After the American Institute for International Steel (AIIS) released a new analysis on the downward effect of tariffs on US steel capacity utilization during a press conference for the Coalition of American Metals Manufacturers and Users last week, an unnamed official at the US Department of Commerce was quoted in the media as saying the study was “flawed.”
The US DOC dismissed report as “just a series of charts” with significant flaws, including the “failure to include 2017 data,” and argued that “correlation does not equal causation.” The DOC official also said the study focused on “short-term” analysis and ignored other factors, such as the recession.
Today, Dr. John Martin of the AIIS has responded to the DOC’s critique.
The reason 2017 steel industry data was not included on all charts, Martin said in a statement, is that the American Iron and Steel Institute (AISI) annual report that included the steel industry data for 2017 has not yet been released (it is expected around July 2018).
Martin also emphasized that the data utilized in the analysis did include 2017 data for waterborne steel imports as published by the US Census, USA Trade Online. “That data shows an increase in steel imports from 2016 to 2017,” Martin said, “but the 2017 level of waterborne imports was less than the level in 2015.”
In the DOC’s original justification for the Section 232 tariffs, the department said “the only effective means of removing the impairment is to reduce import levels that should, in combination with good management, enable US steel mills to operate at 80 percentor more of their rated production capacity.”
However, Martin’s analysis offered compelling data showing that there does not appear to be a relationship between steel imports and US steel industry capacity utilization. In particular, the analysis shows that the capacity utilization of the US steel industry actually declined during the period in which Section 201 import tariffs were imposed (March 2002–December 2003).