Steel Executives Focus on Trade and Jobs at Congressional Caucus

“As you have heard today, not since the late 1990s have we witnessed the torrent of steel imports. Total and finished steel products imported into our market by heavily subsidized, command-economies increased year-to-year between 22 to 90%. The last time we were at these levels, nearly half of American steel companies disappeared.

“Today, across the country, once again, mills are idled. Plants continue to be shut down. American workers are laid off.

“American steel companies are being irreparably harmed by illegal trade practices. “

Longhi reminded Congress that the injury standards for relief from unfairly traded imports “did not intend for companies or workers to suffer severe, persistent harm before they can seek relief.”

“While the statute allows for evaluation of relevant factors for the establishment of material injury,” said Longhi. “U.S. decision makers have focused too heavily on operating margins alone as a proxy for injury. There are clearly other indicators of injury, including suppressive effects on cash flow, production, net income, employment, R&D, and investment in new technologies and growth. All of these must be taken into account.”

The application of the correct injury standard is paramount, and the time to act is now,” said Longhi. “We have a rare window of opportunity to do what’s right for American manufacturers and our workers. This opportunity will not present itself again for at least another decade. If we do not seize it – if Congress yields its leadership to another branch of government to legislate by bureaucratic fiat – you will condemn American manufacturers to irrelevance – or worse.”

Nucor CEO John Ferriola told Congress that the ITC and Department of Commerce have been too soft on foreign countries and companies that disregard the rules of international trade.

“Blatant foreign government support of their steel industries has resulted in a glut of global steel production,” said Ferriola. “A brazen disregard for international trade rules has led to the dumping of steel products in our market. As a result, one in three tons of steel sold in the U.S. today is produced abroad by less efficient, less safe, and less environmentally friendly countries. Our government must take a much tougher line with countries that break the law.”

“We need real solutions that will provide effective relief and change market-distorting behavior,” said Ferriola. “As Congress prepares to debate TPA – the Trade Promotion Authority legislation – we urge you to use the debate as an opportunity to strengthen trade laws. New trade authorization should include strong trade enforcement provisions and enforceable rules against currency manipulation, such as those included in Chairman Murphy’s bill HR 820 – The Currency Reform for Fair Trade Act.

“There are a couple of things Congress can do to create more effective trade enforcement mechanisms. First, Congress needs to pass the ENFORCE Act, which would strengthen Customs and Border Protection’s ability to hold other countries accountable for getting around trade duties. Nucor also supports legislation to address decisions by the World Trade Organization and the courts that have weakened the effectiveness of our anti-dumping and countervailing duty laws like Senator Brown’s bill – The Leveling the Playing Field Act. These measures are a start, but we are going to have to think outside the box to end this rampant trade cheating.”

Mike Rippey, chairman of the Board of Directors of AISI and chairman of ArcelorMittal USA, discussed the need to prepare the next generation of steel workers through educational programs like STEM (Science, Technology, Engineering, Math) and promoting opportunities in manufacturing.

“The average age of our workforce is 50,” said Rippey. “Over the next five years, we expect 500 retirements per year. Who will replace them? How do we get young people to think about manufacturing as a viable career? And how do we make sure they have the skills that 21st century steel jobs require?

“We need your help in producing a workforce with the knowledge and skills to adapt to 21st century technologies “And, now more than ever, we need strong trade laws that prevent the U.S. market from becoming the dumping ground for the world’s excess steel.”

Commenting on issues brought up by the Steel Caucus, AK Steel affirmed that unfairly traded imports were negatively affecting the industry. In a statement to SMU, AK Steel said:

“AK Steel said that the company’s results of operations for the first quarter of 2015 have been significantly and negatively impacted by lower than expected carbon steel spot market shipments and prices due to unexpectedly high levels of what AK Steel believes are unfairly traded imports….”

“Excess global steelmaking capacity and continued challenging global economic conditions have resulted in a substantial increase in the level of steel imports into the United States. More recently, the strengthening United States dollar also has contributed to an increase in steel imports. Imports of flat rolled carbon steel products increased by nearly 60% in 2014, and have averaged more than one million tons per month in January and February of 2015. These conditions have negatively affected the company’s shipments to the carbon spot market in the first quarter of 2015, as well as the selling price of the company’s steel to that market.”

Full testimony from all the presenters at the Congressional Steel Caucus may be accessed at the American Iron and Steel Institute (AISI) website here.