WASHINGTON -- A newly released report shows up to 583,000 American steel-related jobs -- including 33,900 jobs in Ohio in communities such as Youngstown, Warren, Niles and Brookfield -- could be at risk if the United States doesn’t fully enforce trade laws.
The report, conducted by the Economic Policy Institute for the Alliance for American Manufacturing and released Tuesday, comes as the U.S. Department of Commerce considers whether it will impose trade remedies on unfairly subsidized and dumped oil country tubular goods imports from South Korea.
Among the companies petitioning Commerce for trade remedies are Vallourec Star L.P., which has plants in Youngstown; TMK IPSKO, which has a plant in Brookfield; JMC Steel Group (Energex Tube), with facilities in Warren, Niles and Cambridge; and U.S. Steel Corp., with plants in Lorain and Leipsic. Commerce has until July 8 to decide whether to impose the trade remedies.
According to the report, OCTG imports from nine counties, chief among them South Korea, more than doubled between 2010 and 2012. From 2011 to 2013, domestic steel imports increased by 12.8% and surged even more sharply during the first two months of 2014, hitting 6.4 million net tons, an increase of 24.5% over the same period in 2013.
“South Korea has no home market for OCTG and sends nearly all of its product to the United States -- consistently below fair market value,” said Scott N. Paul, president of the Alliance for American Manufacturing. “If Congress doesn’t act, we’ll head down a path of swapping our dependence on foreign oil with a dependence on foreign energy infrastructure.”
Domestic steelmakers production, capacity, utilization, shipments and sales all fell in the first quarter of 2013, and the industry slashed operating income by nearly $191 million. Hours increased for the more than 7,000 workers in the U.S. OCTG industry but combined wages fell.
“American producers are increasingly losing sales to foreign competitors like Korea because OCTG imports are being dumped into the U.S. market. Full enforcement of our trade laws is critical for the future of this industry and its workers,” said U.S. Sen. Sherrod Brown, D-Ohio.
Brown is a member of the Senate Manufacturing Caucus, vice-chairman of the Senate Auto Caucus, and incoming chairman of the Senate Steel Caucus.
Since the beginning of 2012, an estimated 4,184 workers in eight states have lost their jobs to the import and resulting shifts in production. Nearly 1,000 steel jobs have been lost during the first three months of 2014.
“As a United Steelworker and a small business owner, I personally experience how the plant's ups and downs create a ripple effect throughout the community,” said Ralph Mercado, expediter at U.S. Steel’s Lorain Tubular Operations. “It's not just those of us who work at U. S. Steel who are affected by unfair trade -- it's our families, neighbors and other business owners. We all suffer when the mill can't operate because of unfair trade.”
Also according to the report:
- The excess capacity plaguing the industry stems largely from state support for – and direct government involvement in – the steel industry in other countries. In 2011, half of the world’s 46 top steel companies were state-owned, and they accounted for nearly 40 percent of global production.
- U.S. imports of unfairly traded products are increasing as countries such as China and others deceptively sell subsidized basic steel products to companies in third-party countries, who in turn finish these products, like pipes, for sale in the American market.
- Aggressive government support, coupled with the steel industry’s capital-intensive nature, leads to the kind of import surges now threatening the American market. Strong trade remedies have been critical to the health of domestic industry during previous periods of trade distortions, and are necessary now if the industry is to avoid long-term damage.
- The report concludes that unless policymakers insist established trade rules remain strictly enforced, the consequences for domestic steelmakers and their workers will be dire. In the OCTG market, both management and workers warned about the long-term effects of overcapacity.
SOURCE: Economic Policy Institute for the Alliance for American Manufacturing.
Published by The Business Journal, Youngstown, Ohio.
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