WASHINGTON, DC Today, U.S. Sen. Sherrod Brown (D-OH) called on the Administration to do everything in its power to address the oversupply of steel in the international market. In recent years, this overcapacity has led to an influx of imports into the U.S. market, putting the American industry at a competitive disadvantage and threatening Ohio jobs. In advance of the Organisation for Economic Co-operation and Development (OECD) meeting this month, Brown urged the OECD Steel Committee to encourage countries to reduce their steel supply in order to balance the international market.

“The American steel industry is the most competitive in the world when given a fair and equal playing field,” Brown said. “But when countries like China unfairly subsidize their steel industries, an overcapacity of their products flood the U.S. market, threatening our jobs and ability to compete. The OECD has already recognized the significance of this issue and pledged to address it. With a meeting of the OECD Steel Committee fast approaching, it is time to take action.”

According to Ernst & Young’s Global Steel 2014 report, the international industry would need to remove 300 million tons of steelmaking capacity to again make it sustainable. But countries like China that subsidize their industries make these reductions extremely difficult to achieve. Brown urged the OECD to develop a strategy to alleviate this issue and encourage countries with significant state participation in the steel sector to make greater progress toward reducing their overcapacity.   

The OECD is an international forum in which governments work together on issues of economic, social, and environmental change and significance. Last year, the OECD recognized the steel sector’s overcapacity and resolved to address it. To protect itself from the oversupply of steel, the U.S. industry has submitted more than 40 antidumping (AD) and countervailing duty (CVD) cases to the Department of Commerce (DOC) since January 2013, the most filed in more than a decade.

Brown continues to fight for Ohio’s workers and its steel and manufacturing industries. Last month, Brown and U.S. Sen. Rob Portman (R-OH) led a group of 57 senators in calling on the Administration to protect American steel manufacturers and the jobs they support. Their efforts came in advance of a major trade case before DOC that involves Oil Country Tubular Goods (OCTG). OCTG are used for domestic oil and gas exploration—especially shale—and are produced by Ohio companies U. S. Steel in Lorain, Vallourec Star in Youngstown, Wheatland Tube in Warren, and TMK IPSCO in Brookfield. The senators urged DOC to closely consider the facts of the case and fully enforce our trade laws to ensure American businesses and workers are not harmed by these imports.

Also last month, Brown joined Northeast Ohio workers at a rally to call on the Obama Administration to protect Ohio steel manufacturers and the jobs they support. Outside of the U. S. Steel facility in Lorain, Brown and local steelworkers urged DOC to crack down on countries that unfairly dump their steel in the U.S. market, threatening American jobs and competitiveness.

Steel produced for the U.S. energy market, such as OCTG, accounts for approximately 10 percent of domestic steel production and nearly 8,000 American jobs across the country. U.S. producers, however, are increasingly losing sales to foreign competitors because imports of OCTG have doubled since 2008 and increased by 61 percent thus far in 2014 compared to 2013. By some accounts, OCTG imports represent 50 percent of the pipes used for gas and oil drilling in the United States.  

Described as “Congress’ leading proponent of American Manufacturing,” Brown is a member of the Senate Manufacturing Caucus, currently Vice-Chair of the Senate Auto Caucus, and was recently named incoming Chair of the Senate Steel Caucus. In April, bipartisan manufacturing jobs legislation introduced by Brown and U.S. Sen. Roy Blunt (R-MO) moved one step closer to becoming law. Brown-Blunt would establish a National Network of Manufacturing Innovation (NNMI) and create thousands of high-paying, high-tech manufacturing jobs while enhancing the United States’ role as the world’s leader in advanced manufacturing. 

Brown’s letter to the Assistant Secretary of the International Trade Administration (ITA), Paul Piquado, can be read in its entirety below:

June 3, 2014

 

The Honorable Paul Piquado

Assistant Secretary for Enforcement & Compliance

International Trade Administration

Department of Commerce

1401 Constitution Ave. NW

Washington, D.C. 20230

 

Dear Assistant Secretary Piquado:

I am writing you in advance of the Organisation of Economic Co-operation and Development (OECD) Steel Committee meeting this month to urge the Commerce Department delegation to make addressing global oversupply in the steel sector the top priority for the U.S. at the meeting.   Global oversupply is the single biggest challenge facing our domestic steel industry and threatens the thousands of American workers the sector employs. 

I also want to thank you for the work the U.S. delegation has already accomplished at the Steel Committee.   As you know, the Committee has recognized the steel sector’s overcapacity problem and in December 2013 committed to investigating the problem and identifying options to address it.  Committee Chairman Risaburo Nezu’s statement from the last meeting acknowledged that the industry’s financial outlook is “worse now than during the crisis of the late 1990s.”   Given this economic urgency, I strongly encourage the Committee to move quickly to develop and pursue solutions at the next meeting designed to bring balance back to the sector.

In particular, I urge the OECD to focus on encouraging countries with significant state participation in the steel sector to reduce overcapacity.  According to Ernst & Young’s Global Steel 2014 report, 300 million tonnes of steelmaking capacity must be removed for the industry to become sustainable.  Unfortunately, state involvement in China’s steel companies and the scale of inefficient steel-making capacity make reaching this target difficult.  I ask that the U.S. delegation work with the Committee to identify China’s specific policies that are contributing to the oversupply. 

In addition, I request that the Committee engage China and urge them to accelerate their capacity reduction goals.  China has committed in the past to reducing steel production levels but has failed to honor those commitments.  The U.S. delegation should emphasize the need for China to implement its planned capacity reductions without delay.   China’s steel industry will be more competitive if inefficient capacity and government ownership in the steel sector are eliminated, and the global industry will benefit when capacity and prices are market-determined.

The U.S. steel sector restructured to a sustainable model approximately a decade ago, but now it is threatened by a flood of foreign imports - many of them dumped into our market.  To stop these unfair imports, the industry has submitted more than 40 antidumping and countervailing duty cases to the Department of Commerce since January 2013, the most filed since the early 2000s.  These trade petitions are critical to the future of American steel companies, but favorable determinations in these cases are only part of the solution.  Permanent shutdowns of steel mills in countries whose sectors are not market-driven are needed to ensure the viability of the global steel sector.

The steel sector is the backbone of U.S. manufacturing and critical to our country’s economic strength.  If left unaddressed, global oversupply will force American steel facilities to lay off their workers and close their doors.  I urge the U.S. delegation to work with the Steel Committee to bring balance back to the global steel sector. 

 

Sincerely,

 

Sherrod Brown

United States Senator

 

 

###