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% of U.S. consumption. Imports of most types of steel continue to increase. Import penetration levels for flat, semi-finished, stainless, long, and pipe and tube products continue on an upward trend above 30% of domestic consumption. Imports are nearly four times U.S. exports and are priced substantially lower than U.S.-produced steel.
As steel imports have increased, U.S. steel production capacity has been stagnant, while production has decreased.
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 (a more than a 50% reduction in the number of such facilities.) These factors have led to a 35% decrease in employment within the steel industry and have caused the domestic steel industry to operate, on average, with negative net income since 2009.
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 overarching excess capacity means that U.S. steel producers will face increased competition from imported steel, as other countries export more steel to the U.S. to bolster their own economic objectives and offset the loss of markets to Chinese steel exports.
The U.S. Secretary of Commerce published a report in January 2018, recommending that the U.S. President take immediate action by adjusting the level of these imports through quotas or tariffs.
Any quotas or tariffs that are imposed should be sufficient, even after any exceptions (if granted), to enable U.S. steel producers to operate at an 80% or better average capacity utilization rate, based on 2017 available capacity.
