Congressional Steel Caucus hears arguments about unfair and illegal practices by foreign traders

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WASHINGTON — Lawmakers from steel-producing states are pressing the Commerce Department to impose countervailing duties on foreign competitors including Korean and Turkish producers of oil pipe and rebar believed to be engaging in unfair trade.

Members of the Congressional Steel Caucus convened Tuesday to hear concerns from industry stakeholders who said their companies are being threatened by unfair and illegal practices by foreign traders. Speaking were United Steelworkers president Leo W. Gerard, U.S. Steel CEO Mario Longhi and Carl R. Moulton, International Allegheny Technologies senior vice president.

Members were widely receptive to their message and to their pleadings for the U.S. to enforce its own laws, to report violators to the World Trade Organization, to invest in the American workforce, to remove import incentives, to stop foreign manufacturing subsidies, to fight foreign currency manipulation, to reduce burdensome regulations and to redefine “American-made” to exclude steel poured overseas but finished domestically.

“With abundant energy resources, American steel is poised to make a comeback, which is why it is critical that we act before our economic momentum is stalled by illegal trade practices,” said Rep. Tim Murphy, R-Upper St. Clair, who chairs the caucus.

Mr. Longhi told lawmakers that South Korea created a network of related companies in order to circumvent U.S. trade laws and that it is “dumping” steel here — that is, selling it for less than it costs to produce in an effort to put the American industry out of business. Other witnesses testified that Turkey is doing the same with rebar.

“Rule breaking is cheating. And trade based on deception can never be fair trade,” Mr. Longhi told members of congress.

“We rely on you, our government, to enforce these rules and punish the rule breakers,” he said. “All we ask for is a level playing field — the one our trade laws promised we would have.”

Mr. Murphy said the Steel Caucus will encourage the Commerce Department to impose countervailing duties to ameliorate unfair foreign advantages.

“If the Department of Commerce does not impose duties … it may be time for Congress to pursue other remedies including legislation,” Mr. Murphy said.

Commerce spokespeople did not immediately respond to a request for comment.

Last month, a preliminary ruling by the department imposed tariffs on goods from eight other countries but not South Korea. Lawmakers and industry leaders said that was disappointing.

It ended up being a lesson to the rest of the world in how to bypass U.S. trade law, Mr. Longhi and Mr. Gerard said.

“Our own government appears to be looking at lost American jobs and lost U.S. capacity as the price of maintaining strategic foreign relations,” Mr. Gerard said in prepared remarks. “Right now we are unilaterally disarming our nation’s steel and manufacturing sectors and undermining our national and economic security. Bold and decisive action is needed.”

In bold and sometimes colorful language, Mr. Gerard went off script when he addressed the panel.

“The rest of the world has a blueprint to eliminate our steel industry” and the U.S. government isn’t responding even as American jobs are being threatened, he said.

“I see these people every year who are living on the edge of losing their jobs, and the only place it can get fixed is right here in the Congress,” he said. “I’m not here crying wolf. I’m letting you know that unless you take strong action I don’t know how we can get out of this crisis.”

Another place Congress can help is by redefining “made in America” when it comes to Department of Defense steel acquisitions, Mr. Moulton said. Under current rules the Pentagon can buy steel plates that are finished in the U.S. even if the more intensive melting and casting was done overseas, explained Mr. Moulton, who testified on behalf of the Specialty Steel Industry of North America, a trade group he leads.

Mr. Longhi also asked the panel for tax relief.

“Whatever the tax code … it has to produce a net reduction in taxes … for us to be able to invest and create the jobs you’re looking for,” he testified.

Washington Bureau Chief Tracie Mauriello:, 703-996-9292 or on Twitter @pgPoliTweets. First Published March 25, 2014 2:16 PM

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