Trump 'Buy American' edict may have little impact on U.S. steel

Tue Apr 18, 2017 8:20pm EDT
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By Nick Carey and Luciana Lopez

DETROIT/NEW YORK (Reuters) - U.S. President Donald Trump's "Buy American, Hire American" executive order on Tuesday left questions about how the government would enforce the order and whether it would make a real difference in output and employment, according to steel executives and analysts.

"Buy American" provisions already exist in U.S. law but policing them has been difficult because of waivers granted to foreign companies that undercut their U.S. counterparts on pricing. Earlier on Tuesday, Trump ordered a review of government procurement rules favoring American companies to see if they are actually benefiting, especially the U.S. steel industry.

Trump's executive order promises to properly police those provisions, but avoided detail about how that will happen.

Bill Hickey, president of Chicago-based Lapham-Hickey Steel, which has seven steel mills in the Midwest and Northeast, said he has heard talk of "Buy American" for decades, but American or foreign contractors frequently find loopholes to use imported steel.

"Politicians all talk the same, but at the end of the day it just doesn't work," Hickey said, citing waivers to existing provisions.

Charles Bradford of Bradford Research said focusing on "Buy American" for U.S. steel does not take into account that some steel products - including tin plate and semi-finished products - are not made in the United States. So if enforced improperly, it could cause supply problems in a U.S. market in which up to 25 percent of steel was imported in the first quarter of this year.

"The people who have pushed for this don't have a clue and they don't know math," said Bradford.

Cutting off the supply of goods not made in the United States would create fresh problems for U.S. companies, he said.   Continued...

FILE PHOTO:  Staub Vice President Sandy Keplinger (L) presents a steel emblem of the state of Ohio to Republican presidential nominee Donald Trump (R) on a tour of the Staub Manufacturing plant in Dayton, Ohio, U.S. on September 21, 2016. REUTERS/Jonathan Ernst/File Photo