Steel industry at a crossroads

By Thomas Gibson

Where would we be without steel?

Steel goes into bridges, highways, automobiles, appliances, national defense, clean water and safe food supplies, energy transmission and development, and the technologies that enable our nation to be the most innovative in the world.

Every job in the American steel industry supports nearly seven additional jobs in the U.S. economy; this means that the steel industry directly or indirectly supports more than 1 million jobs in the U.S., including more than 65,000 steel-supported jobs in Illinois.

But the American steel industry is under attack. We are under attack from a surge of unfairly traded imports across a wide range of products from a variety of countries, many of whom continue to disrupt world markets by subsidizing the production of steel products and dumping those steel products in the U.S. market. The threat is real. And the threat is accelerating. Finished steel imports increased by 36 percent in 2014 and captured 28 percent of the domestic steel market — an all-time record level of foreign market share penetration. And we are on pace to see a similar hit this year with finished import market share already at a 35 percent market share in 2015.

To help address this problem, Rep. Mike Bost, R-Ill., a dedicated and committed advocate for the steel industry, has introduced legislation, The American Trade Enforcement Effectiveness Act, to improve the effectiveness of our trade laws which provide for a remedy against dumped and subsidized imports. The tenacious congressman understands that the U.S. trade remedy laws are the only means by which domestic industry can mitigate the harm from these unfair imports, and help prevent more plants from being idled and more workers from losing their jobs.

Strong U.S. antidumping and countervailing duty laws provide critical discipline against such unfair trade. Bost’s legislation stands up for American workers whose jobs are put at risk by global competitors who skirt trade laws. His legislation parallels legislation that has passed the Senate by a strong bipartisan majority and is supported by the Administration and by nearly two dozen members of Congress that have signed on as cosponsors so far.

The U.S. economy has slowly improved since the recession, but we are not seeing the benefits in the steel industry. Trade distorting foreign government policies, including raw materials export restrictions, import barriers, investment restrictions, subsidies, and the market-distorting conduct of state-owned enterprises and state-supported enterprises put U.S. companies and their workers at a competitive disadvantage and can lead to surges of unfairly traded imports into the U.S. market. In steel, these import surges are also made possible by the massive global overcapacity in steel that is again the result of foreign government subsidies and other trade-distorting policies. In fact, the Organization for Economic Cooperation and Development and the World Steel Association estimate that there are 638 million net tons of steel overcapacity in the world.

Our government needs to realize that steel jobs are real jobs, and if the American steel industry is to regain its pre-recession strength, the government must not let trade cheaters off the hook. The improvements in our trade laws proposed by Bost would go a long way in promoting more fair competition for the U.S. steel industry and its workers.

Thomas J. Gibson is president and CEO of the American Iron and Steel Institute, a trade association comprised of 19 member companies representing the majority of steelmaking capacity in North America, and approximately 125 associate members who are suppliers to or customers of the steel industry.