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In the depth of the recession, some foreign countries made a simple calculation. They’d subsidize their steel industries even though that violates international trade rules. It paid off by keeping their citizens employed, paid and fed.

These countries banked on dumping their excess steel in the United States. That has cost good, family-supporting American jobs. It has wounded the American steel industry. And it has emboldened foreign countries to continue eating America’s lunch by violating international trade laws.

Last week, Mario Longhi, President and Chief Executive Officer of U.S. Steel, and I asked Congress to enforce the law. We’re not seeking special deals or subsidies or handouts. We’re asking Congress to implement American and international trade laws to level the field of competition. If the same rules apply to everyone, U.S. industry can compete and win. And American workers can retain their jobs and afford their daily bread.

A simple story explains how this works. Just as the economic crisis hit, China began dumping Oil Country Tubular Goods, the pipes used in oil and gas exploration, into the American market. Dumping occurs when foreign manufacturers export products at prices lower than they charge in their home country or at prices below the cost of production.

American steel companies would quickly go bankrupt if they set prices below the cost of production. Many foreign manufacturers can get away with it because part of their production cost is offset by government subsidies. In 2011, half of the world’s 46 top steel companies were state-owned. They don’t live by the same rules American companies do.

Government subsidies are fine if all of the beneficiary company’s products are sold in their home market. But international trade rules prohibit sale of subsidized goods to other countries because their artificially low prices would distort the market and destroy companies that aren’t propped up by their governments.

To keep their citizens employed and sustain vital industries like steel, lots of countries ignore the rules. That’s what China was doing in 2008 with Oil Country Tubular Goods. A half dozen steel companies and my union, the United Steelworkers (USW), won a dumping case against them in 2009. Tariffs were placed on China’s Oil Country Tubular Goods to offset the value of the illegal subsidies. After that, Chinese shipments of the pipe to the United States virtually stopped.

When enforcement of the rules leveled the field of competition, American companies and American workers won.

This is an important story because it involves pipe essential to natural gas drilling. Americans are reveling in the possibility that hydraulic fracturing will make them energy independent. But there’s no point in achieving energy independence if failure to enforce trade laws condemns America to steel dependency.

Here’s what Longhi told the Senate Finance Committee last week: “It is not enough to open new markets for American goods and services; I submit to you that the greater economic and national security, and, indeed, moral imperative is to ensure that the rules governing trade in our own market are respected.”

In the past 18 months, American steel producers and the USW have issued demands for that respect 40 times, filing 40 antidumping and countervailing duty petitions. That’s the largest number of steel cases since 2001.

Among them is yet another Oil Country Tubular Goods case, this one against South Korea and eight other nations. In February, the International Trade Administration announced preliminary duties against the eight: India, Philippines, Saudi Arabia, Taiwan, Thailand, Turkey, Ukraine and Vietnam. But it exempted South Korea.

The International Trade Administration’s final determination is expected in July. It should include South Korea, which exports 98 percent of the pipe it produces to the United States. Fearing the effect of sanctions, South Korea has stepped up exports. Last year, it shipped to the United States an average of 27,000 tons a month. In May, it sent eight times that amount -- 214,000 tons.

That subsidized steel takes bread off of American tables. Thousands of American steelworkers have been laid off. And untold additional Americans whose work depends on the steel industry have lost hours or jobs.

The cost is wide ranging. As steel production declines, so does coal, limestone and iron ore mining. Coke and iron ore pelletizing plant operations suffer. Truckers, railroad workers and barge hands who deliver supplies to mills all lose work. Scrap dealers who provide steel for recycling, as well as pump, industrial fan and valve manufacturers who supply mill replacement parts lose business. Profits shrink at restaurants, grocery stores and shops near mills. School districts, municipalities and states all lose tax revenue.

Considering all of that, it’s easy to understand why foreign countries would try to keep their steel furnaces operating, even if that meant violating international rules.

With all those mills running, there’s too much steel available. The global excess steel capacity now is more than twice what it was a decade ago. The European and U.S. steel industries responded to the excess by reducing production over the past 30 years. But Asian countries, including India and South Korea, ramped up. China, for example, forged 20 times more steel last year than it did in 1980.

