Biden's proposed "American Jobs Plan" - announced on Wednesday March 31 at a union hall in Pittsburgh, Pennsylvania - will allocate the funds over the next decade to upgrade highways, railways, and other transportation facilities, renew the electric grid, expand broadband access and revitalize supply chains, along with many other goals.
The projects will be paid for by increasing the corporate tax rate to 28%.
“It’s fitting that President Biden chose Pittsburgh to announce his ambitious, far-reaching jobs and infrastructure plan,” USW international president Tom Conway said in a statement. “This city and so many like it across our nation are the homes of not only the industries that will fuel this initiative, but also the union members who stand ready to do the work.”
The American Iron and Steel Institute (AISI) and Steel Manufacturers Association (SMA) emphasized that the projects will bolster demand for American-made steel, which emits less greenhouse gasses than steel produced elsewhere.
“We support the administration’s emphasis on strong domestic procurement preferences that help ensure that the steel used in our nation’s infrastructure is made by Americans for Americans and is melted and poured here and not abroad,” SMA president Philip K Bell said in a statement.
Bell noted that this has a dual benefit: "First, it creates more steel demand. For every $1 trillion invested in infrastructure, more than five million tons of carbon steel demand is created. Second, using American-made steel is better for our environment. The United States produces the cleanest steel in the world with the lowest CO2 intensity of any major steel producing country,” he said
The AISI agreed, noting that each $1 billion in infrastructure spending requires about 50,000 net tons of steel, and each $1 trillion invested in infrastructure has the potential to create 11 million jobs in our economy over the next decade.
“We are pleased that [Wednesday]’s proposal continues strong domestic procurement preferences for federally funded infrastructure projects which are essential to ensuring taxpayer dollars are used to purchase American steel and other made-in-America products,” Kevin Dempsey, president and chief executive officer of AISI, said in a statement.
However, neither AISI nor SMA were impressed with the way the projects will be funded. The AISI said that dedicated user fees are the best way to fund the projects, rather than a corporate income tax; and SMA called for an “all of the above strategy” to pay for the program, one that boosts user fees, gas tax revenue and public-private partnerships.
Domestic steelmakers and the USW have been united in support of Biden’s efforts to strengthen “Buy America” rules as well as US supply chains.
Biden signed an executive order during his first week in office aimed at strengthening domestic manufacturing. The administration is also looking to tighten rules on company waivers for foreign procurement, and aims to increase transparency on the products that are sourced abroad.
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $66.35 per hundredweight ($1,327 per short ton) on March 31, up by 0.82% from $65.81 per cwt on Tuesday. HRC reached $66.36 per cwt on March 24, the highest level on record since Fastmarkets began covering this segment of the domestic steel market in 1960.