Few people embody Donald Trump’s vision of fair trade more than Dan DiMicco.
The 66-year-old former chief executive officer of steelmaker Nucor Corp. (IW 500/68) learned to fight for his company and his industry by going after his foreign competitors in trade cases. Moving beyond the pro-free trade vision of Nucor’s founder, DiMicco led an industry push that eventually persuaded the U.S. government to pile on tariffs as high as 500% on Chinese steelmakers.
“Nucor throughout its history, never really got into the trade issues,” DiMicco, who’s heading the Trump transition team’s efforts to reshape the Office of the U.S. Trade Representative, said in an August interview. “As we got bigger as a company, we found out we didn’t really have a choice but to get involved.”
While his current role is advisory, DiMicco’s experience combating cheap imports from China to Brazil could make him a candidate to head the USTR, according to trade lawyers and steel industry representatives. The trade representative will serve as chief negotiator and principal adviser to a president who made protectionist rhetoric central to his campaign to bring back jobs to rust-belt states, working alongside billionaire steel investor Wilbur Ross as secretary of commerce.
Shares of American steel producers have surged this year alongside a rapid recovery in domestic prices of the metal as demand increased. The stocks have also gained as the U.S. handed out punishments for dumping and unfair subsidies -- including massive duties on Chinese cold-rolled steel used in autos and appliances.
Optimism in the industry, which intensified after Trump’s surprise election win, is a far cry from the previous two years, when a slowdown in China resulted in a flood of exports, plummeting prices and market distress for producers.
While details of Trump’s trade policies haven’t been released, he has promised to levy “every lawful presidential power to remedy trade disputes if China does not stop its illegal activities.” He vowed to use local steel for infrastructure projects and create U.S. jobs and wages through negotiation of fair trade deals.
DiMicco joined Trump’s campaign in the spring as senior trade adviser as it became clear the real-estate billionaire would be the Republican Party nominee. Since then, he’s been a steadfast proponent of Trump’s trade platform, maintaining a hard line against China, which he accused in August of “extreme protectionism at home and deadly predatory pricing around the world.”
Neither the Trump transition team nor DiMicco responded to requests for comment after the election. A fax seeking comment from China’s Commerce Ministry wasn’t returned.
The plain-spoken metallurgist who worked his way up from the plant floor took Nucor’s reigns in September 2000, as its shares approached an eight-year low. Over the next 12 years he completed more than 50 acquisitions and the Charlotte, N.C.-based producer’s shares quintupled in value.
But it was his role in laying the groundwork for securing huge penalties against Chinese imports that makes him a unique candidate to be Trump’s top trade voice and bring his experience to other industries.
Trade Battles Worth the Effort
Early in his tenure, U.S. steelmakers criticized producers in Japan, South Korea and elsewhere for dumping cheap metal in the U.S., causing an erosion of profits, idling of plants and thousands of jobs cuts. But founder Ken Iverson asserted that Nucor was pro-free trade, arguing that imports would hurt competitors more than Nucor.
DiMicco saw things differently, figuring trade battles were worth the time and money given the rewards to the industry generally and to Nucor in particular as one of the largest producers.
Rather than relying solely on protracted mediation efforts via the World Trade Organization to level the playing field, Nucor and other domestic producers also took the more direct and aggressive route via the U.S. International Trade Commission, an independent, quasi-judicial federal agency. Cases against unfair advantage were leveled not just against China but traditional allies like the U.K., South Korea, Brazil and India.
“They’re not in the business to make a profit, they’re in the business for political stability,” DiMicco said in August, referring to Chinese steelmakers. “I’m encouraged that the steel industry is on better footing because of its victories it has had on enforcing the rules of trade and holding people accountable on the tariffs and duties.”
If Trump is looking for a trade representative who is outspoken and doesn’t shy away from confrontation, DiMicco may be his man. While his direct approach can be disconcerting for some, it may go down well in Congress, according to Philip Bell, president of the Steel Manufacturers Association in Washington.
Refreshing Communication Style
“His communication style is actually something that’s refreshing here in D.C.,” Bell said in a telephone interview. “He doesn’t get nuanced. It’s very clear.”
One of the biggest myths, according to Bell, is that the U.S. is a services and financially centered economy. “What Dan has been articulating for years is that the backbone of the economy is manufacturing,” he said.
DiMicco’s relationship with the United Steel Workers has been complex given Nucor, unlike its major rivals, isn’t unionized. Bell recalled that USW President Leo Gerard sat with DiMicco at a panel earlier this year and joked that the audience would be surprised to know that when it comes to election issues, the two agreed on just about everything except for who should be president.
“DiMicco understands first-hand the importance of manufacturing, and specifically the role steel plays in a vibrant economy,” Gerard said in an e-mailed statement. “He also knows firsthand the damage caused by unfair and illegal trade to domestic steel production, manufacturing and American workers.”
Lourenco Goncalves, CEO of iron-ore producer Cliffs Natural Resources Inc., supports DiMicco for the trade post. “That will be extremely positive for the industry because we don’t need to educate these guys, they know how everything works,” Goncalves said in an interview last week.
Rather than formulating deep protectionist policies or relying on the WTO, Trump may be more aggressive on enforcement, at least initially, to get quick results, according to Tim Brightbill, a partner at Wiley Rein LLP in Washington. For example, he could broaden the definition of unfairness to include China’s less-stringent environmental and labor rules.
“The Trump administration will find that the WTO process can be frustrating,” said Brightbill, who has worked with Nucor on anti-dumping cases. “DiMicco is an advocate of aggressive use of trade laws and any other tools to address unfair trade practices.”
By Joe Deaux