*EPF408 02/28/2002
Excerpt: Lawmakers Urge Tariff to Protect Domestic Steel Industry
(Feb. 27 House debate on need to protect steel industry) (2690)

Members of the Congressional Steel Caucus called on the Bush administration to consider a 40 percent tariff on imported steel to protect America's steel industry in a February 27 debate in the House of Representatives.

Led by Representative Phil English (Republican of Pennsylvania), a number of lawmakers rose to make the case for protecting the American steel industry from subsidized foreign competitors dumping steel into the U.S. market at prices below production costs.

English, a member of both the House Ways and Means Committee and the Joint Economic Committee, is the chairman of the Congressional Steel Caucus.

He told his House colleagues that he is urging the Bush administration to impose "credible tariffs over the next 4 years."

Representative John Shimkus (Republican of Illinois) said the Congressional Steel Caucus has sent a letter to President Bush asking for "a minimum of 40 percent tariff to be implemented over 4 years on all imported steel products."

"Now is the time to institute the highest tariff levels of at least 40 percent if the steel industry is to recover," agreed Representative David Phelps (Democrat of Illinois).

Last year, he noted, the President directed the International Trade Commission to undertake "one of the most extensive and complex investigations into the section 201 history."

The Illinois Democrat said he applauded President Bush "for this leadership, very much needed assistance for an ailing industry."

The International Trade Commission, he went on, "ruled unanimously that nearly 80 percent of the product lines of the American steel industry have been seriously damaged by surges of low-priced foreign imports."

Representative Sherrod Brown (Democrat of Ohio) complained that the United States "has become the world's steel dumping ground, costing U.S. jobs, hurting U.S. families, and damaging the U.S. economy."

During the 1998 steel crisis in the United States, said Brown, the trade deficit in steel "was almost $12 billion, accounting for nearly 7 percent of our overall trade imbalance."

Following are excerpts from the February 27 debate in the House of Representatives from the Congressional Record:

(begin excerpt)

AMERICAN STEEL INDUSTRY CRISIS
House of Representatives
February 27, 2002

Mr. ENGLISH. Mr. Speaker, America is at a critical moment. The domestic steel in its industry and the current workforce retirees and their dependents are clearly at a vital crossroad. Without strong relief under the section 201 action that this administration has called forth utilizing that section of our trade laws, the future of the industry is clearly grim. Thousands of steelworkers already have lost their jobs, and thousands more jobs are at stake. Beyond that, pension and health care benefits are in jeopardy for hundreds of thousands of retirees. Now is the time to provide relief for this beleaguered domestic industry.

The Bush administration took the vital first step by initiating the 201 investigation, and now the results are in. The investigation demonstrated what the industry and its workers have known all along, the rest of the world is not playing by the same set of rules. Meaning, the steel score sheet has long been skewed to provide foreign competitors with an unfair handicap, making it unnecessarily difficult for U.S. producers to compete. That has to stop. . . .

Inaction or weak action would silence many steel plants, while destroying the livelihood, the good-paying jobs of the workers, their families and communities, and dealing a blow to our national economy and to our national security.

I applaud the Bush administration for stepping up to the plate for the American steel industry and its workers, something that previous administrations had been reluctant to do.

With that, I urge the Bush administration in the next week in making a decision on this steel 201 to knock the ball out of the park by imposing credible tariffs over the next 4 years. . . .

Mr. SHIMKUS. Mr. Speaker, We have would not be here if the President had not invoked section 201; and we would not be here if the ITC, the International Trade Commission, had not found in essence in our favor that there has been some illegal dumping.

We hear a lot on trade, and a lot of the debate stems around free and fair trade. I think it is pretty clearly evident that when trade is not fair then we need to do just what we did in this case so far. What we have done so far is asked for a section 201 hearing that has been found in our favor, and now the administration has to finish the deal. They have a deadline of March 6 in which they are going to recommend the type of penalties that this country would like to see to get our steel industry back on sound footing; and, as with every other issue, there is always a debate of what those penalties should be.

