Trump’s domestic sourcing policy will not get off the ground
On January 24, 2017, President Donald Trump signed three related presidential memoranda. The first two gave the go-ahead to the Dakota Access and Keystone XL pipelines, respectively, two projects that had been nixed by former President Barack Obama, by ordering an expedited environmental review process. The third memo instructed the Secretary of Commerce to develop a plan within 180 days for all new pipelines within the United States to be constructed with US materials and equipment.
The question before us, then, is this: How might these presidential policies affect the trade in steel pipe? The short answer is: Probably not that much.
Domestic industry groups were divided on the Trump policy, depending on whether they represent US or international steel producers. Thomas Gibson, president of the domestic-oriented American Iron and Steel Institute (AISI), praised Trump for his focus on American steel and manufacturing.
“Taken together,” he said, “building these pipelines, ensuring key markets for domestic steel and pipe products, and lowering the burdens to manufacturing in the US, will help ensure that our industry remains highly productive and internationally competitive.”
But the head of the importers group American Institute for International Steel (AIIS) noted that close to 20% of foreign steel is imported by domestic mills because they want lower-cost semi-finished steel. “The imported steel supply chain also employs hundreds of thousands of high-paying US workers,” added AIIS president John Foster. Industry statistics also reveal that over 70% of the steel used in the United States is domestically produced…
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