Bipartisan Group of Senators Want Obama to Get Tougher on Steel Overcapacity

By Elizabeth Brotherton-Bunch
Oct 04 2016
Courtesy the White House

Meanwhile, Donald Trump is under fire for using China-made steel in construction projects.

The time for action is now.

That’s the message a bipartisan group of Senators have for President Obama, urging him to “consider all options for increasing China’s compliance with its international trade obligations” in a Sept. 30 letter sent to the White House.

The Senators specifically want Obama to do more to address the steel imports crisis, which has led to nearly 19,000 U.S. layoffs and dozens of plant closures nationwide. China is driving the crisis by producing far more steel than the world needs and flooding the global market.

China’s massive steel overcapacity dominated the discussion at the recent G-20 summit, and member nations — including China — agreed to take part in a new global forum to study steel excess capacity. But the Senators write that is not enough:

“We must make enforcement efforts a significant part of our strategy. The antidumping and countervailing duty cases on steel products have helped to stem the flood of foreign steel imports. But the systemic problems remain a threat to our steel workers, and the trade cases will not resolve them.”

The Senators write that it would be appropriate for the Obama administration to consider bringing a trade case to the World Trade Organization (WTO) on the issue, and urge “a pause of other trade negotiations with China, such as the Bilateral Investment Treaty talks.”

“China has proven repeatedly that it acts according to its self-interests,” the Senators add. “Diplomatic pressure, even if made with our allies, has not been sufficient to change government subsidy policies, state-owned enterprise involvement in the market, and access to free capital that allows unprofitable steel companies to pump excess steel products into the market. Only if we incorporate strong enforcement measures into our strategy to reduce excess global capacity will U.S. steel companies and steelworkers get the relief they need.”

Trump Criticized on China Steel Purchases

In other steel news, Republican presidential candidate Donald Trump is under fire after Newsweek reported that he used China-made steel in at least two of his last three construction projects over U.S. companies located in key swing states like Pennsylvania, Ohio, Michigan and Wisconsin.  

“Plenty of blue-collar workers believe that, as president, Donald Trump would be ready to fight off U.S. trade adversaries and reinvigorate the country’s manufacturing industries through his commitment to the Rust Belt,” reporter Kurt Eichenwald writes. “What they likely don’t know is that Trump has been stiffing American steel workers on his own construction projects for years, choosing to deprive untold millions of dollars from four key electoral swing states and instead directing it to China.”

Democratic presidential candidate Hillary Clinton was quick to jump on the article during a speech in Ohio.

“Instead of buying his steel and aluminum from American plants here in Ohio and Pennsylvania, instead of supporting hard working families and American jobs, he once again stiffed us,” Clinton said. “He sent that money overseas… How can he make America great again when he won’t even buy American products?”

Sen. Bernie Sanders also weighed in, tweeting that “Mr. Trump has made millions in profits, while U.S. steelworkers in the Midwest are being thrown out on the street.”

Meanwhile, United Steelworkers President Leo Gerard told reporters on Tuesday that the union will investigate whether Trump’s organization circumvented U.S. trade laws by buying the China-made steel. The steel was purchased from a holding company in the British Virgin Islands, suggesting Trump might have dodged sanctions on the steel.

“Much of that steel would have been sanctioned,” Gerard said, adding that if the union can find evidence Trump committed a transgression it will consider moving forward with a trade case against him.