Texas lawmakers ride nationalism wave with ‘Buy America’ steel bill
By Rye Druzin Updated 5:16 pm, Friday, May 12, 2017
Texas lawmakers — embracing the wave of nationalism sweeping across the country — are pushing legislation that would require the state to “Buy America” steel for most of its infrastructure projects.
“Any decision other than buying American iron and steel is a decision to support any foreign governments over American workers,” bill sponsor and state Sen. Brandon Creighton, R-Conroe, said in an email. He blamed foreign competition — citing China and Turkey specifically — for a decline in Texas’ steel industry, which in 2016 saw major American steel maker U.S. Steel lay off hundreds at the company’s mill in the city of Lone Star as it curtailed production at that facility.
The legislation passed 23-7 in the Senate on May 3 and 114-29 in the House on Thursday. Gov. Greg Abbott’s office did not return an email for comment on whether or not he would sign the bill if it came to his desk.
The legislation comes as President Donald Trump has been pledging to boost manufacturing in the U.S. and to slow the loss of jobs to foreign manufacturers. Last month, the president issued an executive order requiring federal agencies to “Buy American and Hire American.” The directive is intended to boost protections for American-made goods and to save U.S. jobs. The order also calls for a review of the H-1B visa program for skilled foreign workers.
When asked if he was concerned Texans could lose business or jobs due to rising infrastructure costs, Creighton replied that “Texans already providing foreign-made steel assumed the risk years ago.”
The senate and house bills exclude state water infrastructure projects from the “Buy America” requirements, and would allow bids to include foreign structural steel if U.S. steel would raise project costs more than 20 percent. Creighton added that cities and counties would not be required to purchase American-made steel or iron for their own infrastructure projects.
In 2016 Texas imported 2.3 million metric tons of steel and iron goods valued at $2.1 trillion according to international trade data from the U.S. Census. In the same year the state exported 990,000 metric tons of steel and iron goods valued at $1.3 trillion.
In March the Department of Commerce determined that three countries — Japan, Taiwan and Turkey — had been selling steel into the U.S. at below market rates. Japan, which according to Census figures exported 1.9 million metric tons of steel and iron goods worth $1.2 trillion into the U.S. in 2016, was said to be selling steel for prices 210 percent below market value.
“Buy America is the sledgehammer with which you’re going to smash the fly,” said J. Tullos Wells, an attorney at the lawfirm Bracewell in San Antonio and Canada’s honorary counsel for the city. “The rule of court and trade organizations is the appropriate, and I think pretty useful, remedy when you do have clearly predatory practices.”
With goods crossing back and forth into the U.S. across the Canadian and Mexican borders — a part of the North American Free Trade Agreement or NAFTA — Wells says distinguishing what is and is not truly “American made” is becoming harder to determine.
“It’s hard to get something that is completely, discretely, U.S. made and never touches any other nation,” Wells said. “That’s just not really how it works.”
The legislation, if passed, “will have consequences for a lot of Texans who have no idea that they’re in the government purchasing business,” he said.
“It would not be a concern for our business, as I understand it today,” said Shea, who is president of San Antonio-based Alamo Iron Works, a 140-year-old local fabricator and distributor of steel and iron owned by Vallen Distribution. “And I don’t think it would be for anyone else, either.”
John S. Marshall contributed to this report.