addition, small transformers employing electrical steel are used in radar, 

ships, and some weapons systems. The availability of electrical steel meeting 

defense performance specifications is important to mission assurance and reliable 

operations. 

2.	 Long Products: Steel products that fall outside the flat products category. 

Includes bars, rails, rods, and beams. 

These products have application in a range of military systems, including 

personnel carriers, tanks, and weapons. They are instrumental in the creation of 

mechanical parts. For example, the control cables on virtually all military aircraft, 

including fighter jets and military transport planes, are produced from steel wire 

10 rope.

3. Pipe and Tube Products: Seamless or welded pipe and tube products. 

Several companies supply tubular steel products for a variety of direct defense 

needs. These military-related products include bomb shells, vehicle cylinders for 

Humvees, axles for trailers that haul M-1 tanks, 500-pound bomb rings, and 

cylinders on Patriot missile launchers.11 

8 Specialty Steel Industry of North !merica (SSIN!), www/ssina/com
	

9 Id.
	

10 Id.
	

11 Multiple U/S/ steel manufacturers
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX H - Page 6 

Seamless tubes are suitable for demanding applications where maximum 

corrosion resistance or mechanical integrity are required. Examples of defense 

applications include military aircraft, submarines, ships, nuclear equipment and fuel 

elements, and equipment used for the manufacture of special chemicals.12 

4.	 Semi-finished Products: The initial, intermediate solid forms of molten 

steel, to be re-heated and further forged, rolled, shaped, or otherwise 

worked into finished steel products. Includes blooms, billets, slabs, ingots, 

and steel for castings. 

The production of steel ingot is key to the manufacture of downstream 

products used by the DoD. Ingot is used as the basis for fabricating heavy forged 

products including ship drive shafts and pressure vessels for the defense market. 

Also, interior fittings for naval vessels including ship galleys, machinery housings 

and bulkheads, are made from steel ingot material.13 

5.	 Stainless Products: Steel products, in flat-rolled, long, pipe and tube, and 

semi-finished forms, containing at minimum 10.5 percent chromium and, 

by weight, 1.2 percent or less of carbon, offering better corrosion 

resistance than other steel. 

The U.S. carbon/alloy and specialty steel industries are vital partners to 

American defense contractors and to the Defense Department. Domestic and 

specialty metals are found in virtually every military platform, including missiles, 

jet aircraft, submarines, helicopters, Humvees® and munitions. Fighter aircraft 

engines, gears, bearings, and the fuselage also use high performance specialty steels 

and super-alloys produced by U.S. specialty steel companies.14 15 

12 The Stainless Steel Tube Trade !dvancement ommittee (SSTT!), www/ssttac/com 

13 http.//www/steel/org/the-new-steel/national-defense/aspx 

14 Specialty Steel Industry of North !merica (SSIN!), www/ssina/com 

15	 For example, Valbruna is an approved stainless steel supplier for Halliburton, Schlumberger, ombardier, 

Johnson & Johnson, Delphi !utomotive, and several other companies with significant defense contracts/ !s a 

manufacturer of stainless steel bars comprised of high-performance grades, Valbruna's steel is used in key 

defense applications such the structural components and landing gear on aircraft, gun and rifle barrels, and 

munitions casings/ (Valbruna Slater Stainless, Inc/) 
 

 

 

 

APPENDIX I - Page 1 

Uses of Steel for Critical Infrastructure 

Pursuant to Presidential Policy Directive 21 (PPD-21), there are 16 

designated critical infrastructure sectors in the United States, many of which use 

high volumes of steel (see Figure I1).1 

Figure I1. DHS Critical Infrastructure Sectors – Use of Steel 

Sectors Steel End-Uses 

1. Chemical Production Centrifuges, Conduit, Fire Suppression, Flange 

Heaters, Incubators, Piping, Stainless Steel 

Heaters, Storage Tanks, Safety Showers 

2. Commercial Facilities Structural Beams, Electrical Conduit, Kitchen 

Equipment, Elevators, Escalators, Waste Pipes, 

Metal Framing and Studs, Machinery, Valves, 

Manufacturing Plants, Chemical Processing 

Plants 

3. Communications Antennas, Radio/TV Antenna Masts, and 

Transmissions Towers, Tower Cables 

4. Critical Manufacturing Blast Furnaces, Rolling Mills, Extrusion, Casting, 

Forging Production Plants; Fabrication Facilities 

(i.e. Bend, Cut, Mold, and Stamp steel materials). 

Specialty Metals Production (i.e. Stainless Steel, 

Alloy Steel, Magnetic/Electronic, High Strength 

Alloy Steel, Carbon Steel), Plates, Hot Rolled 

Round Bar, Cold Finished Steel Bars, Steel Wire, 

Rebar 

5. Dams Reinforced Dams and Reservoirs (Rebar, Piping, 

Structural Supports, Flood Gates, Water Release 

Gates and Valves, Turbine Supports) 

6. Defense Industrial Base Armored Personnel Carriers, Heavy Weapons 

(i.e. Cannon, Machine Guns, Missiles), Humvees, 

Jet Aircraft, Submarines, Munitions, Aircraft 

Engines, Fighting Vehicles, Tanks, Ship Propulsion 

Systems 

7. Emergency Services Ambulances, Fire Trucks, Helicopters, 

Portable/Temporary Shelters 

8. Energy Petroleum Refineries (i.e. Specialty Pipe, Valves, 

Fittings), Oil and Gas Pipelines (i.e. Steel Plate, 

Heavy Gauges), Storage Tanks, Electricity Power 

Generating Plants, Electric Power Transmission 

Towers, Power Distribution Grids and Stations, 

Transformers, Utility Distribution Poles, 

Transformer Cores, Wind Turbines 

D͏κ̳νϋΦ͏Χϋ ή͙ HήΦ͏Π̳Χ͋ Ώ͏́ϦνΎϋϸΆ ΏνΎϋΎ̳́Π ͠Χ͙ν̳ρϋνϦ́ϋϦν͏ Ώ͏́ϋήνρΆ͟ ΋ϋϋκρΈ//ςςςΉ͋΋ρΉ΁ήρ/́νΎϋΎ̳́Π-ΎΧ͙ν̳ρϋνϦ́ϋϦν͏ 

ρ͏́ϋήνρ (̳́́͏ρρ͏͋ ͵̳ϸ 2017)Ή 

1 
 

 

 

APPENDIX I - Page 2 

9. Financial Services Steel Safes, Bank Vaults, Lockers, Armored 

Trucks, Building Doors and Barriers 

10. Food and Agriculture Canned Goods, Harvesters, Mechanical Planters, 

Balers, Tractors, Storage Silos, Partitions, Gates, 

Watering Systems, Fencing Systems (i.e. Gates, 

Barb Wire, Posts) 

11. Government Facilities Structural Steel, Elevators/Escalators, Furniture, 

Piping, Vehicle, Barriers, Vault Doors, Barracks, 

Storage Buildings, Shelving, Records Storage, 

Fences 

12. Health Care/Public Health Elevators/Escalators, Hospital Framing, Structural 

Supports, Roofing, Operating Tables, Furniture, 

Wheel Chairs, Bed Frames, Waste Pipes and Fire 

Suppression Pipe, Medical Devices (i.e. Drug 

Delivery Needles, Surgical Pins and Screws) 

13. Information Technology Data Center Cooling Systems, Data Center 

Structural Supports, Electronic System Racks, 

Electrical Conduit, System Cabinets, 

14. Nuclear Reactors, Materials, and Waste Sector Structural Steel, Pressurizers, Reactor Pressure 

Vessels, Safety Water Tanks, Containment 

Vessels, Primary Pumps and Steam Water Lines, 

Steam Generator Components, Cooling Towers, 

Overhead Cranes for Reactor Maintenance. 