When that steel is dumped on the American market, those foreign firms receive American dough in payment, further increasing the already dangerously high U.S. trade deficit. That’s another cost of the failure to enforce trade laws. It means trade law violators are taking bread out of the mouths of Americans twice. 

Poll

I don't want international trade laws enforced because I want to get my steel as cheap as possible, and I don't care who suffers in the process.

10%22 votes
89%194 votes

| 216 votes | Vote | Results

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Comment Preferences

  •  Our national policy should support OUR industries (6+ / 0-)

    1) Replacing the Bay Bridge

    We bought shit Chinese steel. Now, it's rusting, it appears to not be up to specs, chinese labor is erecting it, it's a fucking disaster.

    We should have subsidized US steel companies, for OUR OWN INFRASTRUCTURE. This kind of stupidity is amazing.

    2) Obama's solar initiative

    We bought a system from the Spanish. We have a huge solar industry, and it should be bigger. The government should be putting more money into our own solar. Solyndra should have been followed by BIGGER solar investments. Look at Germany - they are 100% solar in some states.

    •  And for an article yesterday on this very topic (0+ / 0-)

      http://www.chicagolandconstruction.com/...

      The entire process was corrupt from start to finish. We need laws REQUIRING US sourcing.

      A similar situation - a number of US states run the state government IT with Indian scab firms like Tata. These firms, filled with incompetents, run the unemployment systems. First they put IT / STEM workers on unemployment. Then they hire scab Indian scum to run the systems. That too should be illegal.

  •  Dems support "free trade" as seen by Pew (2+ / 0-)
    Recommended by:
    6412093, Santa Susanna Kid

    http://www.people-press.org/...
    DK is mostly a liberal web site, liberals support free trade two to one. Young Next Gens more than 3/1

    The only group to come close is Hard Pressed Skeptics (that's me)

    My take is we shouldn't import steel, it's too important, and there should be high tariffs on things made of steel.

    A couple things going on here. I think a fair portions of Dems don't like the kinds of people steelworkers are and they want cheap stuff.

    “Conservation… is a positive exercise of skill and insight, not merely a negative exercise of abstinence and caution…” Aldo Leopold

    by ban nock on Tue Jul 01, 2014 at 08:11:06 AM PDT

    •  I should add, the one group that doesn't support (1+ / 0-)
      Recommended by:
      Santa Susanna Kid

      free trade by a wide margin are doctrinaire conservatives, Tea Partiers not banksters. It's a sad day when they support protecting American workers from imported products, but my own party doesn't.

      America exports wheat, pork, Hollywood films, crushed cars, and jobs.

      “Conservation… is a positive exercise of skill and insight, not merely a negative exercise of abstinence and caution…” Aldo Leopold

      by ban nock on Tue Jul 01, 2014 at 08:34:39 AM PDT

      [ Parent ]

    •  Sorry but I don't believe those poll results (1+ / 0-)
      Recommended by:
      tardis10

      Most Americans are well aware of the negative impact outsourcing and offshoring have had on our chronically high unemployment rate. It would be nice to see some more data.

      Money is property, not speech. Overturn Citizens United.

      by Betty Pinson on Tue Jul 01, 2014 at 08:39:11 AM PDT

      [ Parent ]

      •  How do you ask the question? (1+ / 0-)
        Recommended by:
        Betty Pinson

        "Do you like spending less money to buy things"

        "Do you like your tax money going to corporate executives who pay for congressmen to go on 6 week long fact finding trips to Tahiti to study Bora Bora's steel industry?"

        "states like VT and ID are not 'real america'" -icemilkcoffee

        by Utahrd on Tue Jul 01, 2014 at 09:33:21 AM PDT

        [ Parent ]

        •  It may not be the question (1+ / 0-)
          Recommended by:
          ban nock

          but sample size, etc.  I notice the survey doesn't show margin of error, particularly important in subset analysis.

          But, yeah, you would need to ask USians if they favor free trade agreements if it means USians lose good paying jobs.

