The CEOs of two of the biggest U.S. steelmakers this week said they are watching closely – and prepared to speak up if they don’t like what they see – the ongoing talks between U.S. and European Union trade representatives about overhauling tariff regimes put in place by the Trump administration in 2018.
Both Lourenco Goncalves of Cleveland-Cliffs and Leon Topalian of Nucor told analysts and investors on their companies’ third-quarter conference calls that they support the broad aims of U.S. negotiators, who are looking to replace the so-called Section 232 tariffs with a tariff-rate quota system that would allow for the duty-free importing of a certain amount of European steel before imposing tariffs. But Goncalves was very vocal about holding the line with EU negotiators, saying the trade bloc has “no business playing both sides” of the broader steel production debate involving China.
“They need to work with us. They need to understand that, if they are with us, they should not be with China,” Goncalves said Oct. 22. “Everybody understands that we need to protect ourselves. Not allowing the Europeans to take advantage of us at the negotiating table is extremely important.”
Goncalves added that, when he gets chances to speak with officials in the Biden administration, his message to them is simple: “Pay attention to Europe. They are not our friends.” And he said that he has heard from Cleveland-Cliffs’ union – about 20,000 of the company’s 25,000 workers are unionized – that they are on the same page on this matter.
“We are going to be very vocal in expressing our opinion,” Goncalves said.
Topalian wasn’t quite as feisty as Goncalves on his team’s conference call Oct. 21. But he did echo his peer in saying both that his team has been in touch with Biden officials about a new agreement – word earlier this month was that it might be completed before the start of November – and that it will continue to make its voice heard.
“232 will go away at some point but it is a vehicle to bring other nations to the table to negotiate better trade arrangements,” Topalian said.
The Nucor leader added that a fair update to U.S.-European will help facilitate this country’s transition to a more sustainable economy. Steel made in the U.S., he said, is significantly cleaner than many import products and thus should be used wherever possible during the construction of renewable energy projects.
Goncalves made his comments after Cleveland-Cliffs reported record quarterly numbers for revenues and net income of $6.0 billion and $1.3 billion, respectively, as the company's recent acquisitions combined with strong pricing trends. As a result, Cleveland-Cliffs shares (Ticker: CLF) jumped nearly 13%, pushing the company's market capitalization to nearly $12 billion.