15. Transportation Systems Airports, Aircraft, Bridges, Highways, Railroads, 

Mass Transit Systems, Seaports, Navigation 

Systems, Shipbuilding, Trucks, Trailers, Boats, 

Ships 

16. Water and Waste 

Water Systems 

Water Distribution Pipes, Storage Tanks and 

Towers, Valves, Storm Water Distribution (i.e. 

Culverts, Flood Control Gates), Waste Water and 

Sewage Treatment Facilities 

Note: Presidential Policy Directive (PPD-21) on Critical Infrastructure Security and Resilience, issued in 

February 2013, identified 16 industrial sectors. See: https://www.dhs.gov/critical-infrastructure-sectors. 

Source: Bureau of Industry and Security, multiple industrial references, 

http://www.ssina.com/news/releases/pdf_releases/steel_and_national_defense_0107.pdf 

These 16 sectors require reliable supplies of steel for new construction as well 

as maintenance and repairs.2 

EΧ͋-Ϧρ͏ Φ̳νΝ͏ϋρ ͙ήν ΙΉΏΉ ρϋ͏͏ΠΈ !́́ήν͋ΎΧ΁ ϋή !͠Ώ͠ ΎΧ͋Ϧρϋνϸ ρϋ̳ϋΎρϋΎ́ρ ̳̀ήϦϋ ͏Χ͋ Ϧρ͏ Φ̳νΝ͏ϋρ ͙ήν ΙΉΏΉ ρϋ͏͏Π 

ρ΋ΎκΦ͏Χϋρ ΎΧ 2015Ά ϋ΋͏ Φ̳ΚήνΎϋϸ (2/3) ή͙ ΙΉΏΉ κνή͋Ϧ́͏͋ ρϋ͏͏Π ΦΎΠΠ κνή͋Ϧ́ϋρ ς͏ν͏ ρήΠ͋ ̀ϸ ρϋ͏͏Π ́ήΦκ̳ΧΎ͏ρ ͋Ύν͏́ϋΠϸ 

ϋή ͏Χ͋ Ϧρ͏ Φ̳νΝ͏ϋρΉ ήΧρϋνϦ́ϋΎήΧ ́ήΧρϦΦ͏͋ ̳κκνήϷΎΦ̳ϋ͏Πϸ 42 κ͏ν́͏Χϋ ή͙ ρϋ͏͏Π ρ̳Π͏ρΉ ͠Χ͙ν̳ρϋνϦ́ϋϦν͏ ̳Χ͋ 

́ήΦΦ͏ν́Ύ̳Π ́ήΧρϋνϦ́ϋΎήΧ κνήΚ͏́ϋρ ΎΧ́ν͏̳ρ͏ ϋ΋͏ ͋͏Φ̳Χ͋ ͙ήν ρϋνϦ́ϋϦν̳Π ρϋ͏͏Π ̳Χ͋ ́Ϧϋ Π͏Χ΁ϋ΋ κΠ̳ϋ͏ρΉ Ε΋͏ 

̳ϦϋήΦήϋΎρ͏ Φ̳νΝ͏ϋ ́ήΦκνΎρ͏ρ 27 κ͏ν́͏Χϋ ή͙ ΙΉΏΉ ρ̳Π͏ρΉ !ϦϋήΦήϋΎρ͏ Ύρ ϋ΋͏ Π̳ν΁͏ρϋ Φ̳νΝ͏ϋ ̳́ϋ͏΁ήνϸ ͙ήν ρ΋͏͏ϋ 

κνή͋Ϧ́ϋρ ̳Χ͋ Ύρ ̳Πρή ΎΧ́ν͏̳ρΎΧ΁Πϸ ϋ΋͏ Φ̳νΝ͏ϋ ͙ήν ΋Ύ΁΋ ρϋν͏Χ΁ϋ΋ ρϋ͏͏ΠρΉ ͼϋ΋͏ν Ν͏ϸ Φ̳νΝ͏ϋρ ΎΧ́ΠϦ͋͏ Φ̳́΋ΎΧ͏νϸ (9 

κ͏ν́͏Χϋ)Ά ́ήΧϋ̳ΎΧ͏νρ (4 κ͏ν́͏Χϋ)Ά ̳Χ͋ κΎκ͏ ̳Χ͋ ͏Χ͏ν΁ϸ (7 κ͏ν́͏Χϋ) ̀ϸ ς͏Ύ΁΋ϋ ͙ήν ρ̳Π͏ρΉ 

2 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX I - Page 3 

The Department found that demand for steel in critical industries has increased 

since the Department’s last investigation in 2001. The 2001 Report determined that 

there were 33.68 million tons of finished steel consumed per year in critical 

industries in the United States based on 1997 data. The Department updated that 

analysis for this report using 2007 data (the latest available) and determined that 54 

million metric tons of steel is being consumed in critical industries, an increase of 

63 percent.

3 

Potential disruptions in adequate supplies of needed steel products could 

impair critical infrastructure sectors such as: 

a.	 Transportation: bridges (over 600,000 bridges), tunnels, national 

highway system, railcars and tracks, ports, airport runways and 

facilities (19,000 U.S. airports) 

b.	 Energy: petroleum and natural gas pipelines, offshore oil/gas 

platforms, electric power generation (over 6,000 power plants), 

refineries, and nuclear facilities (99 units) 

c.	 Water treatment: community drinking water systems (155,000 

public drinking water systems)4 , wastewater treatment and 

management facilities (16,000 publicly owned wastewater treatment 

systems)5 . 

There is a large and ongoing need for a range of steel products that are used 

in supporting critical infrastructure in the United States. These products include all 

five categories (flat, long, pipe and tube, semi-finished, and stainless steel) that are 

produced by U.S. integrated and mini-mill steel companies. Uses include: 

3 Ϧν͏̳Ϧ ή͙ ͠Χ͋Ϧρϋνϸ ̳Χ͋ Ώ͏́ϦνΎϋϸ ̳Χ̳ΠϸρΎρ ή͙ Ϧν͏̳Ϧ ή͙ ÉήΧήΦΎ́ !Χ̳ΠϸρΎρΆ !ΧΧϦ̳Π ͠ΧκϦϋ-ͼϦϋκϦϋ !́́ήϦΧϋρ ή͙ ϋ΋͏ 

ΙΉΏΉ ÉήΧήΦϸΆ 2007 ̳͋ϋ̳Ή 

4 ΙΉΏΉ D͏κ̳νϋΦ͏Χϋ ή͙ H͏̳Πϋ΋ ̳Χ͋ HϦΦ̳Χ Ώ͏νρΎ́͏ρΆ ͏Χϋ͏ν ͙ήν DΎρ͏̳ρ͏ ήΧϋνήΠ ̳Χ͋ Έν͏ρ͏ΧϋΎήΧΆ DνΎΧΝΎΧ΁ Υ̳ϋ͏ν 

5 ΙΉΏΉ EΧρΎνήΧΦ͏Χϋ̳Π Ένήϋ͏́ϋΎήΧ !΁͏Χ́ϸΆ ͼ͙͙Ύ́͏ ή͙ Υ̳ρϋ͏ ̳Χ͋ ͵̳Χ̳΁͏Φ͏ΧϋΆ 1996Ή 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX I - Page 4 

1.	 Flat Products: Produced by rolling semi-finished steel through varying 

sets of rolls. Includes sheets, strips, and plates. Used most often in the 

automotive, tubing, appliance, and machinery manufacturing sectors. 

Similar to defense, flat steel products have a wide range of applications in 

commercial and industrial systems. Plate products find application in a variety of 

places, such as storage tanks, ships and railcars, and large diameter pipe and 

machinery parts. 

In the commercial sector steel plate is used for offshore drilling rigs, 

construction and mining equipment, bridges, tool and die production, and petrochemical applications. 

Pipelines, the mode by which petroleum and natural gas is most often 

delivered to refineries and then on to consumers, are made from technically 

demanding steel plate in wide and very heavy gauges.6 

The electrical grid of the United States relies on the availability specially 

engineered conventional and high-permeability flat electrical steel. Domain-refined 

grain-oriented electrical steels (GOES) is the key component of cores and core 

assemblies in electrical transformers used to control the distribution of electricity. 