          Money is property, not speech. Overturn Citizens United.

          by Betty Pinson on Tue Jul 01, 2014 at 12:19:04 PM PDT

          [ Parent ]

    •  Telling us how liberals think? (2+ / 0-)
      Recommended by:
      TKO333, i saw an old tree today

      Excuse me, but from your comment, I take it you are a self-identified conservative? And like all conservatives, you purport to know how liberals think and act. For your information, democrats like Steelworkers just fine. Politicians like us too, until they get elected and get on the wall street payroll. As for the cheap stuff, lots of people like cheap stuff, but they usually have buyers remorse when it breaks.

      •  as I said in my comment I test out as a Hard (0+ / 0-)

        Pressed Skeptic. Follow the link.

        “Conservation… is a positive exercise of skill and insight, not merely a negative exercise of abstinence and caution…” Aldo Leopold

        by ban nock on Wed Jul 02, 2014 at 05:26:22 AM PDT

        [ Parent ]

    •  Hey, wait (3+ / 0-)

      What kind of people are steelworkers?
      Middle class, hard working, family-supporting Americans (and Canadians)?

      •  it would be nice (0+ / 0-)

        if this friend of yours, the US Steel CEO, would come up with less ideological nonsense and be a bit truthful instead.

        As the CEO, I spend a great deal of my time working to provide good paying, middle - class jobs
        in America.
        I hope he spends his time rather trying to manage the company. It, and not he, is who´s providing jobs. It also would be nice if they gave a few jobs to underclass people so that they get a chance at a decent life too.

        this piece (by Longhi) was the biggest load of disinformative bullshit that I have read in a long time.

        We are not looking for a hand out.
        No, we only want you to write laws that favor us over our competitors.

        And then he complains that foreigners dare to export steel to the US even after US officials looked for and did not find evidence for dumping. So he demands that US official slap a preemptive punitive tarriff on Hyundai because obviously they must be lying. He knows that of course?

        this is just a bad joke.

        •  Exactly, marsanges (0+ / 0-)
          I hope he spends his time rather trying to manage the company. It, and not he, is who´s providing jobs. It also would be nice if they gave a few jobs to underclass people so that they get a chance at a decent life too.
          The corporate "person" is an amazing, slippery beast. Let's agree that the one-percenter CEO is most focused on his mansions, kids' college, exotic vacations, philanthropy on his own terms, et cetera; and it's up to his corporation to create jobs.

          Mr. CEO stands on the podium and talks about how his corporation creates jobs. Show me one corporation that, in its bylaws, states that it exists in large measure to create strong communities with good middle-class jobs. If one exists, show me one investor who will run to that corporation over another that's all about shaving costs (and jobs) while maximizing profits.

          Neither the CEO nor the corporate "person" are the slightest bit interested in creating jobs as a prime directive, so it's time to stop kidding ourselves. There are people within the current capitalist system who would like this to change. Hence the B-Corporation movement , and strong statements by leaders like Nick Hanauer that healthy markets create jobs, not CEOs. Capitalism can work, but not without sensible regulation and at this point, not without some serious redefinition of corporate values.

  •  There's an antagonistic dynamic in play (1+ / 0-)
    Recommended by:
    6412093

    between producers of steel and users of steel.

    Since the "users" support more jobs, chances are that it is politically expedient to continue to allow or maybe even encourage the import of cheaper foreign steel

    •  Users can handle fair prices (3+ / 0-)
      Recommended by:
      tardis10, jmonch, happymisanthropy

      It seems a better solution would be spending more money on infrastructure repair.

      Unfair pricing only goes towards bigger profits, which are simply recycled into bigger bonuses for top executives and big investors. That money doesn't trickle down to the working class. It also leads to more layoffs, government spending for unemployment and less consumer spending to stimulate the economy.

      OTOH, fair pricing means jobs and economic stimulus.

      At the most basic level, this is just another attempt to destry labor unions.

      Money is property, not speech. Overturn Citizens United.

      by Betty Pinson on Tue Jul 01, 2014 at 08:46:43 AM PDT

      [ Parent ]

      •  Please read the blog (2+ / 0-)
        Recommended by:
        TKO333, Glen The Plumber

        The American companies are not involved in unfair pricing.

        The foreign firms that get government subsidies violate international trade regulations and because their prices are subsidized -- those prices are unfair.

        Unfair prices may give bigger profits to the frackers and other end users of steel, but they kill American steel companies.

