Manufacturers and Steelworkers Defend Import Tariffs

Chinese steel is creating a destructive ripple effect on American companies and workers, say tariff advocates
March 6, 2018 Updated: March 10, 2018    

American metal manufacturers and labor unions have applauded President Donald Trump’s proposal of tariffs on steel and aluminum imports. Despite rising domestic and international criticism, companies, workers, and lawmakers are pushing Trump to follow through on his commitment to defend American steel and aluminum.

“The steel and aluminum sectors have been under attack by predatory trade practices,” Leo W. Gerard, president of the United Steelworkers union said in a statement.

“For too long, our political leaders have talked about the problem, but have largely left enforcement of our trade laws up to the private sector. This is not what hard-working Americans want from their government,” he stated.

Trump announced tariffs of 25 percent on steel imports and 10 percent on aluminum imports on March 1. The process began in April last year when Trump ordered an investigation into whether imports posed a threat to national security.

This welcome action is long overdue for shuttered steel plants across Ohio and steelworkers who live in fear that their jobs will be the next victims of Chinese cheating.
— Sherrod Brown, U.S. senator

In February, the U.S. Department of Commerce concluded that steel and aluminum imports “threaten to impair the national security” and recommended immediate action.

Tens of thousands of American workers have faced layoffs and dozens of factories have been shut down since 2000 because of imports, which are heavily subsidized by foreign governments, according to the Alliance for American Manufacturing (AAM), a nonprofit organization formed by manufacturers and the United Steelworkers.

“We are confident a robust steel trade action is good for our economy,” Scott Paul, president of AAM stated in a press release.

“We urge the president to stand by our nation’s steel communities.”

According to AAM, steel dumping is a real problem. China subsidizes its manufacturers and lets them produce far more steel than the global demand. And much of the excess steel ends up in the United States, where it is sold at rock-bottom prices. Hence, excess steel creates a destructive ripple effect on domestic producers and workers.

AAM supporters have sent nearly 140,000 messages to the White House since the investigation started last year urging the president to defend American steel and aluminum.

“There is now just one American steelmaker capable of producing the steel needed for the electrical grid and only one steel company that can equip the military with the type of steel it needs to make Virginia-class submarines,” stated an AAM report. “Meanwhile, there’s just one smelter that can make the high purity aluminum needed to build fighter jets like the F-35.”

The problem has been ongoing for decades due to wrong policies, said Trump and called it “disgraceful.”

The steel and aluminum manufacturers have been “very unfairly treated by bad policy, by bad trade deals, by other countries,” he said at a meeting with representatives from the steel and aluminum industry at the White House on March 1.

“We thank the president for meeting with our industry, and following through on his commitment to addressing the steel crisis,” Thomas Gibson, president and CEO of the American Iron and Steel Institute, said in a statement.

The United States Steel Corp. plant in the town of Clairton, Penn., on March 2. (SPENCER PLATT/GETTY IMAGES)

Steel imports soared 15 percent in 2017, accounting for 27 percent of the U.S. market, according to Gibson.

About a quarter of domestic steel capacity today is not being utilized because of massive excess steel capacity in the world, Gibson wrote.

Some lawmakers from both sides of the aisle also praised Trump for following through on his commitment to address the issue.

“This welcome action is long overdue for shuttered steel plants across Ohio and steelworkers who live in fear that their jobs will be the next victims of Chinese cheating,” Sen. Sherrod Brown (D-Ohio) said in a statement.

“If we fail to stand up for steel jobs today, China will come after other jobs up and down the supply chain tomorrow,” he warned.

Key Findings of Investigation

The Commerce Department carried out an investigation under Section 232 of the Trade Expansion Act of 1962. Secretary Wilbur Ross released his report in February. According to its key findings, the United States is the largest importer of steel in the world and U.S. imports are nearly four times its exports.

China is by far the largest steel producer and exporter, and it is the largest provider of excess steel capacity in the world, stated the report. China’s excess capacity alone exceeds the total U.S. steel-making capacity.

Aluminum industry employment fell by 58 percent, and six smelters were closed between 2013 and 2016, according to the same report.

Michigan steelworkers rally to urge President George W. Bush to defend manufacturing jobs by keeping steel tariffs in place in River Rouge, Mich., on Sept. 20, 2003. (BILL PUGLIANO/GETTY IMAGES)

In order to support domestic steel and aluminum production and to address the import problems, Ross listed his recommendations to the president.

Ross suggested a global tariff on all steel imports from all countries. He also recommended imposing higher tariffs on steel imports from 12 countries including Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey, and Vietnam.

Ross also recommended higher tariffs on aluminum imports from China, Hong Kong, Russia, Venezuela, and Vietnam.

 

Recommended video:

WATCH: Death by China – How America Lost its Manufacturing Base

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