A Great Falls company and Montana’s U.S. senators have entered the fray over proposed duties on foreign steel, saying that higher costs could jeopardize expansion plans locally, cost jobs and threaten a $15 million investment.
The Department of Commerce recently found that steel from Canada, Mexico, and China is being dumped into the U.S., and would be moving forward with duties, as much as 6.7%, to counter the impact, officials said.
ADF International Inc. in Great Falls opposes the proposed tariff hike, GOP Sen. Steve Daines told the International Trade Commission (ITC) during a Jan. 28 hearing.
“These duties would substantially increase costs, place jobs at risk and threaten plans for a significant expansion in Great Falls that could create dozens of new, high-paying jobs and result in millions in new investments,” he said.
Dan Rooney, president and general manager of ADF in Great Falls provided written testimony in opposition to the duties. The Ironworkers also reportedly opposed the duties and gave written testimony.
“I don’t see any layoffs,” Rooney told the Tribune on Monday. ”But I see some uncertainty about our growth and expansion.”
ADF International’s state-of-the-art fabrication facility in Great Falls supports hundreds of good jobs and has resulted in tens of millions of dollars of investment in the community, Daines told the ITC.
It specializes in heavy and intricate steel components, high-volume projects, as well as conventional steel structures. Precisely the type of jobs and products necessary to build and improve our infrastructure.
Duties would substantially increase costs and place jobs at-risk, Daines said.
With 95% of the world’s population outside of the U.S., reducing barriers to trade and opening markets is critical,” Daines said. “Montanans know how important trade is to our state’s economy and that’s certainly evident in this case.”
Democratic Sen. Jon Tester wrote a Jan. 28 letter to the panel, urging them to reject any new duties on fabricated structural steel (FSS) from Canada.
“I am concerned about the negative effects that duties on Canadian FSS could have on Montana workers and infrastructure,” he wrote to ITC Chair David S. Johanson. “In Montana, this could put many highly skilled workers out of a job, and halt the advancement of our growing communities.”
He said tariff-free Canadian FSS products benefit Montana contracting and construction.
“Tariff-free Canadian FSS products are integral to this supply chain, keeping steel bids competitive and construction costs low,” Tester wrote.
A decision is expected in March.
Rooney said a 6.7% duty is “significant,” considering that the construction industry in general works on 5-8% margins.
Rooney said ADF, which is based in Canada, is in Great Falls because the company needed another location to satisfy West Coast demands in North America.
“We continue to grow,” he said Monday, adding it takes a collaborative effort, sometimes with competitors, to meet demand.
He said every piece of its projects is custom built and projects can overlap.
Rooney said they reach out to competitors or go to their Canadian headquarters.
“In our industry that is not unusual,” Rooney said. “We are spirited competitors but at times know need assistance to finish a project.”
He said the proposed tariffs will affect Great Falls’ ability to use its Canadian headquarters for spare capacity.
“It puts some concern into every project we now bid,” he said. “It’s taken one relief mechanism we have off our plate. We now have to be more careful about having the right capacity.”
He said in Montana it limits the projects the Great Falls facility is willing to bid because it no longer has the ability to bid.
March 9 is the date for the ITC to make a decision, can be extended. It’s unclear as to whether it will happen.
Rooney said he has been involved in the hearings, which began nearly a year ago. He said that time the company had three projects on the books where the general contractor said they were concerned about duties and ADF’s ability to proceed.
That was put on hold.
The company, which has 180 employees, had planned expansion of adding a shipping and receiving bay and some fabrication equipment to increase capacity, Rooney said. It also delayed plans to add 30 employees.
“We have good-paying jobs with very healthy benefits attached to them,” he said.
Rooney, who participated in the Jan. 28 ITC meeting, said he remains optimistic.
“I left the hearing believing we have a very good case,” he said. “However, I have limited experience and I don’t know.”