WASHINGTON, D.C. — Today, U.S. Sen. Sherrod Brown (D-OH) helped release a new report showing that up to 583,600 American steel-related jobs – including 33,900 Ohio jobs – could be at risk if the U.S. does not fully enforce trade laws. The report, conducted by the Economic Policy Institute (EPI) for the Alliance for American Manufacturing (AAM) examined how unfairly subsidized and dumped imports of oil country tubular goods (OCTG) affect American steel jobs. Earlier this month, Brown joined Ohio steelworkers at a rally outside Lorain’s U. S. Steel to call on the Obama Administration to stand up for American steel jobs in a looming trade case pending before the Department of Commerce (DOC). DOC has until July 8 to decide whether it will impose trade remedies on unfairly subsidized and dumped OCTG imports from Korea.
“American steelmakers and workers can compete with anyone in the world with a level playing field,” Brown said. “But American producers are increasingly losing sales to foreign competitors like Korea because OCTG imports are being dumped into the U.S. market. Full enforcement of our trade laws is critical for the future of this industry and its workers.
Perhaps nowhere is the need for strong trade enforcement more apparent than in the market for OCTG, the pipe and steel infrastructure used for energy exploration. The report observes that OCTG imports from nine countries, chief among them South Korea, more than doubled between 2010 and 2012. As the surge continued, domestic steelmakers’ production, capacity utilization, shipments, and sales all fell in the first quarter of 2013, and the industry slashed operating income by nearly $191 million. The more than 7,000 U.S. OCTG workers worked more hours but saw their combined wages fall.
The harm to domestic steel producers in the OCTG market sparked a petition for trade remedy relief in July of 2013, one of 38 individual petitions filed by steel producers and workers that year. Earlier this year, DOC imposed duties on steel pipe imports from eight countries, but failed to punish South Korea—considered by the steel industry to be the worst steel pipe dumping offender. Following the ruling, Brown urged DOC to reassess the data and reevaluate the methodology it used that resulted in Korea’s exclusion.
Among the companies petitioning Commerce for trade remedies are the following companies with facilities in Ohio:
- United States Steel Corporation, with facilities in Lorain and Leipsic
- JMC Steel Group (Energex Tube), with facilities in Warren, Cambridge, Niles
- TMK IPSCO, with a facility in Brookfield, and
- Vallourec Star, L.P., with a facility in Youngstown
“South Korea has no home market for OCTG and sends nearly all of its product to the United States – consistently below fair market value,” said Scott N. Paul, President of the Alliance for American Manufacturing. “If Congress doesn’t act, we’ll head down a path of swapping our dependence on foreign oil with a dependence on foreign energy infrastructure.”
Today’s report found that significant damage to entire steel industry has largely already been done. Domestic steel imports increased by 12.8 percent from 2011 to 2013, and surged even more sharply in the first two months of 2014, hitting 6.4 million net tons, an increase of 24.5 percent over the same period in 2013. The loss of market share has translated into depressed domestic steel production and revenues, leading to sharp declines in net income in the U.S. steel industry over the past two years, as well as layoffs for thousands of American workers.
The report documents that all 583,600 steel-related jobs – including 33,900 Ohio jobs – are at risk if the U.S. does not effectively enforce its established trade remedy laws, which have historically been vital to the steel industry’s health. Already since the beginning of 2012, an estimated 4,184 workers in eight states have lost their jobs to the import surge since the beginning of 2012 and resulting shifts in production. Nearly 1,000 steel jobs have been lost in the first three months of 2014.
“As a United Steelworker and a small business owner, I personally experience how the plant's ups and downs create a ripple effect throughout the community,” said Ralph Mercado, expediter at U. S. Steel’s Lorain Tubular Operations. “It's not just those of us who work at U. S. Steel who are affected by unfair trade - it's our families, neighbors and other business owners. We all suffer when the mill can't operate because of unfair trade.”
The report further notes that:
- The excess capacity plaguing the industry stems largely from state support for – and direct government involvement in – the steel industry in other countries. In 2011, half of the world’s 46 top steel companies were state-owned, and they accounted for nearly 40 percent of global production.
- U.S. imports of unfairly traded products are increasing as countries such as China and others deceptively sell subsidized basic steel products to companies in third-party countries, who in turn finish these products, like pipes, for sale in the American market.
- Aggressive government support, coupled with the steel industry’s capital intensive nature, leads to the kind of import surges now threatening the American market. Strong trade remedies have been critical to the health of domestic industry during previous periods of trade distortions, and are necessary now if the industry is to avoid long-term damage.
- The report concludes that unless policymakers insist established trade rules remain strictly enforced, the consequences for domestic steelmakers and their workers will be dire. In the OCTG market, both management and workers warned about the long-term effects of overcapacity.
Brown continues to fight for American workers and our steel and manufacturing industries. 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.