The Commerce Department has initiated investigations into whether a key material used in major real estate and infrastructure projects – fabricated structural steel (FSS) from Canada, China and Mexico – is being sold in the U.S. for less than fair value.  (Commerce Department announcement, Feb. 26)

The Commerce Department has initiated investigations into whether a key material used in major real estate and infrastructure projects – fabricated structural steel (FSS) from Canada, China and Mexico – is being sold in the U.S. for less than fair value.

• The Roundtable on March 4 wrote to the U.S. International Trade Commission (ITC) urging a cautious approach to the investigation, emphasizing the potential economic harm that new tariffs could cause.  Roundtable President and CEO Jeffrey DeBoer concludes in the letter that “… unless supported by conclusive evidence of unfair dumping or subsidies, I urge you to reject calls for new tariffs on U.S. imports of fabricated structural steel.”  (Roundtable comment letter, March 1)
• The antidumping and countervailing duty investigations are based on petitions from the American Institute of Steel Construction.  If  Commerce and the ITC affirm that dumped and/or unfairly subsidized U.S. imports of fabricated structural steel from Canada, China, and Mexico are causing injury to the U.S. industry, punitive duties could be imposed on those imports.  (Reuters,  Feb. 26)

• The Roundtable letter emphasizes the negative effects of FSS tariffs.  “New duties could have a chilling effect on job creation and productive investment, slowing economic growth and reducing employment in industries directly and indirectly affected by real estate development,” DeBoer states.

• In 2017, imports of fabricated structural steel from Canada, China, and Mexico were valued, respectively, at an estimated $658.3 million, $841.7 million, and $406.6 million  (Commerce Department Fact Sheet).

• Rising costs due to the shortage of skilled labor are currently putting pressure on new real estate development.  Steel prices in the United States also rose significantly after the imposition of 25 percent tariffs on many steel imports last March. (Roundtable Weekly, March 9, 2018)

• The declining competitiveness of domestic steel fabricators could be attributed to the unfortunate downstream economic consequences of steel tariffs imposed last year – and may not reflect clear evidence of dumping or illegal subsidies.

• As The Roundtable letter notes, “… there is significant cross-border integration and cooperation in the fabricated structural steel industry.  Foreign fabricators operate facilities in the United States, utilize U.S.-made steel in their finished products, and regularly form joint ventures with U.S. firms to take on large and complex projects.”

• DeBoer also states, “… rather than spurring real estate and infrastructure developers to purchase fabricated steel from domestic sources, unjustified government intervention in the form of new duties may lead potential U.S. buyers to shelve projects that would create well-paying jobs and produce a lasting economic impact in communities.”

The ITC is scheduled to make its preliminary determinations by March 21, 2019.