Letter to the Editor: Response to David Phelps Article on Threatened Dumping Suits

Mr. Phelps demonstrates a profound misunderstanding of, or indifference to, the purpose and benefits of U.S. trade remedy laws, claiming that they are “protectionist,” that they are bad for U.S. consumers, and that they have been “manipulated by the domestic steel industry for decades.”  Nothing could be further from the truth.   As an initial matter, these trade remedy laws are not unique to the United States – they are the rules of the road for international trade.  These laws are in place for a reason – dumped and subsidized imports distort trade and injure American companies and their workers.  The trade remedy laws are designed to limit the harmful effects of unfair trade in our market and ensure a level playing field for U.S. industries.

Legitimate use of the trade laws does not constitute gaming the system, as Mr. Phelps implies.  It is exactly what Congress envisioned when it enacted these laws nearly 100 years ago.  Indeed, the use of our trade laws has saved thousands of U.S. jobs, both in industries affected by dumped and subsidized imports and in their upstream suppliers.  Moreover, consumers regularly support the use of the trade remedy laws because they need a guaranteed source of domestic supply.  In fact, studies indicate that, on balance, the application of trade remedies has a positive impact on the U.S. economy, by providing higher revenue for industries, greater employment, and enhanced tax revenue.

Mr. Phelps also demonstrates a decidedly one-sided and inaccurate view of the U.S. and global steel markets by suggesting that the U.S. industrial base somehow needs steel imports and that such imports are responding solely to market demand.  From 2010 to 2013, U.S. steel imports increased by 35 percent, and have continued to surge in 2014, at a time when the U.S. economy has been struggling to recover from the economic recession.  This import surge has not been driven by U.S. demand, as capacity utilization rates in the U.S. steel industry have been at historic lows.  Instead, the import surge is largely a result of massive global excess steel capacity, fueled by government subsidies, irrational capacity expansion, dumping, and other anti-competitive practices abroad. These imports are capturing U.S. market share and costing tens of thousands of U.S jobs, and are impeding the domestic industry’s full recovery from the recession.  Contrary to what Mr. Phelps would have your readers believe, the U.S. industry is not opposed to competition from fairly traded imports.  However, the industry is opposed to unfairly dumped and subsidized imports as well as imports that are not a result of market forces but rather a result of global structural imbalances and anti-competitive behavior by our trading partners.

The next time Mr. Phelps decides to caterwaul about the steel industry’s use of the trade remedy laws, perhaps he should first consider the plight of the thousands of U.S. workers who are negatively impacted by dumped and subsidized imports.”

Sincerely,

Alan H. Price
Partner, Wiley Rein LLP