Well, the Steel Caucus, which the gentleman chairs and which we have many members of, have tried to weigh in on this. We have sent a letter to President Bush asking for a minimum of 40 percent tariff to be implemented over 4 years on all imported steel products. That is what we can do now, and I am glad to have signed that letter and sent that.

But I also had a chance to personally speak with Secretary Evans on this issue and reiterate the importance of some strong, strong penalties, not only to help our domestic steel industry, but it sends a signal to the rest of the countries that we want to trade and do business with. We can compete with them. We cannot compete with them if they have subsidized their production, and that is what they do by a term called dumping, which means foreign countries are selling steel to us at below-market prices, usually subsidized by their own government.

The International Trade Commission's ruling, they said that we in our domestic steel industry suffered serious injury due to the surge in imports. So that is why we need a substantial tariff for a maximum length of time, because the majority of steel that is making its way to America from off shore is being heavily subsidized.

The imposition of tariffs over a 4-year period will demonstrate to foreign producers and governments that this administration is serious about addressing the problem of foreign excess steel capacity. And it is kind of ironic that our European allies, from what I understand, are not supportive of our heavy tariffs because they fear that if we are successful then they will be the target for the illegal dumping of steel and then they will have to deal with this issue.

So we need to make sure that our allies and friends understand that steel is also a national security issue and it is important for us to have that domestic capability.

The administration must take this lead in developing a plan to address the critical legacy costs, which are preventing the industry from restructuring. The progress of the President's comprehensive steel strategy demonstrates once again his strong, decisive leadership on behalf of America, American workers and American families. It is now time to take the next step and implement a remedy that would be advantageous to the U.S. steel industry. I am confident that this Congress working with this President will provide help for those who have lost their jobs and benefits as a result of the bankruptcy of the steel industry.

The 40 percent tariff that we suggest would bring the domestic steel industry back to a level playing field with foreign competitors and hopefully bring an end to the steel crisis in our country, not only for the factory itself, but for the workers, and not just for the current day workers but for the retirees. . . .

Mr. PHELPS. Mr. Speaker, I rise to discuss the crisis the steel industry faces. The American steel industry and the steelworkers are in the midst of possibly the worst crisis ever due to the continued illegal dumping into this country of foreign-made steel.

Thousands of steelworkers have lost their jobs, and countless more are in jeopardy. In my congressional district in Central and Southern Illinois the effects have been devastating. Yesterday, I attended a steel rally in Greenwich City, Illinois, and was able to hear firsthand the effects this has had on the local economy.

Now is the time to institute the highest tariff levels of at least 40 percent if the steel industry is to recover.

Last year, the President directed the International Trade Commission to undertake one of the most extensive and complex investigations into the section 201 history. I applaud the President for this leadership, very much needed assistance for an ailing industry. The International Trade Commission ruled unanimously that nearly 80 percent of the product lines of the American steel industry have been seriously damaged by surges of low-priced foreign imports. The most severe violations of U.S. trade laws have taken place since 1998.

The devastating impact that low-priced steel imports have had on American steel companies is amply evident; and, as a result of foreign dumped steel since 1998, 31 steel companies have filed for bankruptcy nationwide. Of these, four are located in my home State, Illinois, which has caused over 5,000 Illinois steelworkers to lose their jobs.

The International Trade Commission has recommended the President impose tariffs of up to 40 percent on a broad variety of steel products over a 4-year period. I strongly urge the President to impose the highest tariff rate for 4 years on all subject steel categories as the first step in saving our American steel industry and the jobs and the health insurance of Illinois steel makers and over 50,000 retirees in Illinois.

The domestic steel industry has invested billions of dollars in upgrading and modernizing its facilities and, as a result, is among the most productive makers of high-quality steel in the world. No industry, no matter how productive, however, can compete against the onslaught of low-priced and often unfairly traded steel imports. It is imperative we send the strongest possible message to deter our trading partners from further illegal dumping and to give the domestic steel industry the time it needs to recover from its injury. Anything less would be a disservice to those working men and women who are counting on government to stand up for them.

In this body last year we have deliberated several trades issues and even this year. Some are disagreed upon and some have total agreement, and it is not even by party lines. Unfortunately, it is by geographical, cultural differences, many times, rather than party line.

