U.S. Steel Takes On State-backed Mills in China

By Matthew McMullan
Apr 26 2016 |
American workers at a rally for the domestic steel industry in 2014. They’re facing an even worse challenge in 2016.

Company files trade case to get illegally traded steel products blocked from American market.

Mario Longhi, the CEO of Pittsburgh-based United States Steel, was among the industry and labor leaders who visited Washington last week to raise the alarm about the dire circumstances facing the domestic steel industry. Massive overcapacity in the global steel sector is depressing prices, idling mills, and causing layoffs.

“The genesis of this crisis is not home grown, but its profound and crippling impact continues to be visited upon American workers and our communities every day,” he told a Congressional Steel Caucus hearing. “These persistent, illegal foreign practices impact this country’s ability to maintain critical national infrastructure and to preserve our national security.”

It’s no secret where this is coming from. The lion’s share of this overcapacity can be traced directly to China, whose largely state-funded mills continue to crank out steel, regardless of demand. No one wants it, and they're still making it. This flood of imports is a big reason 13,500 American steelworkers have lost their jobs in recent months.

Today, U.S. Steel is pushing the issue. The company has filed a complaint with the U.S. International Trade Commission (ITC) to begin an investigation under Section 337 of the Tariff Act of 1930, against the largest Chinese steelmakers and their distributors. U.S. Steel’s complaint alleges the accused have 1) conspired to fix prices, 2) stolen trade secrets, and 3) mislabeling products in order to skirt around U.S. trade duties.

Here’s what Longhi said in a press release:

We have said that we will use every tool available to fight for fair trade. With today’s filing, we continue the work we have pursued through countervailing and antidumping cases and pushing for increased enforcement of existing trade laws.

The ITC remedy, according to the U.S. Steel release, is the exclusion of all of those unfairly trade products from the American market.

The United Steelworkers union (USW) immediately offered its support.

“China has made clear that it wants to reap the benefits of trade without abiding by the rules it agreed to follow,” said USW President Leo Gerard. “Repeatedly China has broken the rules – often with no response. This effort is adding a new arrow in the quiver to attack their actions.”

Amen to that. By dumping all of that subsidized steel into the United States, China state-run economy is effectively exporting unemployment – and its mea culpa has been pretty lackluster, to say the least. The Alliance or American Manufacturing applauds this move, and hopes the ITC recommends the appropriate remedy.