GOES is used in both the large step-up transformers that power the electrical 

grid by enabling the transport of electricity over great distances and in smaller stepdown transformers that power individual neighborhoods and businesses.7 

Non-oriented electrical steel (NOES) is also critical for the electrical grid, 

because it is the used to make the large cores for electrical power generators. In 

addition, NOES is used in industrial applications and motors for hybrid and electric 

automobiles. Importantly, there is today only one remaining domestic producer of 

GOES and NOES in the United States: AK Steel. It is also the only producer of 

these products in North America.8 

6 !Φ͏νΎ̳́Χ ͠νήΧ ̳Χ͋ Ώϋ͏͏Π ͠ΧρϋΎϋϦϋ͏ (!͠Ώ͠)Ά ςςςΉρϋ͏͏ΠΉήν΁ 

7 !͠Ώ͠ 

8 !͠Ώ͠ 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX I - Page 5 

2.	 Long Products: Steel products that fall outside the flat products category. 

Includes bars, rails, rods, and beams. Used in many sectors but most 

commonly in construction. 

Long products have application in a range of industries and are frequently 

used in transportation, including commercial aircraft, automobiles, trucks, and 

railroads. Special bar quality (SBQ) and cold-finished bars also are used to reinforce 

concrete in roads and bridges. Another important application is oil and gas drilling, 

production and transmission in the energy sector.9 

3.	 Pipe and Tube Products: Either seamless or welded pipe and tube 

products. Used in many sectors but most commonly in construction and 

energy sectors. 

The availability of high-performance steel pipe and tube is critical to oil well 

drillers, pipeline operators and refineries. Steel pipe and tube is used to extract, 

process, and transport petroleum products that are essential for the day-to-day 

functioning of the U.S. economy.10 In fact, steel line pipe is required for pipeline 

systems that require high pressure or operate in harsh environments (e.g., sub-sea 

pipelines). The installation of deep water and ultra-deep water pipeline construction 

carries greater risk in terms of pipeline failure, installation safety, environmental 

impact and life cycle cost. Transmission pipelines, which are typically large 

diameter, use low-carbon steels or low-alloy steels because of their strength, 

toughness, ductility, and weldability. In construction, steel pipe is used for structural 

support, fire suppression, waste-water handling, railings, and other applications. 

4.	 Semi-finished Products: The initial, intermediate solid forms of molten 

steel, which are re-heated and further forged, rolled, shaped, or otherwise 

worked into finished steel products. Includes blooms, billets, slabs, ingots, 

and steel for castings. 

9 !͠Ώ͠ ΋ϋϋκΈ//ςςςΉρϋ͏͏ΠΉήν΁/ϋ΋͏-Χ͏ς-ρϋ͏͏Π/ 

10 ήΦΦΎϋϋ͏͏ ήΧ ΈΎκ͏ ̳Χ͋ ΕϦ̀͏ ͠Φκήνϋρ 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX I - Page 6 

The supply of semi-finished steel products is essential to the operation of 

many U.S. industrial sectors that require unique parts and systems fabricated from 

steel. Steel slab is used in the fabrication of pressure vessels for the commercial 

nuclear and petrochemical industries. In addition, it is used in commercial ship 

building and construction. Likewise, fabricators also rely on a ready supply of 

ingots that are needed for forging and casting operations.11 

5.	 Stainless Products: Steel products, in flat-rolled, long, pipe and tube, and 

semi-finished forms, containing at minimum 10.5 percent chromium and, 

by weight, 1.2 percent or less of carbon, offering better corrosion 

resistance than other steel. 

The stainless steel sector of the U.S. industry provides a significant portion of 

the high technology, high value steel used for a variety of critical infrastructure enduses. 

Stainless steel tubing is used in a wide range of commercial settings and in 

defense systems. Applications include: auto exhaust systems, industrial gas lines, 

water systems, aircraft systems, heat exchangers, petrochemical facilities, hydraulic 

lifts and other systems using hydraulic fluid. 

Pipe products fabricated from stainless steel are used across industry, 

including for: breweries, dairies, oil and gas processing, pharmaceutical plants, 

power plants, paper mills, synthetic fiber production, and ships. Stainless steel 

products also are employed in nuclear power plants, including: sleeves for fuel rods, 

heat transfer tubes, reactor vessel components, and other uses. 

11 !ν́͏Πήν͵Ύϋϋ̳Π ΙΏ! 
APPENDIX J - Page 1 

U.S. Government Steel Measures and Actions 

U.S. Government Steel Measures and Actions 

Year/ 

Admin. 

Measure/ 

Initiative Coverage Characteristics End Date 

U.S. Steel 

Finished 

Import 

Penetration 

1968 Voluntary 

Restraint AgreeJapan and the 

Sought by European producers facing 

antidumping (AD)/countervailing duty 

Renegotiated 18% 

Johnson ments (VRAs) European 

Community 

(EC) 

(CVD) tariffs 

1972 

Nixon 

VRAs Japan and 

the EC 

Renegotiation of 1968 VRAs; ended with 

1974 market recovery 

1974 19.3% 

1978 Trigger Price 

Mechanism 

Japan and 

the EC 

Established minimum “fair” import price; 

imports below this price subject to “fast 

Revised 21.1% 

Carter (TPR) track” trade remedy investigation, selfinitiated by the USG 

1980 

Carter 

TPR Japan and 

the EC 

Revised TPR which raised trigger price 

and enhanced auditing and monitoring 

1981 15.5% 

1981 USG Self- EU Initiated pursuant to the existing trigger Settled in 1982 19.9% 

Initiates 7 price mechanism which allowed for self- with the 

Reagan AD/CVD initiation if imports below fair price voluntary 

investigations restraint 

agreements 

1982 VRAs EC Sought by European producers facing 

AD/CVD tariffs 

Renegotiated 

and expanded to 

16.6% 

Reagan include more 

countries 

1984 VRAs 19 countries 

and the EC 

-Tailored to each country and involved 

market share agreements and quotas 

1992 26.4% 

Reagan 

-AD/CVD petitions withdrawn by industry 

-Tied to a steel industry commitment to 

modernize and provide retraining for 

workers 

1989 Pursuit of a 

Multilateral Steel 

Global -Efforts launched to negotiate a global 

agreement to abolish subsidies in exchange 

N/A; agreement 

not reached 

George Agreement for an end to the VRAs 

H.W. 

Bush 15.8% 
 

APPENDIX J - Page 2 

U.S. Government Steel Measures and Actions 

U.S. Government Steel Measures and Actions (Continued) 

Year/ 

Admin. 

Measure/ 

Initiative Coverage Characteristics End Date 

U.S. Steel 

Finished 

Import 

Penetration 

1999 

Clinton 

Steel Action Plan Global -Enhanced engagement with trading 

partners to cut steel imports 

-Tax relief for steel companies and 

financial adjustment for out-of-work 

steelworkers 

-Vigorous enforcement of AD/CVD 

-DOC Global Steel Report 

-Improved steel monitoring 

N/A 21.6% 

1999 

Clinton 

Comprehensive 

Steel Agreement 

with Russia Russia Terms of the agreement reduced by 64 

percent overall imports of Russian steel 

from 1998 levels and established minimum 

pricing 

2004 21.6% (all steel 

imports; not 

specific to 

Russia) 

2000 

Clinton 

Global Section 

201 Safeguards 

on Certain Wire 

Rod and Line 

Pipe 

Global -Based on a petition brought by the U.S. 

industry, tariffs ranged from 10 to 19%, 

phased out over 3 years. 

-The duties affected only those imports that 

exceeded 1998 import levels. 

