Exec: Tariffs aiding state steel plants
Written by: Frank Lockwood
Published by: Arkansas Democrat-Gazette
WASHINGTON — President Donald Trump’s steel tariffs, tax cuts and regulatory changes have been great for business, Nucor Corp. Chairman John Ferriola told the Congressional Steel Caucus on Wednesday.
He was one of several steel industry representatives who expressed support for Trump’s trade policies.
Nucor, which has more than 1,800 employees in Arkansas, reported consolidated net earnings of $2.36 billion in 2018, its best year ever.
The 25 percent tariff on steel imports, imposed last year, “played an important role by helping provide a level playing field for the steel industry,” said Ferriola, who also serves as Nucor’s chief executive officer and president.
“While there has been a lot of debate in Washington and in the press about the tariffs, people around the country and in our industrial communities know that the president got it right,” Ferriola said. “The tariffs are working.”
As a result, the 79-year-old Charlotte, N.C.-based company is continuing to expand. In May, Nucor announced plans for a new galvanized steel sheet metal production line at its mill in Hickman in Mississippi County. A new specialty cold mill is set to open in Arkansas later this year.
All told, Nucor plans to invest $3.5 billion on 10 capital improvement projects around the country, Ferriola said.
Asked about the impact of the tariffs on Arkansas’ steel operations, Ferriola said: “Clearly, it’s been very positive. We had a record year.”
Big profits meant big payouts for the company’s 26,000 workers.
Nucor doled out $308 million through its profit-sharing program. In addition, each worker received a $2,000 bonus check, Ferriola said.
The company’s net earnings climbed 78.8 percent in 2018.
“It was a good year for Nucor, but I guarantee you, it was a very good year for Nucor’s teammates in Hickman, Ark.,” Ferriola said.
“We still see a strong year going in 2019, and we’re continuing to invest,” he said, adding, “We’re putting a lot of money in Hickman. … and we will continue to grow in Arkansas.”
Lawmakers from steel-manufacturing districts were on hand for Wednesday’s testimony, including U.S. Rep. Rick Crawford, a Republican from Jonesboro and the caucus’s co-chairman.
United States Steel Corp. President David Burritt told lawmakers their “bipartisan leadership has proven critical.”
One year ago, Trump announced plans for tariffs, saying foreign steel was arriving “in such quantities and under such circumstances as to threaten to impair the national security of the United States.”
Using his powers under Section 232 of the Trade Expansion Act of 1962, he imposed tariffs on steel and aluminum. China and other countries retaliated, igniting a trade war.
Pointing to the nation’s low unemployment rates and strong economic growth, steel executives argued Wednesday that the gambit has worked.
“Jobs are returning. Steelmaking capacity is reviving. The U.S. steel industry is able to innovate and invest to modernize our operations and strengthen our ability to supply America’s demand for steel,” Burritt said.
Tony Frabotta, vice president of Zekelman Industries, also portrayed the tariffs as a success.
The company, which describes itself as “the largest producer of steel pipe and tube products in North America,” has a plant in Blytheville.
“I can say without any hesitation that the proactive steps taken by the administration to provide relief to our industry and its workers has resulted in an economic turnaround and recovery and progress for the industry and its workers,” Frabotta said.
Crawford, whose district includes Blytheville, asked how the Zekelman Industries plant is doing.
It had been idle, for a time, Crawford said.
Anticipating that the tariffs would be imposed, “We went out on a limb and opened the facility back up. We hired our employees, and it’s gone terrific,” Frabotta said. “We’re struggling to get enough employees to fill our capacity needs.”
Arkansas Lt. Gov. Tim Griffin, who attended a White House meeting on trade Wednesday with other lieutenant governors, said the tariffs have benefited Arkansas’ steel industry. Members of the state’s agriculture community, on the other hand, say the tariffs have been harmful, he said.
Ultimately, tariffs can provide leverage as the U.S. works to negotiate better trade deals, he said.
“As senior officials in the White House were saying today, tariffs are not meant to be a permanent state of affairs, they are meant to be temporary tools in the toolbox to be used to make sure we are getting a level playing field around the world,” he said.