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In any blockbuster action movie, we may watch as good cops, bad cops, terrorists, spies and more chase one another through mazes of shipping containers in dark, secretive port scenes. This “bad guys assemble here” vision of global commerce is accentuated for audiences, but not all port problems are fictional plots in popcorn movies. In fact, we must scrutinize imported goods now more than ever and one of the often overlooked goods coming into America’s ports is steel.  

There are multiple rules and regulations about how steel is produced that help guide our understanding of its quality. From steel slab to coils or tubing, we must be able to rest assured all steel passes U.S. safety standards because that product moves from a production floor to the base of a skyscraper, the electrical infrastructure of an essential data center or into key elements of our automobiles. Safety concerns become tantamount when you’re on the 120th floor or speeding down a highway – whether of the information or automotive variety.  

And because steel is such a foundational material thanks to its growth and development, it’s also a major market commodity with important taxing rules and import guidelines. The guidelines, however, are pressured when bad actors in the industry flood the market with lower quality steel. It’s important to understand why our own domestic steel supply must remain strong, how other countries overproduce steel and affect export markets and how regulation can work to both strengthen our industries and prevent importing poor quality products.  

Domestic Steel Has a Bright Future  

According to Mobility Foresights’ market intelligence, U.S. domestic steel demand is set to grow steadily between 2024 and 2030. Infrastructure demand is finally gaining momentum with the Biden administration’s Inflation Reduction Act and construction and automotive industries continue to drive steel demand as well. This positive outlook on the industry reaffirms the need for a quality product as we add steel into our domestic growth initiatives. Equally important to this growth are the automation advances in the manufacturing sector that can enable our steel production growth to be more efficient. This current confluence of factors positions the U.S. to advance its position in the global steel market, creating a potential boon for the industry and, subsequently, primary and secondary labor forces.  

U.S.-based steel production thwarts supply chain delays in a few ways. First, rigorous U.S. quality standards for steel are guiding its production. Compliance at American steel mills means the steel they produce meets and exceeds our strict quality framework. With these guidelines built into production, finished product is ready for use, not stalled in a port awaiting further inspection.  

Second, a U.S.-based steel production pipeline helps manufacturers streamline operations and gain efficiencies with just-in-time ordering. Projects can move forward in timely ways and distribution of product can be better managed to meet timelines and facilitate logistical planning. This has a trickle-down power to developers, contractors and building engineers as they, too, rely on getting projects done on budget and on time and imported steel’s journey can be too long or unpredictable to benefit end users’ efficiency.  

U.S. steel production also supports job growth in numerous industries, so beyond sustaining and growing a steel mill labor force, timely steel delivery and enough production to meet demand also means supporting construction and development industries and the labor force tied to these projects overall.  

Imported Steel’s Hidden Costs  

Opting for imported steel may offer lower initial costs that could surprise builders with a large bill in the long run. As mentioned, domestically-made steel conduit is held to strict standards when it comes to manufacturing and coding, however, those same rules may not apply to imported steel. Many foreign manufacturers are improperly coding products as steel conduit to avoid tariffs. These misclassified products will make their way into US infrastructure putting them at risk of physical damage from impact, chemical vapors, fire and more.  

The monitoring of products is more complex when manufactured overseas. U.S. facilities require regular testing; however, it is more difficult for international facilities to receive the same number of tests due to the sheer number of facilities which span geographic locations. Chinese factories may attempt to produce a broad array of products and try to have them listed by a nationally recognized testing laboratory. Steel conduit, for example, is often made in factories in other countries that are not designed to make the product so they end up with coatings or other physical attributes that are out of spec or even subpar. 

Illegal imports of steel from Mexico are of tremendous concern to American steel manufacturers. Most concerning is that, despite limitations on imports to the U.S., an influx of Mexican steel continues to make its way into the U.S., is mislabeled and co-mingled with American-made steel and often dumped for far below market value.  

Enforcing the Border isn’t just about Immigrants  

Tariffs on imported products have not been properly implemented as customers and border protection agents are not equipped with adequate training and resources. The complexities of discerning the differences between steel pipes requires proper training and education. Increasing resources at the border also enables quality assurance and product testing to meet our rigorous guidelines.   

Earmarking funds for customs and border protection is a necessity to ensure enforcement of commercial regulations. Investing in the implementation of the tariffs will help to ensure builders are purchasing legitimate materials, incentivized to buy domestically and producing safe infrastructure.  

The enforcement of tariffs on steel products will have a chain reaction that encourages economic advancement. Foreign manufacturers will be discouraged from infiltrating the market with poorly made product at dumping prices and encourage builders to purchase domestically which, in turn, supports American businesses and creates jobs. 

Some popular steel stocks include: Steel Dynamics (STLD), United States Steel Corporation (X), Reliance (RS), ATI (ATI), Carpenter Technology (CRS), Commercial Metals (CMC), Nucor (NUE), Cleveland-Cliffs (CLF), ArcelorMittal (MT).