Buying a million pounds of U.S. steel for our company in Brazil taught me a good lesson on steel tariffs. While there were no apparent restrictions on imported steel, the Brazilian authorities used extraordinary means to prevent us from doing so, and we haven’t bought any since. I suspect similar tactics go on all over the world, and call for some action against foreign steel imports.
Here is a portion of that order which finally made its way to our plant near Sao Paulo, after a full 6 months being marooned in Brazilian customs. These delays occurred despite all our extensive legal work to gain its release. We were prevented from arguing too aggressively by Brazilian legal sanctions against “harassing a public official.” Yet Brazil’s opaque laws are based on largely Western democratic principles. How, then, can we come to grips with Eastern communist precepts that dominate the world steel market?
Starkly illustrated below is the added dilemma we face when competing in a market dominated by one behemoth steel producer, namely China. We produce less than 3% of the world’s steel. When the U.S. Steel Corporation reopened a mill near St. Louis this month, its maximum capacity is a tiny infinitesimal portion of the world’s supply, less than one tenth of one percent. Yet that plant put over 2,000 St. Louisans back to work.
Since 40% of steel is used in construction, and is critical to building our future, we should at least play on a level playing field, and not be at a disadvantage to undemocratic, non-transparent foreign entities. In addition, since most of domestic steel comes from recycling scrap, we have good reason to maintain our U.S. steel industry. Let’s pray that the short term pain is worth the long term gain from these tariffs.