This part two of our sit down with Steel Manufacturers Association President Philip K. Bell at the recent S&P Global Platts Steel Markets North America conference here in Chicago. Bell currently serves on the Department of Commerce International Trade Advisory Committee on Steel (ITAC 12), advising the Secretary of Commerce and United States Trade Representative on trade policy, trade agreements, and other trade related matters that benefit U.S. businesses, workers, and the economy.
Jeff Yoders: You mentioned that the proposed border-adjustment tax is something you have to be very, very careful about.
Philip K. Bell: Ironically, when I look at things the administration should prioritize, I would really like to see infrastructure rise higher on that top five list as opposed to things like a healthcare repeal because that’s one clear way that you can jump start the steel industry.
The steel industry, to me, if you look at it in the simplest terms, is based on cost and demand. You can help lower steel producers’ costs by reducing taxes and regulatory burdens, but you can increase demand by having this $1 trillion infrastructure plan and that would be very important. Making sure you deal with countries that dump, subsidize exports, etc. would also help.
JY: Using countervailing duties, anti-dumping duties and the existing tools commerce has, right?
JY: I asked Chad Utermark, executive vice president of Nucor, what, exactly, their representatives had heard about when we might get to see the ideas for an infrastructure bill precisely because of that. This seems like a slam dunk for economic growth for all the industries that support construction. Why isn’t it being pushed more?
PB: We certainly would like to see infrastructure investment made a higher priority. I love the idea of public-private partnerships. The P3 approach is good, you’re going to bring better managerial skill with people who can manage the entire supply chain of infrastructure investment. Keep in mind, infrastructure can be financed this way, but it also needs to be funded (to an extent by the government). There are some infrastructure projects that are very important but might not appeal to private investors. They might not be easy to get done.
They might not have a quick return on investment. Some take decades to complete. This is not necessarily the only way to do it. Our politicians need to have the political will and the backbone to understand that, yes, they can use P3s to jump-start this process but there are certain infrastructure things that we, as a nation, to be a great nation, our government needs to fund and make sure that’s going to happen.
I’d add that it’s important to get infrastructure projects underway because it has a massive psychological effect on the economy and populace. You can see roads getting repaired, you can see airports being expanded and upgraded, you can see bridges being built. These are important things for people to see to make them feel positive about our economy so, aside from the fact that it will take some time to get these projects started, it’s important to get an infrastructure plan in place because of how it can benefit the national psyche.
JY: The thing about P3s is they can be pretty much any kind of public-private funding mechanism. There are professionals out there whose entire expertise in the construction industry is to make PPPs work, does there need to be more clarity out there about what will be necessary to finance these projects that way?
PB: I think you need to more clearly define what is infrastructure. For some it might be a highway, for some it might be a toll road, for some it might be airport upgrades or improvements, in some areas the biggest need is high-speed broadband. There’s also projects like dredging ports to get bigger ships in. There needs to be a more affirmative case made to the voters of what exactly all of this entails. There are some investors, too, that don’t need this tax break. A lot of pension funds do P3 investment and they don’t need that break because they already have tax favorability status. You’ve got to look at ways to make sure this investment is something that will get what needs to be done completed, but also encourage the right kind of people to come in and work and invest in the right kinds of projects.