U.S. Steel’s campaign to exclude Chinese steel imports would make U.S. companies that manufacture products from steel less competitive, steel users told a federal agency. They also said domestic steelmakers either don’t want to make some of the steel they need or can’t make it as reliably as Chinese suppliers do.
The comments were made in letters sent to the U.S. International Trade Commission, which is considering a trade complaint U.S. Steel filed April 26.
The complaint accuses China’s largest steel producers of conspiring to fix prices, stealing trade secrets by hacking the Pittsburgh company’s computer system, and evading duties imposed on Chinese steel by falsely labeling imports.
The steelmaker is asking the ITC to exclude all unfairly traded Chinese steel products from the U.S. market. How such a ban would affect the U.S. economy and consumers is one factor that the agency must consider in determining what to do about the complaint.
U.S. Steel has asked about 300 of its suppliers to urge the ITC to take up the case. But the steel users who contacted the agency want the complaint to be thrown out.
Daniel Cosio of Ball Metal Food Container in Westminster, Colo., told the ITC that banning Chinese steel imports would lead to “short supplies, higher prices and fewer alternatives for companies like ours.”
“The products we buy from [China] are not available from U.S. producers in the quality and quantity provided by the [Chinese],” Mr. Cosio wrote. “The level of service that [Chinese producers] provide is superior to the service provided by domestic steel producers.”
Michael Papera, who purchases steel for Allstate Can in Parsippany, N.J., told the agency that the steel his company buys from Baosteel of China “is by far superior to anything purchased domestically in the way of shape and performance.”
Baosteel is one of the Chinese producers targeted by U.S. Steel.
Neal Lux, president of Global Tubing, said the Dayton, Texas, company worked with an unnamed U.S. steelmaker to provide steel used to make tubing for the energy industry.
“The results were disastrous,” he wrote.
Mr. Lux said Global Tubing paid more than $2 million to settle damage claims filed by companies that purchased the tubing and was stuck with another $1.9 million in inventory.
The agency also received comments from U.S. Steel supporters, including U.S. Sen. Bob Casey, D-Pa.; United Steelworkers union international president Leo Gerard; and JMC Steel Croup, the parent of Sharon Tube and Wheatland Tube, two Western Pennsylvania companies.
Barry Zekelman, JMC’s chairman and CEO, said the Chinese practices U.S. Steel identified in its complaint “have wreaked havoc in the American market, with thousands of steelworkers laid off and mills idled, threatening our national economic health and national security.”
Lawyers for Baosteel and Hunan Valin Steel, another Chinese producer cited by U.S. Steel, said the complaint jeopardizes U.S.-China diplomatic relations, is a waste of government resources, and, if it succeeds, would force U.S. consumers “to settle for inferior products that are manufactured using antiquated technologies.”
“Never before has a single company sought to use this agency to erect what would be a total blockade of steel trade from an entire country,” lawyers for Baosteel wrote the commission.
U.S. Steel and other domestic steelmakers blame their plight on a glut of global steelmaking capacity. They say China is responsible for much of the surplus. They accuse the Chinese government of subsidizing unprofitable companies that export under-priced steel to the U.S., putting about 13,500 steel workers out of work.
Chinese steel imports fell nearly 26 percent last year, accounting for 7.6 percent of all finished steel imports. They dropped another 67 percent in the first quarter and represented just under 4 percent of all imports.
The ITC has 30 calendar days from the filing of the April 26 complaint to decide whether to launch an investigation.
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