Nucor CEO John Ferriola spoke with CNBC’s “Mad Money” host Jim Cramer Monday, claiming there is “no doubt we’re in a trade war” and the country is “losing that trade war.”
Ferriola said that because foreign competitors are motivated not by profits, but by employment, those countries are effectively trying to “export their unemployment” to the United States steel industry, hurting companies doing business stateside, especially in the manufacturing sector.
“Steel is the bedrock of manufacturing,” Ferriola said. “Manufacturing is the bedrock of any strong economy.”
Ferriola claimed that if foreign steel producers’ low-cost imports “continue to pressure US steel producers that supply materials for everything from tractors to appliances, they will eventually engulf the whole US market.”
Singling out China as an example of a “predatory country,” Ferriola said he has urged the president to push through policies that implement strong tariffs on steel imports, despite hundreds of tariffs that already exist due to the standard US Department of Commerce antidumping/countervailing duty investigation process.
Ferriola was reportedly referring to the ongoing Section 232 investigation, which could result in sweeping steel tariffs and/or quotas. In the event those policies are enacted, Ferriola said that Nucor and its peers would be able to “unleash a whole new wave of improvements meant to boost business,” even though most US steel producers have reported strong net earnings in the second quarter.
“If you look at the last six, seven years, we've invested over $7 billion growing our company, and we're doing that in an environment where we're not sure we have a sustainable industry,” Ferriola said. “Can you imagine the action that Nucor would take and others in our industry would take in growing our business, creating jobs, if we were assured of a sustainable environment in which we could operate our industry?”
According to several sources in the US steel industry, one of the expected consequences of strong Section 232 tariffs include immediate price increases on US domestic steel products, which could harm the manufacturing sector and other downstream industries that currently rely on low-priced steel imports to compete.