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Steel tariffs not a good long-term solution: Liberty Steel USA chief

Pittsburgh — The US Section 232 steel import tariffs were imposed last year to support US steelmakers, however tariffs are not necessarily a good long-term solution for the industry, Vikrant Sharma, president of Liberty Steel Holdings USA, said Thursday.

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Instead, there are a number of steps the US government could take to help the domestic steel industry be successful without relying on import restrictions, Sharma said, speaking at the S&P Global Platts Steel Markets North America conference, held Thursday in Chicago. What would be more beneficial for steelmakers is access to lower financing, support for workforce development, and improved infrastructure and logistics across the US, he said.

Freight logistics are "one of the great inefficiencies in the US," Sharma said, adding that it costs more to move a ton of steel from Illinois to Pennsylvania than from China to New Orleans.

"There is a shortage of trucks and rail cars," he said.

Liberty -- which entered the US steel market in 2017 with the acquisition of ArcelorMittal's former wire rod mill in Georgetown, South Carolina -- has plans to expand its North American capacity from its current installed annual rate of 1.8 million st to 5 million st by 2020.

"North America is critical to our business and growth strategy," Sharma said.

In early 2019, Liberty closed on its acquisition of Keystone Steel and Wire and has set its sights on becoming the largest wire rod producer in the US within the next year. However, to get to 5 million st/year, the company is looking beyond long products, Sharma said.

"Our goal is to reach 5 million st and we understand we cannot do that with long products alone; we have to have a combination of longs and flats products," he said.

Noting the large availability of scrap and low power costs in the US, Liberty's acquisition strategy is focused on going after electric arc furnace producers, Sharma said.

"We try to go into areas where there is scrap and the power [costs] are low," he said.

-- Justine Coyne, justine.coyne@spglobal.com

-- Edited by Derek Sands, newsdesk@spglobal.com