Steel, Aluminum Interests Ask for More Protection at Hearing

Many witnesses at the USMCA review hearing Dec. 4 asked for more protections for their industries through USMCA -- requiring that steel and aluminum for cars and light trucks meet a melted and poured or smelted and cast standard immediately, for instance, rather than in 2027. They said that the percentage should be higher than 70%. Witnesses that represent fabricators of grating or pipes asked either that only goods with North American melted and poured metal be allowed in, or that the tariff shift standard be abandoned.

The Steel Manufacturers Association complained that even with the doubling of Section 232 tariffs on steel and expansion of the scope, U.S. steelmakers are only at 76% utilization, up only 2 percentage points from last year.

Century Aluminum Company, a major primary aluminum producer behind the original 10% Section 232 tariff on aluminum, said certain imported products should only be allowed with smelted and cast metal from North America, and should require some U.S. wrought aluminum. Matt Aboud, senior vice president for strategy, complained that when Canada and Mexico were exempted from Section 232 in the first Trump term, the price of aluminum in the U.S. fell, moving closer to the global price. He said that electricity is subsidized in Canada, and that Canadian aluminum should never be allowed in tariff-free, even if Canada closes its market to non-market economy metals.

Specialty Steel Works CEO Michael Salamon said there should be a labor value content requirement for imported appliances, agricultural equipment and construction equipment, though he didn't say a specific rate.

The American Institute of Steel Construction, which represents steel fabricators, argued for $16/hour LVC for all structural steel, and said that in order to qualify for USMCA, it should be made with steel melted and poured in North America.

U.S. Steel Associate General Counsel Benjamin Caryl asked that 232 tariffs be added to appliances, fabricated structural steel, food packaging and "many other products" to reduce imports of steel-intensive goods.

He said it's "unbelievable" that steel pipe from Mexico can be originating even if it's made from Chinese steel.

In questions from the panel, he was told, "We’ve heard ideas about labor value content today, what’s yours?"

He replied, "I think you should replicate what’s working in autos," though he said the dollar amount could be negotiated.

A number of witnesses, including from steelmaker Nucar, argued that duty deferral and drawback in Mexico should be prohibited for their sector. That company also asked that a labor value content standard be added to steel products in North America.

Aluminum Extruders Council President Jason Weber said importers of Mexican auto or truck parts shouldn't get a break on aluminum derivatives tariffs. He said that there must be a U.S. content requirement for extrusions to qualify under USMCA.

American Institute of Steel Construction Vice President Brian Raff complained that 50% tariffs on derivatives only apply to the metal value, and that if it's made with U.S. steel, it avoids the duty altogether.

Two Mexican steel companies testified, and argued that steel made in Mexico with North American steel that is USMCA-eligible shouldn't be subject to the tariffs.

Deacero's Juan Antonio Reboulen said, "America first doesn’t mean America alone."

Deacero USA makes nails, but even with Section 232 duties and seven antidumping cases, it can't increase its market share.

"The price of the raw materials is so big that manufacturers outside can absorb 232 and can still send at a lower cost," CEO Fernando Villanueva said.

Aluminum Association CEO Charles Johnson asked for an export restriction on aluminum scrap leaving North America, and that Mexico fulfill its promise to track country of smelt and cast.

Cold Finished Steel Bar Institute's Michael Salamon said Section 232 "tariffs must be expanded to cover more of our products and our customers’ products," in chapters 84 through 87 "and beyond." He also argued that tariff shift shouldn't be allowed for manufactured products, and all must have a regional value content requirement.

United Aluminum CEO John Lapides said four aluminum rolling mills like his have shuttered in the last 18 months, and said that they must be able to import Canadian smelted ingot and slab without tariffs. However, he said, products from rolling mills in Canada and Mexico should only qualify for USMCA if the aluminum was smelted and cast in North America. He cast doubt on the possibility of Mexico and Canada closing their market to aluminum from China as the U.S. has done, saying, "they want downstream jobs."

United Steelworkers' legislative director, Roy Houseman, who testified on a union panel on Dec. 5, said the pact should be renegotiated, and should apply melted and poured type rules to copper, nickel, graphite, lithium, titanium and platinum metals.

He complained that the suppression of industrial wages "in Mexico incentivizes outsourcing of U.S. jobs."

Witness Alejandro Martinez, a trade union leader in food manufacturing in Mexico, was asked by government officials how he would set a sectoral minimum wage in his country. He said the lowest wage for any sector should be about $10/hour, because that's how much a family of four needs to live in dignity.