Steel Products Prices North America

Trade Attorney Advises Manufacturing Companies to Beware

April 30, 2015

There are always two sides to any story. The domestic steel mill view is the influx of foreign steel is due to illegal dumping by the companies or countries exporting steel to the United States. The manufacturing companies who are benefiting from the lower priced imports (and their impact on domestic steel prices) have a much different frame of reference.

Steel Market Update has been discussing the TPA free trade legislation that is in the process of working its way through the U.S. Congress. The TPA legislation itself does not have any specific language dealing with dumping or remedies for the domestic steel industry. However, the steel industry and their lobbying groups have been successful in getting members of Congress to attach various amendments to the TPA legislation which would make the filing of dumping suits or, proving injury easier for the domestic steel mills.

Trade attorney Lewis Leibowitz, in a note to SMU this morning, advises end users/manufacturing companies to be actively involved in the political process:

First, steel producers have not filed [trade] cases, because they claim their chances of “winning” are not great enough. Mr. Longhi (no doubt advised by his lawyers) claims that the current law does not find injury if a company was profitable—they have to lose money to win. That is simply not true. Their motivation for this is probably to see if they can push through some amendments to AD/CVD that will help them stop or slow steel trade.

I have spent the last 30 years arguing (sometimes successfully) that the antidumping and countervailing duty remedies (tariffs) increase costs for companies that buy steel. That hurts many more businesses and workers than are employed in steelmaking. Manufacturing employment in the US therefore would gain from more imports, which would make US steel users more competitive globally. The message has been received by a few members of Congress, but most are listening to the AISI, which is trying to turn trade remedies into a morality play. They claim buying dumped or subsidize steel is like stealing. Again, not true—there is nothing illegal about buying OR selling products subject to AD/CVD.

The current legislation in Congress does not have anything in it that would address Mr. Longhi’s concerns. But Senators and Representatives are preparing amendments for the relevant Committees and on the floor. The risk that these amendments will pass is significant, especially in the Senate. If consumers of imported products are not active, these amendments could pass and they would mean many more AD/CVD orders making importing harder and US manufacturers less competitive in global markets. More people would suffer than would benefit from this development.