Trade & Economic Competitiveness
The United States is one of the most competitive places in the world to manufacture steel. The nation enjoys marked advantages in practically every aspect of steelmaking, including raw material availability, energy costs, workforce productivity, access to capital and technology, and proximity to a sizable domestic market.
The U.S. has the world’s most open markets, and SMA supports free and fair trade based on the principles of comparative advantage. The same openness, however, should not be extended to illegally traded, dumped and subsidized material. The U.S. cannot allow other nations to directly violate the rules of international trade at the expense of the domestic economy.
Transportation & Infrastructure Investment
Sufficient, long-term infrastructure investment has the ability both to provide an immediate boost to employment levels and to make the U.S. more competitive in the decades ahead. SMA wishes to see increased investment levels as well as efforts to ensure the future solvency of the highway trust fund. Increased user fees, including the gas tax, should be a key source of necessary funds.
Taxpayer-funded projects should utilize domestically melted and poured steel to the greatest extent possible in order to ensure that the full benefit of investment is realized in the domestic economy. Long-standing Buy America provisions must be maintained.
SMA member companies share a common goal of achieving safe, productive, and communicative workplaces. SMA believes this objective can be promoted through collaborative dialogue between manufacturers and their employees, supported by sound government policy.
SMA’s members promote safety improvement through employee engagement in comprehensive safety and health programs. All employees are provided with the training and personal protective equipment that they require to perform their jobs safely. The EAF steel industry’s efforts have been rewarded with dramatic improvements in safety records.
Steel production is an energy-intensive process that requires reliable and economically competitive energy supplies. The U.S. steel industry spends over $18 billion annually for electricity, and energy can constitute up to 15 percent of the cost of steelmaking.
The success of horizontal drilling techniques has dramatically and permanently altered that landscape and the country’s outlook because of massive amounts of North American oil and gas that are now economically recoverable. This has created a vital opportunity to establish a more secure, affordable and cleaner energy infrastructure that meets the future needs of a growing and robust American economy. Improved development of domestic energy resources makes sense from virtually every perspective, and should be a national priority.
SMA’s members make a contribution to the environment through recycling that is unsurpassed in any industry. In addition to strength and value, recyclability is one of steel’s best attributes. New steel products from U.S. EAFs typically contain over 90 percent total recycled content. Steel can be recovered and remanufactured repeatedly to make new high quality products.
By using steel scrap as a primary feedstock, EAF steel companies consume millions of tons of ferrous scrap that might otherwise be deposited as refuse in landfills or disposed as litter. Steel is recycled five times more than the sum of aluminum, copper, lead, nickel, chromium, and zinc combined.
Business Tax Reform
U.S. business tax policy places domestic manufacturers at a disadvantage. Manufacturers in the U.S. are among the most highly taxed companies in the world. The U.S. corporate tax rate, a combination of federal and state taxes, is 38.9 percent. After-tax profits are then taxed again when received by shareholders as dividends or capital gains.
The U.S. now has the highest statutory tax rate among industrialized countries. The gap between the effective tax rate of the U.S. and those of its nine largest trading partners is between nine and 11 percent, clearly benefitting foreign producers with higher after-tax rates of return.
The steel industry workforce consists of approximately 150,000 directly employed men and women who are highly skilled, technologically competent, and committed individuals. The industry also indirectly generates over one million jobs in supporting industries. SMA members provide jobs that contribute positively to communities, families, and other industries and businesses.
SMA members regard their employees as their greatest assets, and are committed to the health, safety, productivity, and quality of life of each individual. They recognize the valuable contribution of their employees, and pay highly competitive wages, in addition to other incentives based on production, quality and profitability. They also offer employee benefits such as health plans, retirement plans and tuition assistance programs.