1. Buy American/Buy America/ American Iron and Steel It’s Complicated
Buy American/Buy America/ American Iron and Steel It’s Complicated! Presentation to WWEMA 44th Washington Forum March 22, 2017
Carolina Mederos
Squire Patton Boggs (US) LLP

2. Domestic Preference Laws
Buy American Act of 1933 (Buy American)
Legislative Language: produced in the United States
Interpretation: substantial transformation
Applications: direct federal procurements; DoD (military bases), GSA, (courthouses, congressional buildings, federal buildings) FAA, Army Corps of Engineers, FHWA Federal Lands
Surface Transportation Assistance Act of 1982 (Buy America)
Legislative language: produced in the United States
Interpretation: all manufacturing processes; melting
Applications: FHWA – grants; FTA – Buy America and Buy American

3. Domestic Preference Laws
American Recovery and Reinvestment Act of 2009
Legislative Language: produced in the United States
Interpretation: initially varied by agency between Buy America and Buy American; Final – Buy America
Consolidated Appropriations Act of 2014 (American Iron and Steel – AIS = Buy America)
Legislative language: produced in the United States
Interpretation: all manufacturing processes; melting
Applications: EPA Clean Water and Drinking Water SRFs

4. Domestic Preference Laws
Water Resources Reform and Development Act of 2014
Codified AIS for Clean Water SRF and WIFIA
FY Appropriations Acts
Continued AIS for Drinking Water SRF
Water Infrastructure Improvements for the Nation Act 2016
Continued AIS for Drinking Water SRF through FY 2017

5. Buy American vs. Buy America/AIS
Substantial Transformation
All U.S. steel producers qualify
Changing an article into a new and different article of commerce, with a name, character, or use distinct from that of the original from which it was transformed
A change in form and function
More than simple assembly or minor finishing

6. Buy American vs. Buy America/AIS
Melting
In 1982 all mills melted; integrated mills that made steel by melting raw materials (iron ore, coal) were the only model
Buy America was intended to – and did – include the whole US industry
The industry changed; Buy America did not
In 1982 there were 35 integrated mills; today there are 11
Today the industry is dominated by mills that re-melt steel scrap, not mills that make steel by melting raw materials
Slab converters mills “hot roll” to degrees short of melting
All steel producers in the West are hot rollers/slab convertors
No steel producers in the West qualify under Buy America/AIS
Manufacturers of steel products need to keep two inventories: Buy American and Buy America

7. Integrated Mills/Slab Convertors
There are only three integrated steel companies with operations in the U.S.
Pellets
Steelmaking
Facility
Blast Furnace
Slab Caster
Iron Ore
Sinter
Caster
Limestone
Coke
Molten
Steel
Coal
Molten Iron
Imports exempt from Buy America
Slabs
Hot Strip Rolling
Reheat Furnace

8. EAFS/Mini-Mills/Recyclers/Remelters
Thin Slab Caster & Hot Rolling
Scrap, DRI, Pig Iron Exempt from Buy America
Electric Arc Furnace
Imports have exemptions and waivers from Buy America

9. Domestic Steel Sheet & Plate Producers
Slab Converters
Integrated Mills
Electric Arc Furnace Mills 9

10. Slab Converters Must Comply with Buy America; Other Mills are Exempt or Have Nationwide Waivers
Integrated Mills
EAFs/Recyclers
Slab Converter Mills
Key Inputs
Buy America Status
Coal, Iron Ore, Limestone, Coke
Exempt –imports count as U.S. origin
Scrap Steel
Exempt – imports count as U.S. origin
Steel Slabs
Subject to Buy America
Pig Iron, DRI, Processed, Pelletized and Reduced Iron Ore
Waiver—imports count as U.S. origin
Pig Iron, DRI, Process, Pelletized and Reduced Iron Ore

11. Products from Slab Converter Mills
Slab converter mills make steel sheet and plate products. They do not make structural steel (i.e. bar, rebar, beams, etc.).
End products manufactured from steel sheet and plate that could be used in highway, transit and water projects include:
There are only 11 integrated mills and 13 recycling mills in this market.
Signage and Sign Posts
Culverts
Guardrails
Pipes
Roofing
Tubing
HVAC
Road/Street Plates
Ceiling Panels
Fencing
Utility Boxes and Lighting Boxes
Steel Studs
Decking and Siding
Poles 11

12. HVAC ducting & components
Steel Sheet Products
Steel studs
Light poles
Culvert
Steel siding
Fencing & fence tubing
Grating
Roof decking
HVAC ducting & components
Pipe & tubing
Railcars
Guard rails
Cornerbead
Lighting
Metal lath
HVAC
Spiral welded pipe
Steel wheels

13. What is on the Horizon? The Administration Buy American/Hire American
What does it mean?
Presidential Memorandum for the Secretary of Commerce: Construction of American Pipelines
Applies Buy America to private transactions (Buy America and Buy American are tied to federal funding)
Specifies “…all manufacturing processes…from the initial melting stage…”
Specifically excludes steel products manufactured in the U.S. from semi-finished steel of foreign origin

14. Congress S. 181 Senator Sherrod Brown (D-OH)
Defines “produced in the U.S.” in the law as “all manufacturing processes, from the initial melting stage...”
Applies Buy America to DoD, GSA, Army Corps of Engineers, Amtrak, and FAA –currently Buy American.
Requires GAO to do a study of agency compliance with Buy America standard.
Prohibits spending federal funds for those agencies that do not meet Buy America (by definition, all of those that are Buy American by law.)

15. Congress H.R. 904 Representative Daniel Lipinski (D-IL)
Extends Buy America(n) to passenger facility charges (PFCs)-local airport taxes
Extends Buy America to:
Department of Agriculture Rural Utilities Service program
HUD Community Development Block Grant (CDBG) and HOME programs
Department of Interior, Bureau of Reclamation Rural Water Supply program
Department of Commerce, Economic Development Administration (EDA) funds used in Clean Water SRF projects
DOT/FRA RRIF loan program
None of these programs currently covered under any domestic preference standard

16. Congress H.R. 939 Representative Cheri Bustos (D-IL)
Codifies AIS (Buy America) for the Drinking Water SRF
Interior Environment Appropriations Bills Chairman Ken Calvert (R-CA)
Subcommittee has added language redefining AIS as Buy American (substantial transformation) for Drinking Water and Clean Water SRFs and WIFIA

17. Buy America vs Buy American
Efforts to extend Buy America to additional federal programs and private transactions
Keeps out foreign goods; eliminates many U.S. companies and workers as well
Limits eligibility to certain specific mills
No mills in the Western U.S. qualify
Efforts to redefine Buy America as Buy American
Keeps out foreign goods
All U.S. mills qualify