Politics

Commerce Department Denies Tariff Exclusions for NLMK

YOUNGSTOWN, Ohio – The U.S. Department of Commerce has denied NLMK Pennsylvania exclusions from the Trump administration’s tariff policy that took effect last year.

The exclusions would have allowed NLMK – a Russian-owned steel mill in Farrell, Pa. – to import steel slab into the country and then process it for customers in the United States without paying a 25% tariff that the administration enacted in March 2018.

According to an updated docket posted on regulations.gov, Commerce denied almost all of NLMK Pennsylvania’s requests for exclusion status.  It also denied exclusions for NLMK’s operations in Indiana.

According to documents, Commerce denied 74 separate requests for exclusions for carbon and alloy semi-finished slab from the provisions of Section 232 tariffs. Just one exclusion request by the Farrell operation is listed as in the surrebuttal period, meaning the request is still under review, according to the docket. 

In March, U.S. Sen. Pat Toomey, R-Pa., and U.S. Rep. Mike Kelly, R-16 Pa., urged U.S. Secretary of Commerce Wilbur Ross to consider petitions filed a year ago by NLMK USA requesting exclusions from the Trump administration’s tariff policy.

NLMK Pennsylvania employs about 700 at its mill along Roemer Boulevard.  The company earlier filed supporting documents saying that the exclusions are necessary because there isn’t enough domestic slab production to supply the local mill.

The Farrell mill imports most of its steel slab from Russia, then re-heats the material and rolls it into coil to supply the domestic market. Novolipetsk Steel, one of Russia’s largest steel conglomerates, is the parent of NLMK. 

Between 2016 and 2017, NLMK said that it was able to secure just 2% of its slab domestically and was forced to import the rest. “This deficit will persist even after the tariff, because integrated mills have no incentive to sell slabs to their competitors, and their rolling capacity would still be higher than their slab-making capacity,” the company wrote in supporting documents.

According to NLMK, the 25% tariff would “chill plans to expand investments in U.S. steel operations.” The company reported it had to this point paid $160 million in tariffs. 

“Without an exclusion for semi-finished steel slabs, the tariffs will have the perverse effect of killing U.S. steelmaking jobs and potentially putting our company out of business,” NLMK Pennsylvania’s president and CEO Robert Miller wrote last year to U.S. Commerce Department officials.

The company said it has plans to invest $664 million into its Pennsylvania and Indiana plants between now and 2022.  These investments include a proposed $100 million re-melt furnace at the Farrell plant. 

Published by The Business Journal, Youngstown, Ohio.