Nucor Corp. (NUE) Chairman Emeritus Dan DiMicco, whose steel-making company is one the chief beneficiaries of President Trump's global trade war, stands with the president in claiming the U.S won't be taken advantage of anymore, and besides, China is a big cheater.
DiMicco, 68, told the Jefferies Industrials Conference in New York City that the Trump administration's strategy of tax reform, trade reform, regulatory reform, and energy reform/infrastructure has not only improved the U.S.'s global competitiveness but also sent a message to the rest of the planet.
"We're re-opened for business in a way that we do want to partner with the world but don't want to be taken advantage of," said DiMicco, who's a member of the U.S Trade Representative's Advisory Committee for Trade Policy and Negotiations.
Chief among the U.S. antagonists is China, according to DiMicco, who was Nucor's CEO from 2000 to 2013 and chairman from 2006 to 2013. He said the country's Made in China 2025 plan, designed to boost manufacturing in sectors including robotics, aerospace, clean-energy cars and advanced basic materials, features various possibly illegal strategies.
China wants to continue its "formula of success," DiMicco said, which includes "stealing, coercion, cheating, hacking, economic predatory pricing, massive over-capacity, and functioning as a non-market state-controlled economy."
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He said that China produces more than 60% of the world's steel, DiMicco said. That compares with the 49.2% estimate of Chinese global steel production reported by the Belgium-based World Steel Association in May. Nucor is the biggest U.S. steel producer.
"Fundamental change must occur in China's approach to trade and economic aggressive for the world to be able to move forward in a way that supports open markets, free markets, market-based economies as opposed to what we have today," DiMicco said.
To be sure, President Trump has imposed a 25% tariff on imported steel and a 10% tariff on aluminum, a move that directly protects Nucor from foreign competition. The White House has said levying tariffs on steel imports from long-standing allies such as Canada is a matter of national security.
"Nucor stands to be the biggest beneficiary of steel tariffs as they prevent the illegal dumping of foreign steel into the U.S.," TheStreet's Jim Cramer wrote in a note to Action Alerts PLUS subscribers.
When asked by a conference attendee what a free market looks like, DiMicco replied, "The opposite of what China is doing."
U.S. allies, such as Canada and Mexico, "have enabled the Chinese to do what they are doing," said DiMicco. He also slammed the World Trade Organization, saying it is broken.
Since the steel tariffs on allied countries were imposed in June, hundreds of U.S. companies that buy foreign steel have requested an exemption from the tariffs. Nucor and United States Steel Corp. (X) have objected to 1,600 exemption requests filed with the Commerce Department over the past several months, according to a recent New York Times report, and their efforts have never failed.
Furthermore, Nucor CEO John Ferriola plans to pursue more cases against global competitors as foreign countries "play games" to evade trade laws. Ferriolla told Bloomberg some producers add chemical elements or other materials to products on which there are duties, thereby allowing them to skirt trade restrictions.
"You can't have a strong national defense and be a global leader with a strong manufacturing sector without a strong and healthy steel and aluminum industry," DiMicco said.
Shares of Nucor fell 0.1% to $64.37 at 11:30 a.m. New York time.