And we have a healthy debate. One was such as permanent normal trade relations with China. The reason I resisted that proposition and opposed it is that in my 19th District in Illinois we are exporting jobs because of trade policies such as free trade and the P.N.T.R. motion that we looked at and debated on this floor.

I know that many people have stock in the fact that this will help us, our country; but I say right now, in the 19th district, that is just the opposite case.

We had 10 years of China breaking their word, violating their contracts with this country on items that left us $82 billion in trade deficit. Now, the reason I mention that is in this context. One blow after another to the American worker is adding to a serious situation not only of our economy but the quality of products that we produce even for our defense system; and that borders on compromising our national security. . . .

Mr. BROWN of Ohio. Mr. Speaker, The U.S., as we know, has become the world's steel dumping ground, costing U.S. jobs, hurting U.S. families, and damaging the U.S. economy. During the 1998 steel crisis, the trade deficit in steel was almost $12 billion, accounting for nearly 7 percent of our overall trade imbalance. We have known from other Special Orders in this body and from other debates in this body that legislation like NAFTA, GATT, which formed the World Trade Organization, PNTR, giving special trading privileges to China, and Fast Track legislation, which passed this body by one vote last year, that this body of trade law that this Congress in my mind has wrongly passed, has damaged this country and that has put us in this situation where we have these huge trade deficits. And our steel deficit is one of the major parts of that.

That means that we are buying a lot more steel in this country than we are exporting, $11.7 billion worth. The bulk of these imports in steel were subsidized by foreign governments and illegally dumped below market prices in the United States. Under Federal trade law, and international trade law too, it is illegal to subsidize a product through a variety of different means that governments do and then sell it under cost into another country, thereby undercutting that domestic industry's products.

Today, we import 39 million tons of steel, more than double the amount we imported in 1991, and steel prices are below 1998 levels. The surge in illegally dumped steel has obviously been incredibly damaging to the domestic steel industry. Since 1998, 26 steel companies have filed for bankruptcy, 17 in the last year. That includes three in my State, including LTV in Cleveland, including RTI in Lorain, where there is a major plant in Lorain and the community, which I call home. . . .

On March 6, the President will announce his decision on the recommendation of the International Trade Commission for tariffs on illegally dumped steel. We need a strong response. As the gentleman from Illinois (Mr. PHELPS) and others have said, we need a 40 percent tariff, which is what the ITC has recommended, if the President goes along.

A year and a half ago we heard Vice President Cheney, while in Weirton, West Virginia, say we will never lie to you. If our trading partners violate trade laws, he told steelworkers, we will respond swiftly and firmly. We need the administration's swift response; we need their firm response on steel dumping now more than ever.

If they are sincere about helping steel, and I take them at their word, although there has been a pretty big delay in the President acting, he was originally supposed to act in mid-February, and every day the President fails to act, every day of delay causes more duress to the American steel industry, more layoffs, more bankruptcies, and more likely failed steel companies; but taking the President at his word, we call for him to do the 40 percent tariffs for 4 years. Anything less simply will not cut it.

It does not mean 40 percent with hundreds of exceptions, as steelworker president Mr. Leo Gerard told the gentleman from Pennsylvania (Mr. ENGLISH) and me and some others this afternoon. We must protect the 700,000 hard-working families who rely on this industry for their salary, for their pensions, for their health benefits, and all of us who rely on this industry for our national security. . . .

It is important the President do the right thing on or before March 6. We need the 40 percent tariff. We need that tariff in effect for 4 years until this industry gets back on its feet and American steel can have a level playing field from which to compete. It is important that Congress move on section H.R. 808 and override the Republican leadership to stop it. It is important that Congress stop passing legislation like Fast Track and NAFTA and the World Trade Organization, the way it was created, and PNTR for China, and all the trade agreements that have put us behind the 8-ball.

It is important that this Congress and this President finally do the right thing for American workers. . . .

(end excerpts)

(end excerpt)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

Return to Public File Main Page

Return to Public Table of Contents