Brown Testifies Before International Trade Commission on Behalf of Ohio Workers

Senator Presses for Relief for Workers in Lorain, Youngstown, and Warren Affected by Chinese Steel Tube Imports

WASHINGTON, D.C. – U.S. Sen. Sherrod Brown (D-OH) testified today before the International Trade Commission (ITC) on behalf of Ohio workers affected by oil tubular imports from China. Brown petitioned the ITC for relief from excessive imports of oil tubular goods from China that have had an adverse impact on Ohio companies and workers at U.S. Steel in Lorain, V & M STAR in Youngstown, and Wheatland Tube Co. in Warren.

I appear before you today in support of the workers in my state and around the country whose jobs have been lost or are on the line due to subsidized oil country tubular goods from China.

I hope someday I will come before this Commission under better circumstances. But over the past two years, I have come before you with a similar message in trade cases as varied as thermal paper, tires, and hot rolled steel.

The message is that American manufacturers are suffering a double blow from the economic recession and from unfair trade practices in China. American workers can compete with China when our trade laws are properly enforced. But when these laws are not enforced, we lose jobs, wealth, and our economic strength.

If not for our antidumping and countervailing duty laws, we would be seeing Depression-like situations in communities throughout Ohio. I think fellow Congressional witnesses will agree: rigorous enforcement of U.S. trade laws is critical to the viability of domestic manufacturing and the economic security of American workers.

Ohio is home to U.S. Steel in Lorain, V&M Star in Youngstown, and Wheatland Tube in Warren. All of these companies manufacture oil country tubular goods. These tubular products are essential to equip our energy market.

The steel pipe workers of my state have quite simply had the rug pulled out from under them due to one of the most inexcusable floods of dumped and subsidized products in history. The Commerce Department issued a determination last week that the Chinese have subsidized imports at levels ranging from 10 to 15 percent of product cost.

The workers and their families affected by this anticompetitive behavior are going into this holiday season fearful and apprehensive. They face an economy with a scarcity of jobs, and an OCTG industry – the industry that has provided their livelihoods – with a target on its back.

As you know, 2008 was a good year for oil and gas, and for the OCTG industry. Chinese mills responded by shipping 2.2 million tons of dumped and subsidized products into this market. This equated to 32.7 percent of the U.S. market.

In the fourth quarter of 2008 alone, the Chinese shipped more than 960,000 tons of OCTG to the United States. To give you an order of magnitude, that level of shipments represented more than 70 percent of end-use consumption in one of the dynamic markets in history. Annualized, it would account for virtually all of the OCTG needed in our country. While I’m sure you hear the word “flood” quite often, this was more than a flood – it was a tidal wave.

Yet with OCTG inventories at near record levels during one of the most severe economic downturns in memory, Chinese producers sent more than 700,000 additional tons of OCTG to this market in the first 5 months of 2009. This was at a time, mind you, when the domestic industry had largely shut down or was operating at skeleton rates.

In 2009, Chinese producers took an even larger share of the market, accounting for 37 percent of the U.S. OCTG market during the first three quarters.

The effects on our industry have been horrendous. One of the two mills in Lorain was shut down in March. V&M had the first layoffs in its history at its Youngstown plant. By the end of the first quarter of this year, all mills across the country were either closed or operating at less than 30 percent of their capacity. More than 2,000 jobs were lost in this industry, and that does not include the numerous jobs lost among suppliers and ripple effects in communities. With inventories still at astronomical levels, the situation has barely improved at all through the year.

Make no mistake: it did not have to be this way. Some of the largest OCTG distributors in the country have made clear they would have still been buying significant volumes of domestic pipe if it had not been for the vast inventories of Chinese product on the ground.

If we cannot deal effectively with this type of predatory market behavior, then we have no chance to reestablish the health of manufacturing in this country.

Madame Chairman, I have been chairing hearings in the Economic Policy Subcommittee on the major opportunities and challenges facing American manufacturing. From these hearings, it is clear to me that fair trade policies -- trade policies that demand and enforce a level playing field and that preserve the economic, social, and environmental progress our nation has made - must be part of our national manufacturing strategy.

Strong trade enforcement is the force that turns fair trade rules into fair trade fact. It is vital to our nation’s global competitiveness. I urge you to render an affirmative decision and prevent further unfair trade from harming our workers and industry.”

In addition to Brown, testimony was given by U.S. Sen. Arlen Specter (D-PA) and Ohio Governor Ted Strickland.

Earlier this year, Brown petitioned the ITC on behalf of Ohio workers. In Sep., following a June ruling by the ITC on behalf of tire workers, Pres. Obama announced that he would enforce "Section 421" trade safeguards that protect American manufacturers from excessive imports. Last week, Cooper Tire & Rubber Company announced plans to add capacity to its Findlay, Ohio tire plant and hire up to 100 workers.

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