California Steel Industries, Inc. announced in a press release today that it is calling for Donald Trump to exclude semi-finished steel slabs from the 25 percent tariffs he is expected to impose on steel imports, as part of the administration's investigation under Section 232 of the Trade Expansion Act.
CSI is a "slab converter" mill, relying almost entirely upon imported slab as feedstock to produce coil steel sheet and electrical resistance welded (ERW) pipe. CSI was formed from the rolling mills of the former Kaiser Steel in 1984, saving nearly 1,000 jobs for the last 34 years.
Because steel slabs are not commercially available in the United States on any consistent basis, nor are they produced anywhere in the Western United States, CSI buys its slabs primarily from Mexico, Brazil and Japan. The company is the largest customer by tonnage of the Port of Los Angeles, importing more than 1.5 million tons of slabs annually, and supplying its finished steel products to hundreds of manufacturers and distributors, supporting thousands of jobs across the western region of the United States.
According to CSI President and CEO, Marcelo Botelho Rodrigues, Trump's goal of protecting American steel jobs may be harmed by placing tariffs on slabs, when imports of slabs have been a key source of industry health, both for slab converters such as CSI, and for integrated steel mills, which supplement their production needs with imported slabs.
Rodrigues emphasized that historically, imported slabs represent 6.3 percent of total steel demand in the US, and there was no surge of imported slabs in 2017. "So, imported slabs are not part of the problem, but part of the solution, particularly in the Western US," he said.
"Our model allows us to maintain our operations in California and comply with strict environmental regulations of our home state. We have shared our success with our team members, providing well-paying middle class jobs, including profit sharing and great benefits, to support them and their families."
Rodrigues noted that there have never been unfair trading cases filed against slab imports. "We are for fair trade, and the international slab market in which CSI participates has no problems in that area," he said. "Furthermore, we do not buy slabs from China." On the other hand, he said, CSI was a key participant along with industry peers as a plaintiff in numerous anti-dumping and countervailing duty cases, against unfairly traded finished sheet and pipe products.