2003 22.3% (all steel 

imports; not 

specific to line 

pipe and wire 

rod) 

2002 

George 

W. Bush 

Global Section 

201 Safeguards 

on most steel 

products 

Global, with 

exclusions 

(e.g., FTA 

partners, 

short supply) 

Tariffs on most producers and tariff rate 

quotas on slab (along with a process for 

exclusions) 

-Enhanced Import Monitoring 

-Multilateral efforts to address excess 

capacity and steel subsidies in the OECD 

2004 20.4% 
 

 

 

 

 

 

 

 

 

 

 

Appendix K - Page 1 

Steel Antidumping and Countervailing Duty Orders in Effect as of January 11, 2018 

Country Product/Country CaseNo Order Date Steel Product 

Category 

Grade 

Australia Certain HotͲRolled Steel Flat Products/Australia A602807 10/3/2016 Flat Carbon/Alloy 

Austria Certain Carbon & Alloy Steel CutͲtoͲLength Plate/Austria A433812 5/25/2017 Flat Carbon/Alloy 

Belarus Steel Concrete Reinforcing Bars/Belarus A822804 9/7/2001 Long Carbon/Alloy 

Belgium Certain Carbon & Alloy Steel CutͲtoͲLength Plate/Belgium A423812 5/25/2017 Flat Carbon/Alloy 

Belgium Stainless Steel Plate In Coils/Belgium A423808 5/21/1999 Flat Stainless 

Brazil Carbon & Alloy Steel Wire Rod/Brazil A351832 10/29/2002 Long Carbon/Alloy 

Brazil Carbon & Alloy Steel Wire Rod/Brazil (CVD) C351833 10/22/2002 Long Carbon/Alloy 

Brazil Certain Carbon and Alloy Steel CutͲtoͲLength Plate/Brazil A351847 2/1/2017 Flat Carbon/Alloy 

Brazil Certain ColdͲRolled Steel Flat Products/Brazil A351843 9/20/2016 Flat Carbon/Alloy 

Brazil Certain ColdͲRolled Steel Flat Products/Brazil (CVD) C351844 9/20/2016 Flat Carbon/Alloy 

Brazil Certain HotͲRolled Steel Flat Products/Brazil A351845 10/3/2016 Flat Carbon/Alloy 

Brazil Certain HotͲRolled Steel Flat Products/Brazil (CVD) C351846 10/3/2016 Flat Carbon/Alloy 

Brazil Circular Welded NonͲAlloy Steel Pipe/Brazil A351809 11/2/1992 Pipe and Tube Carbon/Alloy 

Brazil Stainless Steel Bar/Brazil A351825 2/21/1995 Long Stainless 

China Carbon and Certain Alloy Steel Wire Rod/PRC A570012 1/8/2015 Long Carbon/Alloy 

China Carbon and Certain Alloy Steel Wire Rod/PRC (CVD) C570013 1/8/2015 Long Carbon/Alloy 

China Certain Carbon & Alloy Steel CutͲtoͲLength Plate/PRC A570047 3/20/2017 Flat Carbon/Alloy 

China Certain Carbon & Alloy Steel CutͲtoͲLength Plate/PRC (CVD) C570048 3/20/2017 Flat Carbon/Alloy 

China Certain ColdͲRolled Steel Flat Products/PRC A570029 7/14/2016 Flat Carbon/Alloy 

China Certain ColdͲRolled Steel Flat Products/PRC (CVD) C570030 7/14/2016 Flat Carbon/Alloy 

China Circular Welded Austenitic Stainless Pressure Pipe/PRC A570930 3/17/2009 Pipe and Tube Stainless 

China Circular Welded Austenitic Stainless Pressure Pipe/PRC (CVD) C570931 3/19/2009 Pipe and Tube Stainless 

China Circular Welded CarbonͲQuality Steel Line Pipe/PRC A570935 5/13/2009 Pipe and Tube Carbon/Alloy 

China Circular Welded CarbonͲQuality Steel Line Pipe/PRC (CVD) C570936 1/23/2009 Pipe and Tube Carbon/Alloy 

China Circular Welded CarbonͲQuality Steel Pipe/PRC A570910 7/22/2008 Pipe and Tube Carbon/Alloy 

China Circular Welded CarbonͲQuality Steel Pipe/PRC (CVD) C570911 7/22/2008 Pipe and Tube Carbon/Alloy 

China CorrosionͲResistant Steel Products/PRC A570026 7/25/2016 Flat Carbon/Alloy 

China CorrosionͲResistant Steel Products/PRC (CVD) C570027 7/25/2016 Flat Carbon/Alloy 

China CutͲtoͲLength Carbon Steel Plate/PRC A570849 11/3/2003 Flat Carbon/Alloy 

China HotͲRolled Carbon Steel Flat Products/PRC A570865 11/29/2001 Flat Carbon/Alloy 

China LightͲWalled Rectangular Pipe & Tube/PRC A570914 8/5/2008 Pipe and Tube Carbon/Alloy 

China LightͲWalled Rectangular Pipe & Tube/PRC (CVD) C570915 8/5/2008 Pipe and Tube Carbon/Alloy 

China NonͲOriented Electrical Steel/PRC A570996 12/3/2014 Flat Carbon/Alloy 

China NonͲOriented Electrical Steel/PRC (CVD) C570997 12/3/2014 Flat Carbon/Alloy 

China Oil Country Tubular Goods/PRC A570943 5/21/2010 Pipe and Tube Carbon/Alloy 

China Oil Country Tubular Goods/PRC (CVD) C570944 1/20/2010 Pipe and Tube Carbon/Alloy 

China Prestressed Concrete Steel Rail Tie Wire/PRC A570990 6/24/2014 Long Carbon/Alloy 

China Seamless C&A Steel Standard, Line & Pressure Pipe/PRC A570956 11/10/2010 Pipe and Tube Carbon/Alloy 

China Seamless C&A Steel Standard, Line & Pressure Pipe/PRC (CVD) C570957 11/10/2010 Pipe and Tube Carbon/Alloy 

China Stainless Steel Sheet and Strip/PRC A570042 4/3/2017 Flat Stainless 

China Stainless Steel Sheet and Strip/PRC (CVD) C570043 4/3/2017 Flat Stainless 

China Steel Concrete Reinforcing Bars/PRC A570860 9/7/2001 Long Carbon/Alloy 

France Certain Carbon & Alloy Steel CutͲtoͲLength Plate/France A427828 5/25/2017 Flat Carbon/Alloy 

Germany Certain Carbon & Alloy Steel CutͲtoͲLength Plate/Germany A428844 5/25/2017 Flat Carbon/Alloy 

Germany NonͲOriented Electrical Steel/Germany A428843 12/3/2014 Flat Carbon/Alloy 

Germany Small Diameter Seamless Carbon and Alloy Steel Standard, Line, and Pressure Pipe/Germany A428820 8/3/1995 Pipe and Tube Carbon/Alloy 

India Certain ColdͲRolled Steel Flat Products/India A533865 9/20/2016 Flat Carbon/Alloy 

India Certain ColdͲRolled Steel Flat Products/India (CVD) C533866 9/20/2016 Flat Carbon/Alloy 

India CorrosionͲResistant Steel Products/India A533863 7/25/2016 Flat Carbon/Alloy 

India CorrosionͲResistant Steel Products/India (CVD) C533864 7/25/2016 Flat Carbon/Alloy 

India CutͲtoͲLength CarbonͲQuality Steel Plate/India A533817 2/10/2000 Flat Carbon/Alloy 

India CutͲtoͲLength CarbonͲQuality Steel Plate/India (CVD) C533818 2/10/2000 Flat Carbon/Alloy 

India HotͲRolled Carbon Steel Flat Products/India A533820 12/3/2001 Flat Carbon/Alloy 

India HotͲRolled Carbon Steel Flat Products/India (CVD) C533821 12/3/2001 Flat Carbon/Alloy 

India Oil Country Tubular Goods/India A533857 9/10/2014 Pipe and Tube Carbon/Alloy 

India Oil Country Tubular Goods/India (CVD) C533858 9/10/2014 Pipe and Tube Carbon/Alloy 

