Already, President Bush's Steel Program has enabled the most dramatic
consolidation and restructuring to occur in the U.S. steel industry in
decades. Nearly halfway into the program, more than U.S. $3 billion of
industry investment is tied up in these streamlining efforts.
Maintaining the President's steel tariffs for the intended, full 3-year
duration will enable America's steel industry to continue to expand our
efforts to become more efficient and competitive, allowing us to better
serve our customers in the future. The program has brought stability
to the marketplace, which benefits steel consumers and producers alike.
Availability of quality domestic steel is not an issue, and pricing has
declined steadily since last summer to where steel prices in the U.S.
are lower than in most markets overseas. To prematurely curtail Section
201 would be severely harmful to the progress underway, and could lead
to another downturn for an industry vital to manufacturing and to national
Long before the President initiated the 201 steel tariffs, our member
companies established, through AISI, a leadership role in the development
of programs to expand the markets for steel. Over the years, we became
the acknowledged world leader in the development of innovative steel-customer
partnership programs. At AISI, we long ago decided to focus most of our
resources in this vital area because, if our members are to compete and
win the global marketplace of the 21st century, it is essential that
they produce steel products better, faster, and at an even more cost-competitive
price. The "growth" strategy that we have pursued has emphasized
expanding traditional markets, establishing new market growth, and creating
innovative market applications.
Prior to the crisis conditions in our industry, AISI member companies
had committed to a business plan requiring a $115-million investment
over a 5-year period to advance the competitive position of our customers.
The average steel producer today has an investment of $1 billion to $9
billion in capital equipment designed exclusively to make a range of
quality steel products. Collectively over the past 2 decades, American
steel producers have invested more than $60 billion into highly efficient
facilities that meet aggressive standards for energy, environment, and
A strong domestic steel industry is essential if we are to ensure that
our collective investment in steel's future will return the value on
invested dollars to our customers and, ultimately, the consumer. Unfortunately,
the very factors that led to the imposition of the Section 201 tariffs
put these ambitious and beneficial pro-customer programs - and the industry's
significant investment in them - in extreme jeopardy.
The steel import crisis substantially reduced the funding that was available
for these programs, forcing the elimination of some investments. Many
of the long-term investors, companies such as LTV, Bethlehem, and National,
were in bankruptcy or severely weakened financial conditions and were
unable to support our critical steel-customer partnerships and vital
market development efforts. Now, however, thanks to the implementation
of the President's steel tariffs, which served to stabilize the domestic
steel market, our industry has been able to maintain its core market
development programs, albeit at a reduced level.
As a result, we are maintaining steel's competitive position in more
than 60 million tons of traditional markets, and have identified nearly
15 million tons in new, potential growth markets. These ongoing investments
by U.S. and Canadian mills demonstrate that U.S. companies can come together
to implement effective programs that directly support their customers.
Appliances, among the top four end-use markets for steel in the U.S.,
are an important part of this picture.
Together, these four end-uses account for more than 70 percent of U.S.
steel consumption and more than 80 percent of steel service center shipments.
For the first 4 months of 2003, steel shipments were 34,882,000 net tons,
representing a 7.2-percent increase from the 32,528,000 net tons shipped
during the same period in 2002. A year-to-year comparison of shipments
(through April 2003) shows appliances, utensils, and cutlery up 5.6 percent.
If the U.S. does not maintain the 201 tariffs for their intended, full
3-year duration, our industry's innovative market development efforts
and our substantial pro-customer investments in these areas will be in
serious jeopardy again. Part of those efforts includes maintaining steel
as not only the most recycled material in North America - at an industry-wide
rate of more than 70 percent (totaling 70 million tons) - but also as
the material that always contains at least 25-percent recycled content.
Through the Steel Recycling Institute, we have taught local communities
how to gather appliances and other steel-containing products to return
to the stream of commerce. Today there are almost 12,000 appliance recycling
locations in the U.S.
Steel has been the engine driving appliance recycling, with the typical
appliance consisting of 65-percent steel. In 2002, appliances had a recycling
rate of 86.6 percent, up from 85.0 percent in 2001. This recycling effort,
which the steel industry has been instrumental in developing, has kept
the U.S. EPA out of mandating manufacturer responsibility for the disposal
of white goods.
Through advances in steel manufacturing technology, we are providing
our customers with a variety of new products and investments that could
not have happened without the "breathing room" afforded by
the President's steel tariffs. Putting these vital pro-customer investments
at risk is not in the best long-term interest of America's steel-using
America's steel industry must continue to make significant investments
as we strive to improve continuously our ways of doing business. These
programs are fundamental to a strong, globally competitive consumer base.
They were in serious jeopardy in the period leading up to the imposition
of the 201 tariffs and will be imperiled again if the tariffs are lifted
opinions known on the subject of Section 201 Steel Tariffs.