Unfair Trade Continues to Threaten American Steel Jobs, Industry Leaders Tell Congress

Witnesses from labor and business told members of the Congressional Steel Caucus on Wednesday that the U.S. cannot let down its guard.

America’s steel industry made a spectacular turnaround at the start of the decade after facing years of layoffs and plant closures due to surging unfairly traded imports. But labor and business leaders warned the Congressional Steel Caucus on Wednesday morning that the United States must remain vigilant and put additional trade enforcement measures in place to maintain a robust domestic industry.

Section 232 trade action in 2018 and 2019 helped stabilize the industry, leading to thousands of new steel jobs across the country and major facility investments. Now American steel manufacturers are taking the lead in reducing carbon emissions, with Cleveland-Cliffs investing $1 billion to build a direct reduction plant that’s helped the company reduce scope 1 and scope 2 greenhouse gas emissions by 32%, President and CEO Lourenco Goncalves testified. Likewise, U.S. Steel has publicly set a goal of net zero carbon emissions by 2050.

But the problem of global steel excess capacity remains largely unresolved. While many countries are contributing to the problem, China continues to be the worst offender. A 2021 report from the Economic Policy Institute found that China “used subsidies and other forms of distortionary government support to expand steel capacity by 418%, or 930 million metric tons (MMT), since 2000, such that by 2019 it controlled just shy of half of global steel capacity.” 

The problem has only gotten worse since then, as China is now investing in steel production in a number of third-party countries. United Steelworkers (USW) Legislative Director Roy Houseman testified that China will add “nearly 100 million tons of steel capacity in Southeast Asia alone if all planned investments in the region go forward.”

All that excess steel threatens U.S. industry, as foreign producers have learned new ways to circumvent U.S. trade enforcement efforts in order to dump their product into the U.S. market. That’s why it’s so important that the United States continue to enforce Section 232 — and implement new trade tools like those found in Leveling the Playing Field 2.0, which was introduced on Wednesday, Houseman testified (Click here for more on that bill.)

Houseman also noted that it’s vital that Buy America be properly applied to government spending on infrastructure. He testified:

“The Infrastructure Investment and Jobs Act contained Build America, Buy America provisions to strengthen Buy America laws for all federal assistance infrastructure spending. Unfortunately, many agencies and departments have been slow to implement these provisions. The infrastructure bill itself, along with existing Buy America policies, has led to increased work and added jobs at USW represented iron foundries, like at a fire hydrant manufacturer in Albertville, Alabama where USW Local 65B represents over 450 workers. To build on this, the Congressional Steel Caucus should encourage agencies to speed up Build America, Buy America implementation by moving from the use of blanket waivers to narrow, transparent waivers. That kind of progress will result in more stories like Albertville, and create new good-paying, union jobs in additional industries across the country.”

You can find the opening statements of all the witnesses who appeared before the Congressional Steel Caucus over at the American Iron and Steel Institute website, and check out the full briefing here..