TARIFF TALK
After rejected steel tariff exemption, recently reopened steel mill in jeopardy
A planned 100 jobs in Beaver County, Pennsylvania, are now in jeorpady after steelmaker Allegheny Technologies Inc. applied for an exemption from the Section 232 steel tariffs and was denied. The Pittsburg Post-Gazette reports:
The Pittsburgh specialty metals manufacturer had restarted the Midland mill last year in a joint venture with China’s Tsingshan Group, the world’s largest stainless steel producer. The joint venture hoped to hire 100 people who would earn a $125,000 salary on average.
Just weeks after the restart, the tariffs — imposed by the Trump administration in March 2018 — slapped a 25% penalty on the roughly 300,000 metric tons of stainless steel slabs that the joint venture planned to import each year from Indonesia.
Upon entering in the partnership with China's Tsinghan Group, Allegheny filed for an exemption and has waited more than a year for the decision. The exemption denial means Allegheny will have to reestablish how the joint venture will operate, if at all, at the recently reopened steel plant.
“While we are disappointed that the U.S. Department of Commerce denied the JV’s Section 232 tariff exclusion request, it does not change our strategy of returning ATI’s flat roll products segment to sustained profitability,” said Robert S. Wetherbee, ATI president and CEO, in a statement about the decision. “We will work with our joint venture partner to determine our next steps.”
This year, Allegheny revealed that its joint venture with Tsignghan spent $16 million on tariffs to import steel slabs for the Midland plant, losing $4 million and forcing a curtail production to 40 percent capacity. Had the steel tariff exclusion request been approved, the joint venture would have been refunded on money spent.
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