WARREN Thomas Steel Strip being hurt by tariffs

THE VINDICATOR, YOUNGSTOWN
By DON SHILLING
VINDICATOR BUSINESS EDITOR
WARREN -- Tariffs designed to help the steel industry would force one Warren steel processor into financial losses and threaten the viability of its mill.
"This hurts and hurts us badly," said John Barden, director of battery sales for Thomas Steel Strip Corp., which employs nearly 600.
Tariffs approved March 5 by President Bush would increase Thomas Steel's costs and cause the profitable mill to lose money for the next three years, he said.
"It could mean that this plant is no longer viable. It could. We just don't know," he said.
At the urging of large steel producers, Bush approved the tariffs in order to stop foreign steelmakers from sending steel into this country at prices that were under their production costs.
Barden said Thomas Steel supports the tariffs but thinks the measure should exempt battery quality hot band steel, which is used by Thomas Steel to make battery casings.
U.S. Rep. Thomas Sawyer, an Akron Democrat who is vying to represent the Mahoning Valley in a reconfigured 17th Congressional District, visited the plant Wednesday and pledged his help in gaining an exemption. Sawyer said he will write letters to federal agencies who are reviewing the exemption requests.
Here's the situation: Barden said the company was unsuccessful in trying to gain an exemption before the tariff measure was approved. The measure, however, gave companies 120 days to make a case for an exemption to the U.S. Trade Commission.
Thomas Steel's case is that there is no domestic mill that can produce the type of steel it needs at an acceptable quality.
It imports steel for battery casings from a mill in the Netherlands and rolls, slits and treats the steel. Both the Dutch plant and Thomas Steel are owned by London-based Corus Group, but Thomas Steel has been buying steel from the Dutch plant for 20 years, long before they were joined in a series of corporate mergers.
Barden said Thomas Steel supplies steel for Duracell, Energizer and other name-brand batteries and those companies demand high-quality levels. Thomas Steel has tried to have domestic mills qualified as suppliers in the past but hasn't been able to.
If Thomas Steel started now to try to get a domestic mill qualified, it would take years, he said.
In the meantime, it would be paying a 30 percent tariff. The tariffs fall to 24 percent in the second year and 18 percent the third.
What this means: Barden said the first-year tariff would add between 7 percent and 10 percent to Thomas Steel's battery costs, which it won't be able to recoup because of contracts with the battery companies.
He said Thomas Steel has one domestic competitor for this business, but it imports the finished steel from Japan. The tariff measure exempts this type of steel when it is finished in Japan, he said.
Barden said the steel for battery casings represents 60 percent of Thomas Steel's business.
Steel for its other products, including steel for ammunitions and automotive parts, is produced from domestic steel and not subject to tariffs.
shilling@vindy.com