Senate Finance Committee Calls for Effective Enforcement to Stop Trade Cheating

By Elizabeth Brotherton-Bunch
Apr 12 2016 |
Senate Finance Committee Chairman Orrin Hatch (pictured) joined Ranking Member Ron Wyden and more than a dozen Senators to send a letter to USTR Michael Froman and Commerce Secretary Penny Pritzker. | Photo by Gage Skidmore

Senators ask Obama Administration to “fully implement and enforce” U.S. trade laws.

Bipartisan members of the Senate Finance Committee on Monday called on U.S. Trade Representative Michael Froman and Commerce Secretary Penny Pritzker to enforce U.S. trade laws — including the customs bill that became law earlier this year — to address global overcapacities in steel, aluminum and other industrial sectors.

The Senators wrote to Froman and Pritzker ahead of a big hearing kicking off Tuesday that’s being hosted by the USTR and Commerce looking at overcapacity in the global steel market. Much of the problem lies with China, which heavily subsidizes its steel industry, continues to churn out more steel than it can use and then dumps all that extra steel into the U.S. market at rock-bottom prices.

As the Senators write:

“As the Organization for Economic Cooperation and Development (OECD) has noted, global crude steelmaking capacity more than doubled between 2000 and 2014, with growth during this period led principally by China. Certain Chinese industrial policies to encourage capacity expansion, including through subsidies and other market-distorting measures, were an important contributor to this growth. Meanwhile, global demand for steel, including U.S. demand and Chinese demand, has decreased. As a result, significant increases in exports of Chinese steel have entered global markets, including the United States, impacting U.S. steel producers, steel consumers, steel industry suppliers, steel industry workers, and communities across the United States.”

The Senators add that one solution to the problem is strong trade enforcement, and call upon the Obama Administration to fully implement and utilize the trade laws on the books:

“However, effective utilization of U.S. trade laws requires that the Administration fully implement and enforce them, including by providing necessary resources for those purposes. To this end, we will continue to monitor closely the Administration’s implementation and enforcement efforts.”

In addition, the Senators urge the administration to “engage immediately with similarly situated trading partners to ensure durable, transparent, and verifiable solutions.”

One thing is clear — China’s steel overcapacity isn’t going away anytime soon. As we noted on the blog on Monday, Chinese officials recently acknowledged that significant steel overcapacity will remain even after China restructures its industry to reduce production.

Meanwhile, roughly 13,500 American steelworkers are now coping with layoffs. Six steelworkers will join legislators, steelmakers and other experts (including AAM President Scott Paul) at the USTR steel hearing to talk about the devastating impact China’s steel overcapacity has had in communities across America.

On Thursday, the Congressional Steel Caucus will hold its annual “State of Steel” hearing to look at the impact of the steel imports crisis. Steel company leaders and United Steelworkers International President Leo Gerard will testify.

We’ll have updates on the blog and social media throughout the week. Follow us on Twitter via @keepitmadeinusa and at facebook.com/americanmanufacturing