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U.S. steelmakers argue for broad import protections on defense grounds

By David Lawder

WASHINGTON, May 24 (Reuters) - U.S. steelmakers argued on Wednesday that products from oil drilling pipe to concrete-reinforcing bars need broad protection from imports on national security grounds, while foreign governments and firms argued that the industry is adequately meeting U.S. defense needs.

The comments came at a U.S. Commerce Department hearing for a national security investigation into steel imports that could lead to broader tariffs or import quotas than the anti-dumping and anti-subsidy duties now in place on dozens of steel products.

Commerce Secretary Wilbur Ross told the hearing he hoped to complete the review under a Cold War-era trade law by the end of June, much sooner than the 270 days allowed under the statute.

American steel industry executives argued that a flood of imports has dangerously eroded their profitability and thus their ability to continue meeting very broadly defined national security needs.

"Unfortunately, global overcapacity and unfairly traded imports threaten our ability to invest. Production overcapcacity in the steel industry has reached crisis levels," said John Ferriola, chief executive of top U.S. producer Nucor Inc .

The executives said this not only applies to highly engineered armor plate for tanks and ships but to more mundane products such as steel tubing and "rebar," considered a commodity steel rod product used in construction of concrete buildings, roads and bridges.

Commercial Metals Co President Barbara Smith called rebar "a product of critical importance to this nation's infrastructure."

AK Steel Chief Executive Roger Newport said imports threatened the company's production of electrical steel used in power generation and transmission, potentially making the U.S. electrical grid dependent on imports.

Gu Yu, first secretary of China's Ministry of Commerce, said there was no evidence that steel imports threatened U.S. national security, noting that dumping orders had sharply curtailed imports from China. He said U.S. needs "can be and are readily satisfied by U.S. domestic production."

Some steel buyers said restricting certain imports would hurt their businesses because there were few or no domestic suppliers for certain products.

Tracey Norberg, general counsel for the Rubber Manufacturers Association said all of the steel wire used in tire-making is imported and should be exempted from any duties.

John Cross, chief executive of Steelscape LLC, a Washington state-based fabricator of metal building products, said his firm depends on steel imported into West Coast ports that offer lower shipping costs than shipments by rail from mills in the Eastern United States. (Reporting by David Lawder; Editing by Bill Trott)

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