SMA: There's Reason to be Cautiously Optimistic About the Domestic Steel Industry
01/27/2017 - Representatives of the Steel Manufacturers Association said the industry is “cautiously optimistic” about its prospects under the Trump administration.
Speaking during a news conference Thursday, association president Philip K. Bell said one SMA member summed up the state of things quite well by saying, “In the days immediately following the election, there were a lot of people shrugging their shoulders saying, ‘Who knew?’ And now in in the days immediately following the inauguration, there are a lot of people shrugging their shoulders and saying, ‘Who knows?’”
Bell said that campaign platforms aside, recent executive orders and statements related to matters such as energy independence, infrastructure investment and the need to buy and hire American all are cause for positivity.
SMA vice chairman Jim Darsey, an executive vice president at Nucor Corp., agreed, saying that the administration is certainly focused on issues close to steelmakers – reviving U.S. manufacturing, energy independence, protecting from unfair trade and reducing regulations.
“The reason people are so excited is because of the focus on the policies and the focus on the economy, job creation and investment in infrastructure. That provides America with opportunities,” he told reporters.
That focus, and the enthusiasm it creates, generates clarity and a degree of certainty to industry and manufacturers, he added.
SMA chairman Tracy Porter, an executive vice president at Commercial Metals Co., said that for too long, steelmakers have made compelling arguments for trade actions to the government, only to be disappointed by determinations setting margins that are disproportionately low relative to the actual offense.
He said he believes that under the Trump administration, steelmakers will get a “fair shake.”
Added Darsey: “The message (to exporting countries) is going to be: to have access to our markets, you are going to abide by the rules you agreed to.”
Still, Bell said that despite cause for some newfound optimism, the industry remains well aware of the headwinds that continue to push against it.
Bell noted that although share prices of domestic steelmakers have appreciated recently, capacity utilization is still hovering around 70 percent. And although imports are down sharply, percentage-wise, they’re down from a record year.
“Also, there’s this gnawing feeling that even with trade case success, there is still a lot of circumvention and dumping that’s not being captured.”
The three said they expect to see the administration sign more bilateral trade deals, as Trump has said he favors, as opposed to multicountry deals. He’s also promised to renegotiate NAFTA, and Bell said that considering the agreement is more than 20 years old, it’s worthwhile to revisit it.
“We just hope that this is done very methodically, almost surgically, if you will, to look at those things that can be changed to make NAFTA better.”
Of course, the agreement’s future remains to be seen as Trump proposed a 20% import tax on Mexican goods as a way to pay for a border wal between the U.S. and Mexico.
But the SMA representatives said they believe much of the talk right now is more rhetorical than anything.
“If there’s one thing we know for sure about our new president, it’s that he doesn’t hold back on the rhetoric,” Bell said.
But he and the other representatives said they expect the talk to settle down as Trump assembles his team and as his administration begins to focus on investment and infrastructure.
Porter said that he, too, expects that the inflamed words will subside as the administration puts the election even further behind and focuses on the tasks at hand.
“I continue to be optimistic about what this administration is going to do for this country.”
Bell said that campaign platforms aside, recent executive orders and statements related to matters such as energy independence, infrastructure investment and the need to buy and hire American all are cause for positivity.
SMA vice chairman Jim Darsey, an executive vice president at Nucor Corp., agreed, saying that the administration is certainly focused on issues close to steelmakers – reviving U.S. manufacturing, energy independence, protecting from unfair trade and reducing regulations.
“The reason people are so excited is because of the focus on the policies and the focus on the economy, job creation and investment in infrastructure. That provides America with opportunities,” he told reporters.
That focus, and the enthusiasm it creates, generates clarity and a degree of certainty to industry and manufacturers, he added.
SMA chairman Tracy Porter, an executive vice president at Commercial Metals Co., said that for too long, steelmakers have made compelling arguments for trade actions to the government, only to be disappointed by determinations setting margins that are disproportionately low relative to the actual offense.
He said he believes that under the Trump administration, steelmakers will get a “fair shake.”
Added Darsey: “The message (to exporting countries) is going to be: to have access to our markets, you are going to abide by the rules you agreed to.”
Still, Bell said that despite cause for some newfound optimism, the industry remains well aware of the headwinds that continue to push against it.
Bell noted that although share prices of domestic steelmakers have appreciated recently, capacity utilization is still hovering around 70 percent. And although imports are down sharply, percentage-wise, they’re down from a record year.
“Also, there’s this gnawing feeling that even with trade case success, there is still a lot of circumvention and dumping that’s not being captured.”
The three said they expect to see the administration sign more bilateral trade deals, as Trump has said he favors, as opposed to multicountry deals. He’s also promised to renegotiate NAFTA, and Bell said that considering the agreement is more than 20 years old, it’s worthwhile to revisit it.
“We just hope that this is done very methodically, almost surgically, if you will, to look at those things that can be changed to make NAFTA better.”
Of course, the agreement’s future remains to be seen as Trump proposed a 20% import tax on Mexican goods as a way to pay for a border wal between the U.S. and Mexico.
But the SMA representatives said they believe much of the talk right now is more rhetorical than anything.
“If there’s one thing we know for sure about our new president, it’s that he doesn’t hold back on the rhetoric,” Bell said.
But he and the other representatives said they expect the talk to settle down as Trump assembles his team and as his administration begins to focus on investment and infrastructure.
Porter said that he, too, expects that the inflamed words will subside as the administration puts the election even further behind and focuses on the tasks at hand.
“I continue to be optimistic about what this administration is going to do for this country.”
