Foreign Testimony at Section 232 Hearing

Yu noted that the largest share of steel imports to the U.S. comes from Canada and 70 percent of the rest are from “close U.S. allies.” He cited the failed 2001 Section 232 investigation on finished steel and the fact that only 3 percent of total domestic U.S. steel shipments are designated for defense and national security. The volume of imports from China has also declined significantly as a result of trade cases filed in the past several years.

During the hearings, China was cited frequently for its steel overcapacity and propensity to ship “unfairly traded” steel to other countries. In an article published by Chinese news Xinhau on Thursday, the ministry in a new report rejected U.S. claims that China is responsible for global steel overcapacity, calling the blame leveled against China “untenable.” China continues to assert that global overcapacity is due to shrinking demand following the global financial crisis.

“China’s steel industry is positioned to meet domestic demand, and the Chinese government does not encourage the export of iron and steel products, but has adopted a series of measures to control exports,” reported Xinhau.

Alexander Zhmykhov, Deputy Head of Economic Section, Trade Representation of the Russian Federation in the USA said a broad range of Russian steel products are currently subjected to substantial import limitations and further limitations by the U.S. government would be “unfair and redundant.”

Vitalii Tarasiuk, Minister-Counsellor of the Embassy of Ukraine pleaded with the panel to consider the good relations between the U.S. and Ukraine since its independence. Tarasiuk noted that the U.S. has assisted in the Ukraine’s defense and the country has provided its own troops to the U.S. for disputes in the Middle East. Seven percent of the Ukraine is no longer in control of the government and is the home to a large part of the Ukraine steel industry, he said. “Our industry is in a precarious position,” said Tarasiuk.

Tarasiuk, like the China representative, referred to the previous Section 232 case and said he was confident that the results will be the same in the current case. The U.S. is not a major market for Ukraine steel, said Tarasiuk and should not be subjected to import restrictions.

Karl Tachelet, Director of International Affairs, Eurofer, represented the European Union at the hearings. The EU has the same concerns as the U.S. regarding global steel capacity, excess steel production and unfair trading practices, said Tachelet, but is not considering the broad remedies that the U.S. administration is considering. Concrete action must be taken collectively by the U.S., EU and other governments to address unfair trade, he said.

Tachelet cautioned that any trade limitations should be “narrowed to direct threats” to defense. Tin products have nothing to do with national security, he said. “How real is the risk that the U.S. will not be able to produce enough rebar given how much scrap is available?” asked Tachelet.

Many things have no relation to national security and not all sources of steel are the same in respect to national security, said Tachelet. Any import adjustment should differentiate on threats from specified foreign steel suppliers, he added. Tachelet noted that the EU produces high quality steel and has invested in U.S. plants employing U.S. workers. He offered the assistance of the EU to contribute to ensure a focused analysis.

Don’t mess with Canada

Canada was not represented at the hearing but it had its own supporters who urged the panel not to place restrictions on our Northern neighbor.

United Steelworkers International president Leo Gerard said the USW is a bi-national union. Canada stands by the U.S. and our national security intelligence relationship with Canada is unique, he said. Gerard noted the uncontested border with Canada and its partnership in NORAD. “We respectfully ask you to consider Canada be excluded from this.” He added as an afterthought, “We actually have a trade surplus with Canada.”

John Adams, president of Guardian Six LLC, and a retired brigadier general, said, “The one supplier in whom I have complete confidence is Canada. Not only do we currently have a steel surplus with Canada, but we share a border and have a synergistic economic and national security interest. However, treating Canada as a unique partner under any Section 232 relief measures requires that Canada also align its trade enforcement efforts with ours.”