Consequences Of Buying Foreign Product – How Does It Impact You?
In the world of steel conduit and elbows, couplings & nipples (EC&N) the tide is rising with regards to more market segments requiring Made in USA product. The current administration has a strong pro-steel position and it is pushing many government agencies to actively enforce current domestic requirements and drive domestic consumption higher. To that end, it is paramount that the marketplace is aware of these changes and that distributors stay in front of the risk and rewards that go with these changes.
On the EC&N front many U.S. producers exited the business +10 years ago because they could not compete with imports being dumped into this country and were forced to close their doors. Due to these closures, almost 30% of the supply is offshore product. The trend is now moving back towards domestic consumption and we are ramping up production to support this growing demand.
End market consumers (federal, state and local agencies) are now triple inspecting steel products coming their way to make sure it is domestic. We have seen domestic certification requests double in the last 9 months. We have also heard multiple stories about foreign Conduit and EC&N must be uninstalled and replaced with domestic product, a costly expenditure. We are also seeing more non-government related industrial segments (Steel plants, Mining and others) along with pro union markets push to drive consumption of “Made in USA” products.
“Buyer Beware” has become the message time and time again as some conduit producers still attempt to save a few pennies by buying foreign couplings. When “China” is stamped in the coupling it becomes hard to convince an inspector that the pipe itself is domestic.
U.S. Customs is now playing a more active role in making sure any foreign steel conduit or EC&N coming into this country has the country of origin clearly marked on each piece, so the consumer knows where it came from. They will assess serious fines and seize product that is not marked properly.
We spend a fair amount of time training and educating customs inspectors on the characteristics of steel conduit and EC&N to assist in their port inspection process and guide them on what to look for from those whom are playing games with marking and labeling products.
On July 15th the President announced actions to enhance the “Buy American Act” requiring 95% domestic content on steel products. This follows a bill S.2056 “The Build America, Buy America Act” for tax payer funded infrastructure and public works projects that was recently introduced into the senate.
The marketplace is pushing to support products made in the USA. To that end, Zekelman Industries continues to hire more workers and reinvest in our local communities to support our foundation and to promote the fact that we make our product domestically. Supporting domestic manufacturing effects several of Zekelman Industries’ brands. We are introducing a series dedicated to explaining the importance of buying domestic and where you might go wrong if you aren’t aware of the risks of sourcing product elsewhere. We would like our followers to pay attention to this series as you will hear from a few of our industry leaders regarding this topic.