India Stainless Steel Bar/India A533810 2/21/1995 Long Stainless 

India Stainless Steel Wire Rod/India A533808 12/1/1993 Long Stainless 

India Welded Carbon Steel Pipe & Tube/India A533502 5/12/1986 Pipe and Tube Carbon/Alloy 

India Welded Stainless Pressure Pipe/India A533867 11/17/2016 Pipe and Tube Stainless 

India Welded Stainless Pressure Pipe/India (CVD) C533868 11/17/2016 Pipe and Tube Stainless 

Indonesia Carbon & Alloy Steel Wire Rod/Indonesia A560815 10/29/2002 Long Carbon/Alloy 

Indonesia CutͲtoͲLength CarbonͲQuality Steel Plate/Indonesia A560805 2/10/2000 Flat Carbon/Alloy 

Indonesia CutͲtoͲLength CarbonͲQuality Steel Plate/Indonesia (CVD) C560806 2/10/2000 Flat Carbon/Alloy 

Indonesia HotͲRolled Carbon Steel Flat Products/Indonesia A560812 12/3/2001 Flat Carbon/Alloy 

Indonesia HotͲRolled Carbon Steel Flat Products/Indonesia (CVD) C560813 12/3/2001 Flat Carbon/Alloy 

Indonesia Steel Concrete Reinforcing Bars/Indonesia A560811 9/7/2001 Long Carbon/Alloy 

Italy Certain Carbon & Alloy Steel CutͲtoͲLength Plate/Italy A475834 5/25/2017 Flat Carbon/Alloy 
 

 

 

 

 

 

 

 

 

Appendix K - Page 2 

Steel Antidumping and Countervailing Duty Orders in Effect as of January 11, 2018 

Country Product/Country CaseNo Order Date Steel Product 

Category 

Grade 

Italy CorrosionͲResistant Steel Products/Italy A475832 7/25/2016 Flat Carbon/Alloy 

Italy CorrosionͲResistant Steel Products/Italy (CVD) C475833 7/25/2016 Flat Carbon/Alloy 

Japan Carbon & Alloy Seamless Standard, Line & Pressure Pipe (Over 4.5 Inches)/Japan A588850 6/26/2000 Pipe and Tube Carbon/Alloy 

Japan Carbon & Alloy Seamless Standard, Line & Pressure Pipe (Under 4.5 Inches)/Japan A588851 6/26/2000 Pipe and Tube Carbon/Alloy 

Japan Certain Carbon & Alloy Steel CutͲtoͲLength Plate/Japan A588875 5/25/2017 Flat Carbon/Alloy 

Japan Certain ColdͲRolled Steel Flat Products/Japan A588873 7/14/2016 Flat Carbon/Alloy 

Japan Certain HotͲRolled Steel Flat Products/Japan A588874 10/3/2016 Flat Carbon/Alloy 

Japan Clad Steel Plate/Japan A588838 7/2/1996 Flat Carbon/Alloy 

Japan DiffusionͲAnnealed, NickelͲPlated, FlatͲRolled Steel Products/Japan A588869 5/29/2014 Flat Carbon/Alloy 

Japan NonͲOriented Electrical Steel/Japan A588872 12/3/2014 Flat Carbon/Alloy 

Japan Stainless Steel Bar/Japan A588833 2/21/1995 Long Stainless 

Japan Stainless Steel Sheet & Strip In Coils/Japan A588845 7/27/1999 Flat Stainless 

Japan Stainless Steel Wire Rod/Japan A588843 9/15/1998 Long Stainless 

Japan Steel Concrete Reinforcing Bar/Japan A588876 7/14/2017 Long Carbon/Alloy 

Japan Tin Mill Products/Japan A588854 8/28/2000 Flat Carbon/Alloy 

Japan Welded Large Diameter Line Pipe/Japan A588857 12/6/2001 Pipe and Tube Carbon/Alloy 

Latvia Steel Concrete Reinforcing Bars/Latvia A449804 9/7/2001 Long Carbon/Alloy 

Malaysia Welded Stainless Pressure Pipe/Malaysia A557815 7/21/2014 Pipe and Tube Stainless 

Mexico Carbon & Alloy Steel Wire Rod/Mexico A201830 10/29/2002 Long Carbon/Alloy 

Mexico Circular Welded NonͲAlloy Steel Pipe/Mexico A201805 11/2/1992 Pipe and Tube Carbon/Alloy 

Mexico Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes/Mexico A201847 9/13/2016 Pipe and Tube Carbon/Alloy 

Mexico LightͲWalled Rectangular Pipe & Tube/Mexico A201836 8/5/2008 Pipe and Tube Carbon/Alloy 

Mexico Prestressed Concrete Steel Rail Tie Wire/Mexico A201843 6/24/2014 Long Carbon/Alloy 

Mexico Steel Concrete Reinforcing Bar/Mexico A201844 11/6/2014 Long Carbon/Alloy 

Moldova Carbon & Alloy Steel Wire Rod/Moldova A841805 10/29/2002 Long Carbon/Alloy 

Moldova Steel Concrete Reinforcing Bars/Moldova A841804 9/7/2001 Long Carbon/Alloy 

Netherlands Certain HotͲRolled Steel Flat Products/Netherlands A421813 10/3/2016 Flat Carbon/Alloy 

Oman Circular Welded CarbonͲQuality Steel Pipe/Oman A523812 12/19/2016 Pipe and Tube Carbon/Alloy 

Pakistan Circular Welded CarbonͲQuality Steel Pipe/Pakistan A535903 12/19/2016 Pipe and Tube Carbon/Alloy 

Poland Steel Concrete Reinforcing Bars/Poland A455803 9/7/2001 Long Carbon/Alloy 

Romania Carbon & Alloy Seamless Standard, Line & Pressure Pipe (Under 4.5 Inches)/Romania A485805 8/10/2000 Pipe and Tube Carbon/Alloy 

Russia HotͲRolled FlatͲRolled CarbonͲQuality Steel Products/Russia A821809 12/24/2014 Flat Carbon/Alloy 

South Africa Certain Carbon and Alloy Steel CutͲtoͲLength Plate/S Africa A791822 2/1/2017 Flat Carbon/Alloy 

South Africa Stainless Steel Plate In Coils/S Africa A791805 5/21/1999 Flat Stainless 

South Africa Stainless Steel Plate in Coils/S Africa (CVD) C791806 5/11/1999 Flat Stainless 

South Korea Certain Carbon & Alloy Steel CutͲtoͲLength Plate/Korea A580887 5/25/2017 Flat Carbon/Alloy 

South Korea Certain Carbon & Alloy Steel CutͲtoͲLength Plate/Korea (CVD) C580888 5/25/2017 Flat Carbon/Alloy 

South Korea Certain ColdͲRolled Steel Flat Products/Korea A580881 9/20/2016 Flat Carbon/Alloy 

South Korea Certain ColdͲRolled Steel Flat Products/Korea (CVD) C580882 9/20/2016 Flat Carbon/Alloy 

South Korea Certain HotͲRolled Steel Flat Products/Korea A580883 10/3/2016 Flat Carbon/Alloy 

South Korea Certain HotͲRolled Steel Flat Products/Korea (CVD) C580884 10/3/2016 Flat Carbon/Alloy 

South Korea Circular Welded NonͲAlloy Steel Pipe/S Korea A580809 11/2/1992 Pipe and Tube Carbon/Alloy 

South Korea CorrosionͲResistant Steel Products/Korea A580878 7/25/2016 Flat Carbon/Alloy 

South Korea CorrosionͲResistant Steel Products/Korea (CVD) C580879 7/25/2016 Flat Carbon/Alloy 

South Korea CutͲtoͲLength CarbonͲQuality Steel Plate/S Korea A580836 2/10/2000 Flat Carbon/Alloy 

South Korea CutͲtoͲLength CarbonͲQuality Steel Plate/S Korea (CVD) C580837 2/10/2000 Flat Carbon/Alloy 

