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The Russians are coming to New Jersey — three times a month, with huge shipments of steel.
Far from being unwelcome, NLMK — short for Novolipetsk Steel — has been greeted with open arms by New Jersey officials, who credit the Russian mega-firm with revitalizing a moribund Paulsboro port and creating more than 100 local jobs.
As the flagship tenant, NLMK has promised to bring in at least 1.5 million tons of Russian steel annually — with plans to upgrade to 2 million.
It’s already pumping roughly 35,000 tons of steel a week to its U.S. plants — one in Indiana and two in Pennsylvania.
Its ship, the Doric Warrior, docked at Paulsboro Marine Terminal March 2 with its first load — while local politicians beamed and workers hustled to move the heavy load.
State Sen. Steve Sweeney, a Democrat, told NJ.com that the port was “generational” and its work would “sustain families for years to come.”
But inland, the welcome is not so rosy.
U.S. mills are braced for the latest round in the ongoing global steel wars — with the main concern now focused on whether President Trump will be friend or foe.
His “Buy America, Hire America” talk gave fresh hope to the U.S. steel industry.
On March 2, 10 leaders fired off a letter to the White House voicing their collective support for the “Buy America” standard that covers tax-payer funded federal infrastructure projects.
With Trump talking of a $1 trillion investment in America’s public works, U.S. steel makers want the President to keep the 1982 Ronald Reagan law as it is — requiring that steel be melted and poured in the U.S. to qualify as American-made.
“Our ‘Buy America’ laws are already riddled with loopholes, but they would all pale in comparison to allowing foreign steel to be used. The President should make it clear that Chinese, Russian, and other foreign steel does not qualify under ‘Buy America’ and won’t be used to rebuild America’s infrastructure,” said Scott Paul, president of the Alliance for American Manufacturing.
“U.S. firms and American workers who actually produce steel are standing by waiting for the President to take strong action on ‘Buy America,’” he said.
But many deep-pocketed foreign steel firms, NLMK among them, are lobbying hard to change the ‘Buy America’ definition to fit their global business model: steel that’s melted and poured overseas and shipped to the U.S. as slabs, to be reheated at American plants.
Such steel is cheaper than fully-U.S. made products — but the majority of the jobs go to workers doing the melting overseas, critics point out. Also, wages are lower and health and environmental regulations are often more lax in foreign countries — or in some cases non-existent. Many foreign governments also subsidize production to outbid U.S. competition, American steel makes contend.
By stripping away the “melted and poured” requirement in the 30-year-old “Buy America” standard, firms like NLMK — which employs 55,000 globally and roughly 1,100 in the U.S. — could compete for tax dollars used for public infrastructure.
NLMK paid more than $200,000 last year into powerhouse D.C. lobbying firm Squire Patton Boggs — the soft-landing pad for former House Speaker John Boehner (R-Ohio).
As more information emerges about Trump and his high-level advisers’ murky ties to Russia, fear are growing that NLMK’s connections could mean a direct line to the White House.
Vladimir Lisin, NLMK’s $10-billion chairman and largest shareholder, is a “crony” of Russia’s President Vladimir Putin, according to media reports.
Lisin’s company can sell and operate on the open U.S. market and it does qualify for the 1933 “Buy American” law.
Different from Reagan’s 1982 “Buy America” language, the 1933 legislation covers government purchases for specific items — and steel melted overseas and reheated in the U.S., like NLMK’s, does make the grade.
NLMK USA president Bob Miller said his company is an American enterprise that employs American steel workers at its three U.S. plants — and therefore should also be eligible to compete for “Buy America” infrastructure projects.
Some 8,000 additional jobs have been created through NLMK’s three-times a month steel shipments into Paulsboro — mostly trucking, railroad and supplier positions, he said.
“When you (have) provisions that preclude any foreign made raw material then I think you are being unfair to the industry and you are picking winners and losers,” said Miller, who added that every steel manufacturing company in America has some kind of raw material brought in from offshore sources.
“So we are concerned with any provisions that limit competition. What is that going to do? Raise prices for the consumer … and the government will be overpaying with limited competition,” Miller said.
The Alliance for American Manufacturing had a different take.
“Saying their Russian steel is American-made is like importing a foreign car, putting windshield wipers on it here, and then telling everyone that it’s American-made. It’s ludicrous,” said Paul.
“President Trump has been pushing his ‘Buy America, Hire America’ pledge for months. He will soon have the chance to deliver on this commitment by rejecting Russian steel masquerading as American product,” Paul added.
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