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Unscrupulous Foreign Competition Takes Another Bite Out of American Jobs

By    |   Thursday, 31 July 2014 08:21 AM

The United States has never backed away from foreign competition.

This was never truer than when it comes to steel production. During the 19th century, England, Austria and Germany dominated the global steel industry. But by 1900, the United States was the world's largest producer. Steel and America became synonymous.

In 1901, U.S. Steel accounted for 66 percent of America's steel output and almost 30 percent of the world's output. During World War I, its annual production exceeded the combined output of all German and Austrian firms. American steel was on a roll.

But the good times ended as foreign imports of steel flooded the U.S. market. Countries like China, India and Korea, facing an oversupply of production, dumped steel into the United States at low prices made possible by subsidies from their respective governments. With union-mandated wages and unbalanced tariffs, it has become nearly impossible for U.S. steel companies to compete in the global market.

To get an appreciation for how far we have fallen, on July 2, 2014, U.S. Steel was removed from the S&P 500 index and placed in the S&P MidCap 400 Index due to its declining market capitalization.

What a sad state of affairs. Andrew Carnegie must be rolling in his grave.

The latest figures indicate that U.S. steel imports increased from 28.5 million net tons in 2011 to 32.0 million net tons in 2013, an increase of 12.3 percent. Imports have increased not only in absolute terms, but also relative to domestic production and consumption. The result is that the U.S. steel industry is falling further and further behind as it seeks to emerge from its current market doldrums.

The biggest culprit is China, which in April exported its highest steel levels since May of 2008.

Korea is close behind, having shipped $818 million in steel pipes and tubes in 2013. Ironically, this steel is being used for domestic oil exploration. So as we try to reduce our imports of oil through new drilling, we are increasing our imports of the material we need to accomplish this.

We should be rooting for the U.S. steel industry to succeed, because if it does, it signals the return of a core piece of America's global leadership. To fail, would have enormous consequences.

According to the Economic Policy Institute (EPI), since the beginning of 2012, "an estimated 4,184 steel workers in eight states have been certified for Trade Adjustment Assistance because imports or shifts in production contributed to their job loss. More layoffs have been announced in recent months. Nearly 1,000 steel jobs have been lost due to surging imports in the first three months of 2014."

The EPI also estimates that U.S. steel production supported 583,600 jobs in 2012, including 123,400 direct jobs in steel production. Of the jobs supported, 255,500 (43.8 percent) were in manufacturing (including direct jobs in the steel industry).

"These jobs are at risk if surging imports of unfairly traded steel are allowed to displace domestic steel production," the EPI concludes. "The top 10 states, ranked by total number of jobs at risk from displaced domestic steel production, are Texas (59,800 jobs supported), California (52,300 jobs), Pennsylvania (35,300 jobs), Ohio (33,900 jobs), Illinois (28,400 jobs), Indiana (26,000 jobs), New York (25,100 jobs), Florida (23,200 jobs), Michigan (20,100 jobs) and Wisconsin (15,700 jobs)."

The good news is that American steel companies are fighting back.

The EPI notes that U.S. steel producers filed 40 antidumping and countervailing duty petitions in 2013 and the first two months of 2014, covering nine products from 18 different countries. Determinations in these cases will be made later this year and in early 2015. More than 14,000 workers, producing the affected steel products in 92 locations across 29 states, depend on effective relief in these cases alone.

When an iconic American industry like steel is being pushed around by other countries, we can't sit back and let this happen. It's a disservice to every American.

This nation needs a trade policy with teeth, and one that starts to give American exporters and entrepreneurs the advantages enjoyed by other nations.

We need new leadership. We need a leader who will fight for the American worker and America's global trade policy. We need a leader with a steel backbone.

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The United States has never backed away from foreign competition. This was never truer than when it comes to steel production.
steel, trade, US, jobs
Thursday, 31 July 2014 08:21 AM
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