South Korea Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes/Korea A580880 9/13/2016 Pipe and Tube Carbon/Alloy 

South Korea LightͲWalled Rectangular Pipe & Tube/S Korea A580859 8/5/2008 Pipe and Tube Carbon/Alloy 

South Korea NonͲOriented Electrical Steel/S Korea A580872 12/3/2014 Flat Carbon/Alloy 

South Korea Oil Country Tubular Goods/S Korea A580870 9/10/2014 Pipe and Tube Carbon/Alloy 

South Korea Stainless Steel Sheet & Strip In Coils/S Korea A580834 7/27/1999 Flat Stainless 

South Korea Stainless Steel Sheet & Strip In Coils/S Korea (CVD) C580835 8/6/1999 Flat Stainless 

South Korea Stainless Steel Wire Rod/S Korea A580829 9/15/1998 Long Stainless 

South Korea Welded Astm AͲ312 Stainless Steel Pipe/S Korea A580810 12/30/1992 Pipe and Tube Stainless 

South Korea Welded Line Pipe/S Korea A580876 12/1/2015 Pipe and Tube Carbon/Alloy 

Spain Stainless Steel Bar/Spain A469805 3/2/1995 Long Stainless 

Sweden NonͲOriented Electrical Steel/Sweden A401809 12/3/2014 Flat Carbon/Alloy 

Taiwan Certain Carbon & Alloy Steel CutͲtoͲLength Plate/Taiwan A583858 5/25/2017 Flat Carbon/Alloy 

Taiwan Circular Welded Carbon Steel Pipes & Tubes/Taiwan A583008 5/7/1984 Pipe and Tube Carbon/Alloy 

Taiwan Circular Welded NonͲAlloy Steel Pipe/Taiwan A583814 11/2/1992 Pipe and Tube Carbon/Alloy 

Taiwan CorrosionͲResistant Steel Products/Taiwan A583856 7/25/2016 Flat Carbon/Alloy 

Taiwan HotͲRolled Carbon Steel Flat Products/Taiwan A583835 11/29/2001 Flat Carbon/Alloy 

Taiwan LightͲWalled Rectangular Welded Carbon Steel Pipe & Tube/Taiwan A583803 3/27/1989 Pipe and Tube Carbon/Alloy 

Taiwan NonͲOriented Electrical Steel/Taiwan A583851 12/3/2014 Flat Carbon/Alloy 

Taiwan NonͲOriented Electrical Steel/Taiwan (CVD) C583852 12/3/2014 Flat Carbon/Alloy 

Taiwan Stainless Steel Plate In Coils/Taiwan A583830 5/21/1999 Flat Stainless 

Taiwan Stainless Steel Sheet & Strip In Coils/Taiwan A583831 7/27/1999 Flat Stainless 

Taiwan Stainless Steel Wire Rod/Taiwan A583828 9/15/1998 Long Stainless 
 

 

 

 

 

Appendix K - Page 3 

Steel Antidumping and Countervailing Duty Orders in Effect as of January 11, 2018 

Country Product/Country CaseNo Order Date Steel Product 

Category 

Grade 

Taiwan Steel Conrete Reinforcing Bar/Taiwan A583859 10/2/2017 Long Carbon/Alloy 

Taiwan Welded Astm A-312 Stainless Steel Pipe/Taiwan A583815 12/30/1992 Pipe and Tube Stainless 

Thailand Hot-Rolled Carbon Steel Flat Products/Thailand A549817 11/29/2001 Flat Carbon/Alloy 

Thailand Hot-Rolled Carbon Steel Flat Products/Thailand (CVD) C549818 12/3/2001 Flat Carbon/Alloy 

Thailand Welded Carbon Steel Pipe & Tube/Thailand A549502 3/11/1986 Pipe and Tube Carbon/Alloy 

Thailand Welded Stainless Pressure Pipe/Thailand A549830 7/21/2014 Pipe and Tube Stainless 

Trinidad & Tobago Carbon & Alloy Steel Wire Rod/Trinidad & Tobago A274804 10/29/2002 Long Carbon/Alloy 

Turkey Certain Carbon and Alloy Steel Cut-to-Length Plate/Turkey A489828 2/1/2017 Flat Carbon/Alloy 

Turkey Certain Hot-Rolled Steel Flat Products/Turkey A489826 10/3/2016 Flat Carbon/Alloy 

Turkey Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes/Turkey A489824 9/13/2016 Pipe and Tube Carbon/Alloy 

Turkey Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes/Turkey (CVD) C489825 9/13/2016 Pipe and Tube Carbon/Alloy 

Turkey Light-Walled Rectangular Pipe & Tube/Turkey A489815 5/30/2008 Pipe and Tube Carbon/Alloy 

Turkey Oil Country Tubular Goods/Turkey A489816 9/10/2014 Pipe and Tube Carbon/Alloy 

Turkey Oil Country Tubular Goods/Turkey (CVD) C489817 9/10/2014 Pipe and Tube Carbon/Alloy 

Turkey Steel Concrete Reinforcing Bar/Turkey A489829 7/14/2017 Long Carbon/Alloy 

Turkey Steel Concrete Reinforcing Bar/Turkey (CVD) C489819 11/6/2014 Long Carbon/Alloy 

Turkey Steel Concrete Reinforcing Bar/Turkey (CVD) C489830 7/14/2017 Long Carbon/Alloy 

Turkey Welded Carbon Steel Pipe & Tube/Turkey A489501 5/15/1986 Pipe and Tube Carbon/Alloy 

Turkey Welded Carbon Steel Pipe & Tube/Turkey (CVD) C489502 3/7/1986 Pipe and Tube Carbon/Alloy 

Turkey Welded Line Pipe/Turkey A489822 12/1/2015 Pipe and Tube Carbon/Alloy 

Turkey Welded Line Pipe/Turkey (CVD) C489823 12/1/2015 Pipe and Tube Carbon/Alloy 

Ukraine Hot-Rolled Carbon Steel Flat Products/Ukraine A823811 11/29/2001 Flat Carbon/Alloy 

Ukraine Steel Concrete Reinforcing Bars/Ukraine A823809 9/7/2001 Long Carbon/Alloy 

United Arab Emirates Circular Welded Carbon-Quality Steel Pipe/United Arab Emirates A520807 12/19/2016 Pipe and Tube Carbon/Alloy 

United Kingdom Certain Cold-Rolled Steel Flat Products/United Kingdom A412824 9/20/2016 Flat Carbon/Alloy 

United Kingdom Certain Hot-Rolled Steel Flat Products/United Kingdom A412825 10/3/2016 Flat Carbon/Alloy 

Vietnam Oil Country Tubular Goods/Vietnam A552817 9/10/2014 Pipe and Tube Carbon/Alloy 

Vietnam Welded Stainless Pressure Pipe/Vietnam A552816 7/21/2014 Pipe and Tube Stainless 

As of January 11, 2018, there are 164 AD/CVD orders in place on steel, with 28 against China. 
 

