Lawmakers Urge Obama to Address Steel Issues

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(Image Courtesy: ArcelorMittal) For decades, Indiana has produced more steel annually than any other state. (Image Courtesy: ArcelorMittal) For decades, Indiana has produced more steel annually than any other state.
WASHINGTON, D.C. -

Several Indiana lawmakers are addressing an ongoing concern they say could impact the state’s steel industry. Nearly 70 members of the Congressional Steel Caucus have sent a letter urging President Barack Obama to discuss steel issues with Chinese President Xi during his visit to the United States.

The caucus includes Pete Visclosky (D-1), who is vice chair, Jackie Walorski (R-2), Luke Messer (R-6) and Andre Carson (D-7).

The letter states that American steelworkers are “under attack every day from illegal Chinese imports.” The letter also requests that President Obama address Chinese government policies related to illegal subsidies, currency manipulation, and state-owned enterprises.

“We have the most talented workforce making the world’s highest quality products, yet the American domestic steel sector is getting trampled on because the Administration is not willing to stand up to China’s illegal dumping and currency manipulation. Simply put, the American steel industry, and consequently economy, cannot thrive as Chinese steel continues to wreak havoc on our manufacturing, natural gas and auto industries. The Administration cannot allow China’s current illegal practices to continue as more than one million Americans jobs are on the line. We urge the President in the strongest of terms to take action,” Chairman Tim Murphy said.

Vice Chairman Pete Visclosky stated, “China is illegally exporting their steel.  They are selling an inferior product below production costs and that is placing our free market system in great peril.  Chinese steel is destroying our nation’s manufacturing base and threatening our nation’s defense.  We must fight for American steel and a fair playing field for current and future steelworkers.”

Here is the letter to President Obama:

Dear Mr. President,

We write today as members of the Congressional Steel Caucus to request that you address long-standing issues of great importance to the American steel industry during Chinese President Xi’s upcoming visit. 

Since 2000, Chinese steel production has increased by 695 million metric tons, which is nearly eight times the total amount of steel produced in the United States.  China currently produces as much steel as the rest of the world combined.  Through the first seven months of 2015, China has exported 67 million metric tons of steel, which is a 27 percent increase over 2014 figures.  Much of this Chinese steel arrives on American shores, and is sold artificially low at approximately 25 percent less than the steel that is produced domestically. 

We know that America makes the best steel in the world, but we cannot compete against China when they do not play by the same market rules.  We request that you specifically address the issues below with President Xi.     

Illegal Subsidies – At the heart of the growth in Chinese steel production are illegal government subsidies.  During U.S. trade case proceedings, the Department of Commerce has specifically identified illegal Chinese subsidies, including preferential lending through state-owned commercial or policy banks, assistance providing electricity, inputs, and land, and the direct transfer of government funds to Chinese steel producers. 

Currency Manipulation - China continues to manipulate its currency in order to give their steel producers an unfair advantage in the U.S. market.  Despite recent announcements, China’s currency is not freely tradable and the government still controls its value.  Unless China addresses this issue or the U.S. establishes currency manipulation as a countervailable duty, China’s currency practices will continue to devastate American steel.  

State-Owned Enterprises – It is estimated that 95 percent of steel produced by the top 20 Chinese steel groups is from state-owned enterprises.  These producers operate under bureaucratic policies and not market principles.  The Chinese government also has established a policy objective of “more effectively bringing about the role of government and guiding the next ten years of the steel industry’s development.” 

American steelworkers are under attack every day from cheap Chinese imports.  It is past time that we take action.  We thank you for the opportunity to express our concerns and appreciate your consideration of addressing these critical issues with President Xi. 

Sincerely,

Congressman Tim Murphy, Chairman, Congressional Steel Caucus

Congressman Peter J. Visclosky, Vice Chairman, Congressional Steel Caucus                    

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