A step taken by military planners to address war time shortages of steel is now having an impact on the domestic steel industry. YNN's Bill Carey says New York's senior U.S. senator says it’s time to step back.

  To view our videos, you need to
enable JavaScript. Learn how.
install Adobe Flash 9 or above. Install now.

Then come back here and refresh the page.

AUBURN, N.Y. -- U.S. steel companies, like NUCOR, have been concerned since 2009. It was then that the Pentagon, looking to deal with shortages of steel from U.S. producers, loosened its rules on what it would consider American mad, allowing any steel, processed in any way in America, to be considered domestic.

“So they could import raw steel from China and have some guy here in America polish it at the very end and they'd say it was made in America. It made no sense,” Senator Charles Schumer said.

Schumer opposed the change three years ago. He told workers at NUCOR steel in Auburn that it was a bad idea.

“That regulation undercuts the success and the growth of a company like NUCOR and undercuts the success and the growth of our steel industry in Upstate New York and here in America,” Schumer said.

Workers and officials at places like NUCOR say they felt abandoned.

“NUCOR invested a significant amount of time and resources and money during this economic downturn to develop this product. To serve our U.S. military. When a U.S. company is willing to invest, should we support that investment, as well?” said MaryEmily Slate, NUCOR Auburn General Manager.

But now things have changed. Schumer says with the war in Iraq over and with the war in Afghanistan beginning to wind down, the military can no longer use the excuse of short supplies. He says the rule needs to be re-imposed. That American made steel must be American made.

Schumer has written to Defense Secretary Leon Panetta requesting the change and dismissing arguments that allowing competition for sales from overseas helps lessen pressure on the defense budget.

“People always make this argument. You know, it's great to have all these imported goods. And, in the short run, yeah, it saves us a little money. And then we lose jobs and America has less wealth,” Schumer said.

Schumer expects Panetta to respond favorably to the request. He says thousands of jobs across America hang in the balance.

NUCOR Steel operates two plants in Upstate New York. One is in Auburn. The other in Chemung. Total employment is running at just above 600 jobs.