Appendix K - Page 4 

Country Product/Country 

Ongoing Steel Investigations 

Belarus Carbon and Alloy Steel Wire Rod/Belarus 

Italy Carbon and Alloy Steel Wire Rod/Italy 

Italy Carbon and Alloy Steel Wire Rod/Italy (CVD) 

South Korea Carbon and Alloy Steel Wire Rod/South Korea 

Russia Carbon and Alloy Steel Wire Rod/Russia 

South Africa Carbon and Alloy Steel Wire Rod/South Africa 

Spain Carbon and Alloy Steel Wire Rod/Spain 

Turkey Carbon and Alloy Steel Wire Rod/Turkey 

Turkey Carbon and Alloy Steel Wire Rod/Turkey (CVD) 

Ukraine Carbon and Alloy Steel Wire Rod/Ukraine 

United Arab Emirates Carbon and Alloy Steel Wire Rod/UAE 

United Kingdom Carbon and Alloy Steel Wire Rod/United Kingdom 

China Cold-Drawn Mechanical Tubing/PRC 

China Cold-Drawn Mechanical Tubing/PRC (CVD) 

Germany Cold-Drawn Mechanical Tubing/Germany 

India Cold-Drawn Mechanical Tubing/India 

India Cold-Drawn Mechanical Tubing/India (CVD) 

Italy Cold-Drawn Mechanical Tubing/Italy 

South Korea Cold-Drawn Mechanical Tubing/South Korea 

Switzerland Cold-Drawn Mechanical Tubing/Switzerland 

As of January 11, 2018, there are 20 ongoing AD/CVD investigations on steel products. 
APPENDIX L - Page 1 

Global Excess Capacity in Steel Production 

The excess capacity situation for steel is a global problem, and steel-producing 

nations have committed, in principle, to work together on possible solutions. In 

December 2016, G20 economies and interested Organization for Economic 

Cooperation and Development (OECD) members formally launched the Global 

Forum on Steel Excess Capacity (Global Forum), a multilateral effort mandated by 

G20 Leaders during the September 2016 Hangzhou Summit to enhance 

communication and cooperation and to take effective steps to address the global 

excess capacity challenge so as to enhance market function and encourage 

adjustment. The Global Forum brings together more than 30 economies representing 

more than 93 percent of the world’s steel production. 

Consistent with the G20 Leaders’ mandate for increased information sharing, 

one of the first tasks of the Global Forum was to develop a mechanism to exchange 

data on crude steel capacity, as well as subsidies and other government supports that 

contribute to steel excess capacity. All 33 members of the Global Forum participated 

to some degree in the information-sharing exercise, but much work remains, 

including with respect to the completeness, review and analysis of information 

provided. 

The Hangzhou mandate was highlighted at the G20 Hamburg Summit in July 

2017 where Leaders called on members to rapidly develop concrete policy solutions 

that reduce excess steel capacity and to produce a substantive report with such 

solutions by November 2017. 

In response to both the Hangzhou and Hamburg mandates, the Global Forum 

developed a set of six principles to serve as the basis for policy action by members 

which include, among other measures, enhancing market function by refraining from 

market-distorting subsidies and government support measures, fostering a level 

playing field in the steel industry and ensuring market-based outcomes, as well as 

encouraging adjustment. With these principles as guidance, the Global Forum 

outlined a series of recommendations for concrete policy solutions to reduce excess 

capacity and enhance market function in the steel sector. These voluntary policy 

recommendations are contained in the report concluded at a November 30, 2017 
                          

                                     

         

APPENDIX L - Page 2 

Ministerial meeting of the Global Forum and are intended to enhance market 

function and encourage adjustment and include the removal of market-distorting 

subsidies and other types of support by governments and government-related 

entities, whether or not such measures are prohibited by WTO rules. 

While the report provides helpful policy prescriptions, it does not highlight 

the lack of true market reforms in the steel sector1

. China points to its targets to 

reduce 100 – 150 MMT of crude steelmaking capacity from 2016 to 2020, and that 

since 2016, it has reduced over 100 MMT of crude steel capacity, with 65 MMT 

reduced in 2016 alone and more expected in 2017. The setting of capacity reduction 

targets is not a long-term response to the crisis. Meaningful progress can only be 

achieved by removing subsidies and other forms of government support so that 

markets can function properly. In addition, state-owned enterprises and private 

steelmakers should be treated equally. 

The Office of the U.S. Trade Representative Statement on Report of Global 

Forum on Steel Excess Capacity highlighted concerns about the report. It stated, 

“The Report issued today contains many helpful policy prescriptions, but it 

fails to highlight the recurring failure of some countries to implement true 

market-based reforms in the steel sector. In addition, the Report does not contain 

complete information regarding market-distorting measures in certain economies 

and does not set forth a clear pathway for filling such data gaps. The Report 

erroneously suggests that simply setting capacity reduction targets has been an 

effective response to the crisis, when in fact meaningful progress can only be 

achieved by removing subsidies and other forms of state support and letting 

markets do their work.”

2

Next steps for the Global Forum include additional information and data 

exchange, as well as three meetings in 2018, with Argentina (the next G20 President) 

1 Global Forum on Steel Excess Capacity (GFSEC) report to leaders is available at:

http://www.bmwi.de/Redaktion/EN/Downloads/global‐forum‐on‐steel‐excess‐capacity‐

report.pdf?__blob=publicationFile

2 The Office of the U.S. Trade Representative. (2017). USTR Statement on Report of Global Forum on Steel Excess

Capacity [Press release]. Retrieved from https://ustr.gov/about‐us/policy‐offices/press‐office/press‐

releases/2017/november/ustr‐statement‐report‐global‐forum
                                      

                         

                   

            

            

APPENDIX L - Page 3 

as Chair, to further discuss, review and assess this information. To be successful, 

this exercise will need to contain complete information regarding market-distorting 

measures from all economies and a clear path forward for implementation of true 

market-based reforms. 

China in particular has long recognized it has a growing overcapacity problem 

and has announced many policy initiatives and bilateral commitments to reduce its 

steel capacity. The massive growth in China’s steel production capacity illustrates 

the lack of implementation of such policies. For example, as early as 2003, the 

Chinese State Council issued a Circular aimed at stopping blind investment in steel 

and other industries in an effort to address surplus capacity.

3

 Six years and several 

policies later, China’s steel capacity had increased from 2003 levels of an 

estimated 278 million metric tons (mmt) to over 488 mmt. By 2009, China’s 

steel capacity had reached an estimated 717 mmt when China’s State Council 

Notice on Suppressing Capacity sought to reduce the growth of China’s raw steel 

output.

4

 

By 2011, China’s steel capacity had reached estimates exceeding 863 

mmt. Then again, in 2013, China’s capacity increased to an estimated 1.106 

billion metric tons (bmt), which was the same year that China released the State 

Council Notice to Resolve Serious Overcapacity.

5

 In 2016, China’s steel capacity 

increased again to estimates of more than 1.159 bmt when China introduced 

another measure: its 2016 State Council Opinion on Resolving Excess Capacity. 

In sum, China’s steel production capacity has grown from 278 mmt in 2003 to 

1.12 bmt in 2016, more than 300 percent (see Figure L1). 

China’s bilateral commitments regarding excess capacity have likewise been 

disappointing. For example, in the 2014 U.S. – China Strategic and 

Economic Dialogue, China committed to establish mechanisms that strictly 

prevent the 

3	 Circular of the General Office of the State Council on Transmitting and Issuing Several Opinions of the National

Development and Reform Commission and Other Authorities on Curbing Irrational Investment in Steel,

Electrolytic Aluminum and Cement Industries (Guo Ban Fa [2003] No.103).

4	 Guo Fa [2009] No. 38

5	 Guo Fa [2013] No. 41.
                             

APPENDIX L - Page 4 

expansion of crude steelmaking capacity and that are designed to achieve major 

progress in addressing excess steel production over the next five years. However, 

three years into that timeframe, China’s steel capacity increased from estimates of 

over 1.140 bmt to over 1.159 bmt. China exports 107 mmt into other markets 

creating global overcapacity that results in other countries making concessionary 

exports, including to the United States. 

Figure L1. Timeline: Major Chinese Government Policy Statements about 

Steel Expansion Concerns vs. Actual Growth in Steel Capacity 

Source: U.S. Department of Commerce, Enforcement and Compliance, using OECD steel capacity figures and estimates

Excess steelmaking in China is a dire concern globally. Until recently, China’s 

steel production grew at double-digit rates. China produced 808 mmt of steel in 2016 

(up 1.2 percent from its production of 799 mmt in 2015). China’s share of world 

production, at 50 percent, is larger than the combined production of the United 

States, the European Union (EU), Russia, and Japan, which historically were the 

largest producers of steel. Additionally, China’s exports of steel reached a record 

peak in 2015, at 110 million metric tons, before declining slightly (-3.1 percent to 

106 mmt) in 2016. China’s 2015 exports represented an increase of 20 percent over 
 

 

  

                               

         

                                  

                         

                         

APPENDIX L - Page 5 

2014 and were 35 percent more than the total annual production of the United States 

in 2015 (78.9 mmt). 