        •  I didn't say they were (1+ / 0-)
          Recommended by:
          Glen The Plumber

          The South Korean and other Asian nations are involved in unfair pricing.  I've been watching the series Ed Schultz has been doing on this problem.  He's covered it very well.

          The greedy companies that buy steel and pressure Congress and the WH to continue to allow Asian producers to dump steel into the markets, driving US steel producers out of business can survive just fine paying US prices for US produced steel.

          We need jobs here in the US, we can't afford to keep losing these.

          Money is property, not speech. Overturn Citizens United.

          by Betty Pinson on Tue Jul 01, 2014 at 12:16:15 PM PDT

          [ Parent ]

  •  Thank you (6+ / 0-)

    My husband is a steelworker in MI so this is personal for me. I must, though, take exception to this point:

    This is an important story because it involves pipe essential to natural gas drilling. Americans are reveling in the possibility that hydraulic fracturing will make them energy independent.
    Yes this is an important story, but not because people are reveling in fracking. Quite the opposite, in fact. The workers, steel and otherwise, that I know are strongly opposed. Please note that we are a strong, active union family from your own union, and we are committed to the fight against fracking.

    That said, I truly appreciate your efforts on enforcing fair trade laws.

    "The answer to violence is even more democracy. Even more humanity." Norwegian Prime Minister Jens Stoltenberg

    by poe on Tue Jul 01, 2014 at 08:52:01 AM PDT

  •  dumping v. free trade (4+ / 0-)

    The products in question were dumped, meaning they were sold in an export market at below home market price.  This isn't so-called free trade; this an anticompetitive practice acknowledged as such by domestic law and all WTO members.

    For trade to be free, it must be fair.  Dumping (as well as the use of illegal subsidies) is the enemy of free competition.  As Mr. Gerard notes, the EPI study cites 40 A/D and CVD (subsidy related) cases on steel products filed in the last 18 months alone.  Dumping of steel has been a major issue for decades.

    We can compete with anyone but everyone needs to play by the rules.

    (full disclosure: I work in an administrative capacity for the firm that was the primary author of the EPI report).

  •  I support trade policies (1+ / 0-)
    Recommended by:
    Santa Susanna Kid

    that protect our basic industries.

    We are in nearing a situation where we cannot defend ourselves if our imports are interrupted.

    We couldn't even put an army in the field if China refused to make the uniforms.

    “The answer must be, I think, that beauty and grace are performed whether or not we will or sense them. The least we can do is try to be there.” ― Annie Dillard, Pilgrim at Tinker Creek

    by 6412093 on Tue Jul 01, 2014 at 11:00:55 AM PDT

  •  Some days... (0+ / 0-)

    it's just not worth chewing through the restraints.

    This is a perfect illustration of what happens when one starts with a bad idea and then insists on piling on more and ever more bad ideas on top of the original, in order to "fix" the problem.

    "Those who can make you believe absurdities can make you commit atrocities." - Voltaire

    by Greyhound on Tue Jul 01, 2014 at 12:50:36 PM PDT

  •  A view on related issues. (0+ / 0-)

    An interesting related NY Times article.

  •  Lie down with dogs, get up with fleas (0+ / 0-)

    Mario Longhi supports the Republican Party, which favors people who are richer than him, ties up or blocks legislation that would help workers, generally blocks action to get the country back on our feet, and demonizes their opposition.  He's contributed to the problem and now he's surprised the minions of the corporate weasels don't care about American companies or workers?  This is a tiny example of how they just don't care.  From the 1940's to the 1970's, we had strong unions, progressive policies, more equality, and strong growth. Since Reagan, that's all been reversed, and Reagan got elected with the support of...members of blue collar unions like the steel workers. Yes, the union leadership still leans to the Democrats, but the rank and file has been more divided.  The major electoral victory the Republicans can claim over the last 40 years is the seduction and destruction of unions.  Union members now vote more like individuals than union members.  http://fivethirtyeight.blogs.nytimes.com/...

     Mr Longhi, you're part of the problem.  Mr. Gerard, you're complaining about policies that are a symptom of the larger political atmosphere.

    Sow the wind, reap the whirlwind.

    If not us, who? If not now, when?

    by FamilyDocForDean on Thu Jul 10, 2014 at 10:55:24 AM PDT

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