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Testimony of Mark Vaughn Before the U.S. International Trade Commission

Wednesday, November 30, 2016
 
TESTIMONY OF MARK VAUGHN
National Tooling and Machining Association
 
Before The U.S. International Trade Commission
Carbon and Alloy Steel Cut-to-Length Plate from Austria, Belgium, Brazil, China, France, Germany, Italy, Japan, Korea, South Africa, Taiwan, and Turkey
 
November 30, 2016
 
Good afternoon, Mr. Chairman and Commissioners, my name is Mark Vaughn, and I am speaking on behalf of the National Tooling and Machining Association, the Precision Metalforming Association, and their roughly 2,300 member companies. Our industry directly employs 215,000 hard-working Americans and supplies critical components to US industries such as aerospace, agribusiness, automotive, electronics, energy, and medical devices.
 
Many of our member companies, including my own family business in Tennessee, purchase tool steel. We manufacture tooling and dies used in capital equipment that shapes, cuts, and forms steel and other metals into parts shipped to our customers and on to a US consumer or exported.  Frankly, I am surprised to be here today, given that the Commission has treated tool steel as a separate product from commodity steel for over 35 years.
 
Though the Commission has not issued questionnaires to most of us, we ask the Commission to consider our observations as domestic tool steel purchasers and the primary drivers behind demand for tool steel. My testimony highlights two critical points:
 
FIRST, as US tool steel purchasers, we see tool steel as an entirely separate product from other steel plate.  Tool steels are most often heat treated to produce a Rockwell Scale hardness of 58-61, so if the steel is improperly formulated, it will fail. Because of its unique mechanical properties, tool steel is only used for specific high-precision applications. These are completely different from the applications for carbon and other alloy steel plate:
  • Tool steel is used for cutting, pressing, and extruding of metals, and forming tools such as dies, molds, and blades.
  • Carbon and other alloy steel plate is used in load-bearing and structural applications.

There is no interchangeability between tool steel and other steel plate.  Tool steel is sold by a totally different group of distributors and producers.  Due to its much more expensive chemical composition and production processes, tool steel is sold for roughly four times the price of other steel plate products.  Nobody buys tool steel unless they need it.

 
SECOND, we believe that the vast majority of tool steel imports do not compete with domestically-produced tool steel. While we prefer to buy American-made tool steel, most grades are not available from domestic sources, forcing us to purchase imported tool steel.  We do not base tool steel purchases on price—imports are already more expensive before the additional import duties.  Quality is by far the most important factor to our purchasing decisions.
 
In conclusion, we respectfully request that the Commission recognize that tool steel is a separate product from other steel plate, as it has done for the past 35 years.  Imposing high import duties on tool steel would force many of our companies and customers to reconsider whether to continue manufacturing tooling products in the United States.
 
Thank you.