The financial situation of Chinese steel producers exacerbates the substantial 

overcapacity caused by Chinese government investment. Half of China’s steel 

producers reported losses totaling 64 billion yuan (approximately $9 billion) in 2014 

with steel prices falling by 32 percent in 2015.6 The Chinese steel industry received 

most of the stimulus funding and did well until about 2012.7 “Growth in steel 

demand across China has been slowing since 2011, leading to pledges by officials to 

cut capacity....Officials said that efforts last year to cut capacity had exceeded 

targets set for the year. But the research by Custeel suggest that many of the cuts 

were to plants that had already been idle. As a result, only 23 million metric tons of 

capacity was actually closed, the report said.”8 

One large Chinese steel group has signed a debt-to-equity swap agreement 

with China’s state-owned Industrial and Commercial Bank of China that covers 10 

billion yuan ($1.45 billion) in total.9 Since China's policymakers re-launched the 

debt-for-equity scheme at the end of last year for its struggling firms, the country's 

banks have pledged to sign deals with state-owned enterprises to ease their burden. 

As Chinese exports flood the global market, the global steel industry has 

become increasingly concerned about the resulting market distortions. As China 

exports its excess capacity into other markets, it creates global overcapacity that 

results in other countries making concessionary exports to the United States and 

other countries. Over the past few years, the United States has experienced the 

largest impact of the glut of excess capacity, including loss in domestic market share, 

6 “China’s Economic Slowdown: China’s Steel Sector Hit by Losses,” Christian Shepherd and Tom Mitchell, The

Financial Times, February 1, 2016, https://www.ft.com/content/338b4394‐c8aa‐11e5‐be0b‐b7ece4e953a0

7 Ruohong, Fan. "Slower Economy a Crucible for Nation's Steel Industry." CAIXIN. N.p., 15 Feb. 2016. Web.

8 Greenpeace Links Beijing’s Air Pollution Surge to Steel Factories ‐ The New York Times;

https://www.nytimes.com/2017/02/16/world/asia/beijing‐air‐pollution‐china‐steel‐

production.html?smprod=nytcore‐iphone&smid=nytcore‐iphone‐share&_r=0

9 Reuters, “China’s Angang Group in debt‐to‐equity swap with Industrial Bank ‐Xinhua,” April 2017,

http://mobile.reuters.com/article/idUSL3N1HD26Y
 

 

                   

     

APPENDIX L - Page 6 

lower capacity utilization, closures, and lay-offs, which numbered more than 14,100 

employees in the United States between 2015 and 2016. There is also excess capacity 

elsewhere in Asia and in Europe, but China alone added roughly three-quarters of 

the global increase in capacity from 2000-2015. 

Based on publicly available information about steel capacity additions 

collected by the OECD, Asia has seen a 5.3 percent increase in capacity since 2014. 

Commonwealth of Independent States (CIS) has seen a 2.8 percent increase, Latin 

America increased 6.8 percent, Africa increased 5.9 percent, and the Middle East has 

seen a 31.4 percent increase in capacity since 2014. There has been some general 

analysis done showing that the EU, CIS, and Asia exporting regions have among the 

highest levels of total excess steelmaking capacity. The definition used to measure 

excess capacity in this case was the difference between capacity and demand for 

each region.10 

Determining the precise level of capacity in each country is difficult for a 

number of reasons, including industry concerns about proprietary data. One of the 

objectives of the Global Forum is to capture capacity levels by both plant and 

country to provide a basis for understanding the magnitude of this global problem. 

Publicly-available sources identify new capacity developments globally, with Asia 

leading the way by three or more orders of magnitude (see Figure L2).11 

10 OECD, “Capacity Developments in the World Steel Sector,” 2016, http://www.oecd.org/sti/ind/Capacity‐

Developments‐Steel‐Industry.pdf

11 http://www.oecd.org/industry/ind/82nd_OECD_Steel_Committee_Hokuto_Otsuka_Capacity.pdf p. 4
 

                                

                                   

                 

APPENDIX L - Page 7 

Figure L2. Regional Capacity Developments 

Capacity Change 2000‐2016 

China’s exports alone exceed U.S. steel production, and China’s excess 

capacity is several times larger than the U.S. market. In China, the increase in steel 

capacity is occurring simultaneously with a major build up in military spending. 

China’s steel exports have often been found to be unfairly traded, and the U.S. 

industry has obtained relief for many unfairly traded products via antidumping and 

countervailing duty investigations against China and other countries.12 

The partial success of trade cases is demonstrated by the fact that China’s 

ranking in every product category of U.S. imports has declined from 2006 to 2016 

but has been replaced by other sources. This means that China has had to ship more 

to markets other than the United States, thereby depressing them. However, 

antidumping and countervailing duty orders alone cannot address the broader 

structural economic harm caused by global excess capacity, which is a major cause 

of relentless import pressure. 

12 U.S. companies have 164 outstanding antidumping and countervailing duty orders on imported steel, 28 of

which are against China. Chinese and other producers and exporters often find ways to evade the duties by

transshipping through other countries and other techniques.
APPENDIX L - Page 8 

The largest share of China’s steel exports are sent to its neighbors in Asia. 

Roughly 40 percent of those 2016 steel exports went to South Korea, Vietnam, 

Philippines, India, and Thailand. An unknown portion of these are further processed 

in those countries and eventually shipped to the United States. The peak year for 

Chinese steel exports to the United States was in 2006 when over 10 percent were 

exported to the United States. In 2015, China ranked 7th (after Canada, Brazil, 

Korea, Turkey, Mexico, and Japan) as a source of U.S. steel imports. In 2016, China 

slipped to 9th place behind Russia and Germany as a source of U.S. steel imports. 

While a small percentage of Chinese steel exports were shipped to the United 

States, Chinese steel exports to other countries, such as Vietnam and Thailand, 

expanded rapidly. At the same time that exports from those countries, and to a lesser 

extent Malaysia and Indonesia, to the United States significantly increased. 

In 2006, China exported over 50 million metric tons of steel globally. The 

United States received more than five million metric tons of steel from China in 

2006, or 10 percent of China’s global steel exports. In 2016, China exported over 

106 million metric tons of steel globally. China sent 835,637 metric tons of steel to 

the United States in 2016, or 0.8 percent of China’s global steel exports. This 

amounted to an 84 percent decline in U.S. imports from China from 2006 to 2016 

(see Figures L3 and L4). 

In 2006, China exported more than three million metric tons of steel to 

Vietnam, or 6.5 percent of China’s global steel exports. In 2016, China exported 

more than 11 million metric tons of steel to Vietnam, or 10.9 percent of China’s 

global steel imports. This amounted to a 250 percent increase in China’s exports to 

Vietnam from 2006 to 2016. 

In 2006, China exported more than two million metric tons of steel to 

Thailand, or 4.5 percent of China’s global steel exports. In 2016, China exported 

over six million metric tons of steel to Thailand, or 5.8 percent of China’s global 

steel exports. This amounted to a 171 percent increase in China’s exports Thailand 

from 2006 to 2016. 
     

APPENDIX L - Page 9 

14.22

11.64

6.51

6.19

5.79

3.31

3.27

3.06

2.92

2.90

0 2 4 6 8 10 12 14 16

South Korea

Vietnam

Philippines

Thailand

Indonesia

India

Malaysia

Saudi Arabia

Singapore

Pakistan

1 2 3 4 5 6 7 8 9 10

Millions of Metric Tons

Figure L4. Top 10 Countries Receiving China's Steel Exports in 2016 

Exports from China (Million Metric Tons) 

Source: IHS Global Trade Atlas 

Source: IHS Global Trade Atlas