Restricting access

By Corinna Petry

July 2017 - “Whistling past the graveyard.” It’s an idiom which describes staying cheerful in a dire situation or proceeding down a particular path with little or no understanding of the potential consequences.

I live in a beautiful city: Chicago. We’ve got the glittering lakefront, gorgeous architecture, arts and culture, awesome eats and championship athletics. What we don’t have much of anymore is heavy industry. I know, because my weekend hobby is to seek out Chicago’s manufacturing history and photograph the remnants, of which there is little but empty, weedy acreage surrounded by high fences.

At the beck of the domestic steel and aluminum industries, the Commerce Department under Secretary Wilbur Ross has embarked on an investigation to determine whether it should invoke national security as a means to shield domestic companies from unfair competition, as it seems dozens of existing antidumping and countervailing duties are failing to keep underpriced foreign product out.

Of course we want fair competition, yet by restricting imports even further, there is a risk of pushing more U.S. manufacturing offshore, particularly among industries that must use material they cannot source here.

Autoliv ASP Inc., which developed a proprietary, ultrahigh-strength mechanical tubing with specific characteristics and qualities that it uses to produce airbags, reported that because no U.S. steel producer is able to qualify to supply this particular tubing, Autoliv has been sourcing the product from a few reliable foreign suppliers. It allows Autoliv to produce airbags in the U.S. for domestic automakers. “The importation of this product poses no threat to U.S. national security and should be excluded [from] any restrictive measures arising from this investigation,” Autoliv’s attorneys testified at a Commerce hearing.

The Can Manufacturers Institute requested that tin mill products be excluded from import restrictions, saying can production is an important domestic industry employing 10,000 Americans and generating over $36 billion in annual economic activity. Canned goods are a staple of the American diet and tariffs on imported tin mill products would raise food prices, the institute’s president testified.

Byeong Bae Lee, president of Hyundai Steel America, told Commerce, “Roughly 10 percent of Hyundai’s steel requirements are not available from domestic steelmakers in the qualities and tolerances required. Hyundai’s access to steel is threatened by this action and thus jeopardizes [billions of dollars of] investments already made [in the U.S.] as well as planned investments.”

Existing trade remedies “already protect the domestic steel industry against unfair subsidization and dumping. Further restrictions are not necessary,” Lee argued.

The American Institute for International Steel, which represents exporters and U.S.-based traders and importers, warned that Section 232-based trade restrictions “will  complicate and likely damage international  commercial  relations,  creating  unnecessary  tensions” among U.S. allies and inviting retaliation. “They will increase manufacturing costs, driving up consumer prices, and put domestic jobs at risk.”

In a recent newsletter, William Perry, a trade attorney for Harris Bricken LLP in Seattle, recalled Ronald Reagan saying 31 years ago, “Protectionism becomes destructionism; it costs jobs.” Perry worries no one is listening to the users of aluminum and steel, and that Commerce is rushing the process.

What I, personally, don’t want to see is more U.S. towns and cities (even outside the former manufacturing belt of Buffalo, Chicago, Cleveland, Detroit and Pittsburgh) whistling past the graveyards of their former industrial works. MM

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