SC mulls requiring American-made steel for roads, bridges and other public projects
The steel industry championed the tariffs on foreign steel but is now facing another hurdle as it rushes to build new mills.
SEATTLE (Scrap Monster): South Carolina steel companies are pushing a bill to require state and local officials to build all taxpayer-funded projects using U.S.-made steel and iron.
A House panel voted unanimously to advance the bill Tuesday after hearing from steel giant Nucor Corp., as well as American SpiralWeld, a company with operations in Columbia that turns Nucor’s steel into pipe.
“If we’re going to spend our taxpayer dollars, we would rather it come back to places like Darlington County,” said Republican Rep. Richie Yow, whose district covers a Nucor steel plant in Darlington.
The federal government has had U.S. production requirements for federally funded road projects on the books since the 1980s. Congress has tightened those mandates over the years, including most recently in the Biden administration’s massive infrastructure law.
Yow said the bill, which he sponsored, takes those federal requirements and applies them to the state.
Texas passed similar legislation in 2017, and Florida did the same last year. Legislators in the major steel state of Ohio are currently considering the measure, said Bill Paxton, a national lobbyist for the iron and steel industry.
Rep. Robert Williams, D-Darlington, raised concerns about how the measure might raise the cost of public projects, which already have ballooned in recent years.
Scott Baier, an economist at Clemson University, said those concerns may be founded.
“While such mandates increase demand for domestic producers, they also raise input prices,” he said. “If the bill passes, and increased demand drives up the costs of the construction projects, then citizens may be impacted because the higher construction expenses may reduce the number of infrastructure projects, reduce overall spending flexibility or imply higher taxes in the future.”
American-made steel is the most expensive in the world. However, the price paid for foreign steel has risen to a more even level since the Trump administration increased import taxes, known as tariffs, imposed by the U.S. government on companies that import steel into the country.
The bill also seeks to address the issue by waiving the requirement if a government can’t get U.S.-made steel fast enough or if the use of American steel increases costs by more than 25%.
Those carveouts were enough to calm worries from state agencies, especially the S.C. Department of Transportation, said Rep. Mark Smith, R-Daniel Island.
No one testified against the bill. It advanced to the full House Labor Commerce and Industry Committee.
Yow said the higher costs don’t bother him. He’d rather have peace of mind that the steel going into public roads, bridges and buildings is going to hold up.
“If it costs $5 more a yard or $5 more a ton, it’s worth the life that it saves in the end,” he said.
The U.S. steel industry has been floundering for decades, shuttering mills and laying off workers amid increased global competition.
That includes the Liberty Steel Mill in Georgetown, which closed for good in 2024 after nearly a decade of on-again-off-again operations.
“I wish that we had had this bill a few years ago and our steel mill would probably still be open,” said Democratic Rep. Carl Anderson, whose district includes the former mill site.
Paxton, along with Devin Webster, a Nucor vice president in the state, blamed cheaply made steel from Turkey, India and China for the industry’s decline.
Nucor employs some 2,500 South Carolinians at multiple locations across Florence, Laurens, Lexington, York and Berkeley counties, as well as in Darlington, Webster said.
While China is the world’s largest steel producer and exporter, it sends very little to the U.S. — less than 2% of total imports into the country, according to U.S. Census Bureau data. President Donald Trump passed a 25% tariff on Chinese steel during his first term, pricing the country out of the market. He’s since upped that to 50%.
Most steel coming into the country comes from Mexico and Canada, followed by Japan, South Korea and Germany. Imports make up about a fifth of all steel used in the U.S.
The steel industry championed the tariffs on foreign steel but is now facing another hurdle as it rushes to build new mills. Demand is not keeping up, the Wall Street Journal reported in August.
Interest rates and the rising cost of steel means less demand for cars and construction that the industry relies on to buy its product.
Baier said policies, such as this legislation, aim to increase that domestic demand. How much of a dent these proposals might make in the industry’s struggles remains to be seen.
Courtesy: www.scdailygazette.com