Steel, Aluminum Makers Are Among Few to Praise Tariff Plans

By Doug Cameron and Patrick McGroarty 

Nucor Corp., US Steel Corp. and Century Aluminum Co. lead a short list of companies that welcomed President Trump's proposed tariffs on all imports of those metals.

Firms that make steel and aluminum in the U.S. had successfully lobbied in recent years for tariffs on specific kinds of metal from countries they argued were overproducing those metals. The levies of 25% on imports of steel and 10% on aluminum that President Trump said Thursday he would implement next week are far broader. The Trump administration hasn't said how exactly the tariffs might be applied.

"This is vital to the interests of the United States," US Steel Chief Executive David Burritt said at the White House on Thursday.

The company is expected to restart a blast furnace in Granite City, Ill., to make steel at what are expected to be higher global prices that would likely result from the new tariffs.

Nucor Corp., the biggest U.S. steel company by sales, also praised the blanket tariffs. "We believe very strongly that it's time for decisive and meaningful action to stem the flow of illegally traded imports into this country," Chief Executive John Ferriola said Thursday.

Their support set them apart from the leaders of many other big companies in the U.S. and overseas. Makers of everything from airplanes to beer cans said that the tariffs would push up production costs and make their products more expensive for consumers. Foreign leaders in from Ottawa to Brussels warned that the protectionist measures could spark a trade war.

Supporters of the tariffs said any inflationary effects would be small. Mr. Ferriola said in an interview on Thursday that steel isn't among the biggest costs for most manufacturers. "If our trade laws are allowed to be abused, manufacturers are going to lose customers anyway" to foreign competitors, he said.

Michael Bless, chief executive of Chicago-based Century Aluminum, echoed that support. "We face a flood of imports -- and that will only accelerate without immediate relief," he said.

Nucor shares were down 0.3% in late Friday trading, underperforming the broader market, while US Steel was down almost 2%. Century Aluminum was 2% higher.

The United Steelworkers Union also has backed tariffs for years in response to shrinking workforces at struggling unionized companies like U.S. Steel. But the union also urged the Trump administration to exempt Canada from duties to protect unionized workers at Canadian mills.

Not all metal makers embraced the proposed tariffs. Century's larger rival, Alcoa Corp., said they could affect aluminum shipments from Canada, where it operates two smelters and is a partner in a third.

California Steel Industries Inc., which turns imported steel slabs into sheeting used in construction and pipes used by oil-and-gas companies, said that the tariffs Mr. Trump proposed would be major blow to its business.

"To deliver what he wants, to protect U.S. companies and jobs," said Marcelo Botelho Rodrigues, California Steel's chief executive, "it has to be better applied than across the board. It has to be a more surgical approach."

--Bob Tita contributed to this article.

Write to Doug Cameron at [e-mail] and Patrick McGroarty at [e-mail]

(END) Dow Jones Newswires

March 02, 2018 15:37 ET (20:37 GMT)

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