Steel Industry Executives Testify in Congress: How to ramp up America's steel sector?
This morning, the U.S. House of Representatives's Energy and Commerce Committee held a hearing on steel production.
Scott Boos, Senior Vice President for Government Affairs & Policy at the Alliance for American Manufacturing (AAM), kept a close eye on the proceedings.
Representative Tim Murphy (R-PA)
Chairman, Congressional Steel Caucus
- American steel supports 1.2 million jobs, adds $350 billion to our national economy, and serves as the backbone — both literally and figuratively — of America’s built environment, our national defense, and our economic strength.
- In the last year, imports from China have grown 34%. Across the industry, imports now account for a quarter of steel consumption. And in the brightest segment of the steel market – oil-country tubular goods – we’re finding significant quantities of Chinese-made steel that’s been mislabeled in order to avoid duties and detection by customs officials.
- Yesterday, I introduced the Currency Reform for Fair Trade Act, HR 1276, along with a group of bipartisan lawmakers to stop this practice. Foreign governments are illegally controlling currency markets in order to prop up their steel exporters while our manufacturers suffer slowly and painfully. And now that China knows they can get away with manipulating currency markets, other nations like Japan are doing the same. America is a welcoming nation but we’re not a welcome mat. This legislation will give the Department of Commerce the necessary tools to build honest and fair trade relations that will spur an economic revival. America wouldn’t tolerate this kind of behavior by domestic companies, so why do we allow it from foreign powers? Free trade doesn’t have to be a free-for-all where only the naïve abide by the rules.
President and Ceo
Cliffs Natural Resources
- Cliffs Natural Resources plays a unique and significant role in the domestic steel industry. Cliffs is the largest producer of iron ore in North America and a significant producer of metallurgical coal for steelmaking. As a supplier to the domestic steel industry, Cliffs is a prime example of how steel production in the United States provides economic benefits well beyond those generated by steel manufacturing alone. Each job in America’s steel industry supports seven jobs in the U.S. economy.
- The prosperity of the U.S. economy is linked to the adequacy of our national infrastructure. Developing nations such as China are recognizing the importance of infrastructure with massive investments in their transportation networks. The United States can ill-afford to fall further behind in this space. In 2013, Congress should begin developing options to ensure a long-term funding mechanism for the Highway Trust Fund, as well as pursue reauthorization of the Water Resources Development Act.
- As you and your fellow lawmakers consider changes to the tax code, I urge you to critically evaluate the impact of proposed reforms on manufacturing. In order for tax reform to produce real economic growth and job creation, the tax code should not simply be changed to favor less capital-intensive sectors of the economy. In short, achieving a lower overall statutory tax rate should not come at the expense of higher effective tax rates for the businesses and industries that most support capital investment, job growth and valueadded manufacturing.
Chairman, President and CEO
Allegheny Technologies, Inc.
- This is a significant year for the industry, which is celebrating the 100th anniversary of the creation of stainless steel. As an industry, we believe that the ability to manufacture critical specialty metals for our key growth markets must remain a core competency of the United States, both from a national security and sustainable economic growth perspective.
- We see substantial evidence of unfair trade practices on the part of our global competitors, such as dumping and foreign government subsidies – we remain particularly concerned about China’s undervalued currency.
- Specialty metals are critical to our country’s defense industrial base and, as a result, we urge Congress to continue its efforts to ensure that DOD complies with both the spirit and intent of the Specialty Metals Amendment.
President and CEO
Arcelor Mittal USA
- …we need to make it a national priority to identify, encourage and train the manufacturing workers of the future. To meet the challenge of a retiring workforce, ArcelorMittal initiated “Steelworker For The Future,” an associate degree program in partnership with great community colleges located near our plants. It is a program that identifies, trains, and ultimately employs qualified students for a life long career in manufacturing.
- …we are threatened every day by the unfair trade practices of our foreign competitors.We need the U.S. Government to ferret out such practices that continue to distort steel markets and take strong action to challenge them through aggressive enforcement of U.S. trade remedies, WTO litigation, and appropriate diplomatic efforts.
- …we need a tax policy that incentivizes manufacturing, not one that shifts tax burdens away from banks and retailing and onto manufacturing. We are concerned that in the debate to lower rates and close so-called loopholes, pro-manufacturing incentives may be eliminated.
Chairman and CEO
United States Steel Corporation
- Electric utilities, industrial users including refiners, chemicals, steel, and the transportation sector, and households are all turning to natural gas as a clean and cost effective energy source.
- United States Steel Corporation has been manufacturing high-quality steel products for more than 100 years. Since 1901, our products have included pipesand tubes for energy industry customers and today we are the largest supplier of these products in North America.
- I’d like to close my remarks with a couple of comments concerning recent surges in imported steel products generally, including pipe and tube products. In 2010, the United States imported almost 2.3 million net tons ("NT") of oil country casing and tubing products, used in exploration and development of oil and natural gas. Last year, the U.S. imported over 3.4 million NT of these hightech, high value-added products. That’s an increase of more than 51 percent over a two year period.
- Given the long history of unfair trade in the steel sector, we are very concerned that foreign market distortions – including dumping and subsidies – are one of the principal underlying causes of this injurious import surge.
- As in the broader steel market, foreign government policies such as currency manipulation, government support, and closed home markets have encouraged mills in China and other countries to build far more capacity than market conditions justify. Last December, a study presented to the OECD Steel Committee estimated that the world currently has more than 500 million metric tons of excess steelmaking capacity – a figure more than five times larger than total U.S. production of crude steel in 2012. This excess capacity leads to import surges in this market, as mills around the world seek some outlet for their production.
- The time has come for a strong global consensus that winners and losers in the steel business should be determined by hard work and innovation, by costs and competition – not by market-distorting government programs.
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