Steel Service CEO Says Clinton Steel Tax Proposal Falls Short

CLIFTON, N.J., January 12, 1999 — Washington must do even more to help the struggling U.S. steel industry, says David N. Deinzer, President & CEO of Denman & Davis Inc., a Clifton, New Jersey-headquartered steel service center. Responding to President Clinton's proposal Tuesday to offer $300 million in tax relief to help American steel producers who are suffering from an unprecedented flood of unfairly traded steel imports, Mr. Deinzer called the proposal "a good start," but noted that it falls short of what is immediately required. Mr. Deinzer is a past president of the Steel Service Center Institute.

"The current flood of unfairly traded steel needs to stop now," he commented. "We cannot afford to let the American steel industry be decimated by cheap imports."

Deinzer added that while many view low steel prices as a benefit, the severe decline in prices caused by dumping should cause concern for every steel consumer. While ports are sinking with excess steel, U.S. inventories are being devalued daily. If allowed to continue, the dumped steel will severely erode and eventually destroy the domestic steel industry, and the American steel consumer will ultimately become dependent upon foreign steel. "American steel producers are world class in both cost and quality; they can compete in the global market as long as it is a level playing field," he stated.

Mr. Deinzer noted that in addition to creating a financial crisis for domestic steel producers, the flood of foreign imported steel also adversely effects U.S.-based steel service centers. "Service centers require timely supplies of domestic world-class quality steel to support their customers — steel consumers — in a multitude of markets," he explained. "Relying on foreign steel cannot guarantee on time delivery or quality for consumers."

If the Clinton administration cannot come to an immediate resolve with the United States' trading partners, Deinzer said the only alternative is to establish a system similar to voluntary restraint agreements (VRAs), until the world financial crisis is over and traditional and established markets return to normal.

Denman & Davis is an ISO 9002 certified multi-location steel service center, supplying steel and other metal products to original equipment manufacturers, metalworking job shops, fabricators and maintenance and repair departments. The company is headquartered in Clifton, N.J.