Manufacture This

The blog of the Alliance for American Manufacturing

America’s national defense and economic future are at risk due to unfair trade.

Steel company executives and United Steelworkers (USW) President Leo Gerard told the Congressional Steel Caucus on Thursday that America’s steel industry is in crisis because of foreign imports — and they emphasized that losing our domestic steel capabilities would be devastating to America’s economy and national security.

More than 13,500 Americans have received layoff notices and plants across the country have been shut down because of a surge in steel imports from countries like China, which heavily subsidizes its industry and doesn’t abide by labor and environmental rules.

Despite repeated promises that it will reduce capacity, China continues to produce way too much steel. China needs to do something with all that extra steel — it has 425 million tons of excess capacity — so it dumps it into the U.S. market at rock-bottom prices.

That’s unfair to American companies and workers, who compete in an open market and abide by the rules.

“Over the long term, this situation is not sustainable for U.S. producers who operate without the kind of government support provided to the Chinese steel industry,” said James Baske, CEO of ArcelorMittal North America. “We need the U.S. government to vigorously enforce U.S. trade remedy laws. And we need the international community to come together to make clear to China that they need to reduce their excess capacity in steel making — the way a market-based economy would — rather than exporting it.”

Witnesses testified that American steel companies have made significant investments over the past several years to stay competitive. For example, Nucor Corporation has invested more than $6 billion in capital projects and acquisitions since 2009, executive vice president Chad Utermark told Members.  

But China “is a company disguised as a country engaged in economic warfare.”

“We have reached a critical moment, for the steel industry and for the integrity of rules-based global trade,” he added. “When the rules are flaunted without meaningful consequences, faith in the system is eroded. Companies, communities and workers are harmed.”

And if the steel imports crisis isn’t effectively dealt with soon, the future of the entire steel industry is at risk, witnesses agreed. That’s not just bad for steel companies and workers, they noted — steel is vital to America’s national security.

“We can never fall into a position of relying on foreign government-owned enterprises to meet American steel needs.” Rep. Tim Murphy, chairman of the Congressional Steel Caucus

Steel is used to make ships, tanks and armaments for the military. It’s also vital to infrastructure, including in the energy sector. It would be a grave mistake to depend on imported steel from potentially hostile nations like China and Russia.

Americans agree. Recent polling has found 86 percent of voters "very strongly believe" the American steel industry is "critical to America's national security."

“The American people — and this caucus — have declared that we must not rely on competitors or adversaries for vital elements of our national security,” said Mario Longhi, president and CEO of United States Steel Corporation. “I contend that no element is more vital and fundamental than steel.”

USW’s Gerard told the caucus that it is not enough to count on promises from China to address the imports crisis. Time and time again, Chinese officials have pledged to reduce capacity.

Yet time and time again, China has instead upped its steel production. It’s become clear that the only way China will actually reduce its production is if there are meaningful consequences, Gerard said.

“There’s a reason the public is so angry. They see what’s happening to their factories, their communities, their friends and their own jobs,” Gerard testified. “This isn’t a new problem but it’s reached crisis proportions and, in my view, the time for talk is over. The time to act is now.”

Members of Congress from both sides of the aisle appeared to agree that more action is necessary to address unfair trade and level the playing field for American steel, and several pledged to continue to work to ensure action is taken.

“The steel crisis is not only hurting our economy and upending the job market, it is a direct hit to our national security,” said Rep. Tim Murphy (R-Pa.), chairman of the caucus. “We can never fall into a position of relying on foreign government-owned enterprises to meet American steel needs.”

Vice Chairman Peter Visclosky (D-Ind.) agreed, noting that “steel has an inherent role in keeping Americans safe.”

“It is imperative that we ensure that American steel companies and steelworkers are able to succeed in our global economy so that they can continue to meet the needs of our military,” he said.

Save Our Steel Jobs — Before It's Too Late

Roughly 13,500 Americans have been laid-off and major steel mills across the country have closed because of an unprecedented surge in subsidized steel imports from countries like China.

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