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Schumer Says in Upcoming Trade Talks, USTR and Dept. of Commerce Must Press Chinese Officials on Unfair Practices Undermining American Steel and Aluminum Producers

Senator Says Foreign Subsidies Cause Artificially Cheap Aluminum & Steel Imports To Undercut U.S. Producers, Putting Jobs At NY Companies At Risk

Schumer To Feds: Stop China and Others From Hurting Upstate Aluminum & Steel Industry

U.S. Senate Minority Leader Charles E. Schumer recently urged Secretary of Commerce Wilbur L. Ross, Jr. and United States Trade Representative Robert Lighthizer to resolve the ongoing investigations into the impact of steel and aluminum imports on national security formally known as “Sec. 232 investigations.” Schumer said, robust steel and aluminum industries are vital to our defense industry and critical infrastructure; industries that are currently being undermined by artificially priced imports. Schumer said swift action is needed to protect, Nucor, Alcoa, Novelis, Welded Tube, Klein Steel and workers throughout the steel and aluminum value chains from the recent surge in imports.

“There are top notch manufactures like Alcoa and Nucor ready to provide high-quality aluminum and steel to businesses in and around the country, but China’s overproduction has resulted in a substantial threat to Upstate New York’s metal industry by making it almost impossible for companies that play by the rules to compete,” said Senator Schumer. “The aluminum and steel we use to build our planes, trains and bridges should be proudly stamped ‘Made in America,’ and more of it should come from companies in Upstate New York. But in order for that to happen, we must stop heavily subsidized foreign companies, like those in China, from dumping these artificially cheap metals in our markets. So I am urging the U.S. Trade Representative and Department of Commerce to press China to cut their subsidies and use our trade laws to effectively guard against this unfair competition.”

“Senator Schumer understands that strong, decisive action by our government is needed to fight unfair trade practices and ensure the national security of the United States,” said Drew Wilcox, Vice President & General Manager of Nucor Steel Auburn, Inc. in Auburn, NY. “Action under Section 232 is urgently needed to restore healthy levels of capacity utilization and profitability to U.S. steelmakers. Our leaders must send a strong signal to foreign governments that unfair trade practices will not be tolerated.”

“Pipe and tube imports have entered the U.S. at staggering levels since April 2017 and companies like Welded Tube of Lackawanna are anxiously awaiting the outcome of the Steel Sec. 232 investigation - decisive action that provides relief will ensure that the company and others can continue to be part of the nation’s economic recovery,”? Welded Tube USA.

Schumer says that subsidies from China and other countries violate our trade rules and threaten Upstate New York manufacturers. Schumer, in his letter explained that China and other foreign governments continue to provide massive subsidies to their steel and aluminum sectors in order to boost their economic growth. This foreign steel and aluminum is exported to the United States at artificially cheap prices, which undercuts United States producers like Alcoa and Nucor and the companies that use US-produced raw steel like Klein Steel. Reports regarding import restrictions resulting from the 232 investigations have caused a surge in these exports to the United States. According to the American Iron and Steel Institute, steel imports by net weight are up 25 percent when compared to last June. ?

Schumer has long pressed previous administrations to secure commitments from China to cut their steel and aluminum capacity. Schumer supported the “Level the Playing Field Act” which strengthened U.S. antidumping laws and has advocated for the vigorous enforcement of U.S. antidumping and countervailing duty laws. These efforts have helped the U.S. steel and aluminum industries put in place more duties on artificially cheap steel and aluminum imports. However, subsidized steel and aluminum from China and other countries is being rerouted through third countries in Asia and exported to the U.S. without being assessed duties. The 232 investigations could result in broad-based action to curb steel and aluminum imports from many countries. As a result, Schumer is urging that, in addition to swift action on the 232 investigations, the administration take actions to safeguard Upstate New York’s aluminum and steel industries’ long-term competitiveness by; prioritizing concessions to eliminate steel and aluminum subsides from China, defending U.S. trade enforcement laws at the World Trade Organization (WTO) and challenging China’s aluminum subsides at the WTO.

A copy of Senator Schumer’s letter to Secretary Ross and Ambassador Lighthizer:

Dear Secretary Ross and Ambassador Lighthizer:

I write on behalf of my constituents who are employed by the aluminum and steel industries in New York. U.S. aluminum and steel workers in New York and across the country have long-suffered from foreign predatory trade practices. I ask that you carefully consider submissions from Nucor, Alcoa, Novelis and the United Steelworkers in the Department of Commerce’s ongoing Section 232 investigations involving aluminum and steel imports and their impact on national security. In these investigations and the administration’s efforts to support the U.S. steel and aluminum industries and their workers, I urge you to focus on the fundamental threat to these industries — overcapacity in China and elsewhere — and quickly address this ongoing problem.

New York is home to two large aluminum manufacturers: Alcoa, which employs 600 workers in Massena and Novelis, which employs around 1,180 workers in Oswego. The ability of these companies to compete has been impaired by China’s market distorting practices, including its large government subsidies which have resulted in enormous overcapacity. The International Trade Commission’s recent Sec. 332 report on the U.S. aluminum industry confirms that China’s market distorting subsides have negatively impacted the industry, lowering U.S. primary and secondary aluminum production. Currently, only five primary aluminum smelters remain operational in the U.S. — down from 23 in 2000 — and only two are fully operational, including Alcoa’s Massena operation.

New York is also home to major steel manufacturers, including Nucor, which employs over 580 workers in Auburn, Chemung and Albany. Similarly, Nucor has suffered as massive global steel overcapacity and market distorting practices in China and other countries have caused steel imports to remain at high levels, with near record market share despite numerous recent steel antidumping and countervailing duty orders.

I was encouraged by the announcement of the 232 investigations earlier this year; however, I have since become concerned with the administration’s inaction in resolving these investigations. Since June, the President and administration officials have publically mentioned the potential imminent announcement of actions to curb imports through the 232 investigations, but to date no announcement has been made. These reports have caused a surge in steel and aluminum imports as foreign producers were encouraged to export to the U.S. before anticipated import restrictions could be put in place and have had ample time to do so. I was also dismayed to learn that the administration was not able to secure any major commitments on overcapacity at the Group of 20 (G-20) summit in July or in the “100-day action plan” trade negotiations with China.

The Department of Commerce should act quickly to support American workers at Nucor, Alcoa, Novelis and throughout the steel and aluminum value chains. Robust steel and aluminum industries are vital to our defense industry and critical infrastructure. My constituents have informed me that meaningful broad-based action to curb aluminum and steel imports, targeting imports that originate from countries like China that heavily subsidize their exports while maintaining needed supply chains, is essential to providing needed relief to these industries. Additionally, to safeguard the U.S. aluminum and steel industries’ long-term competitiveness, the administration must directly secure enforceable commitments from China and other countries to substantially reduce steel and aluminum overcapacity. However, without indicating the willingness to use meaningful broad-based trade action, there is little hope that negotiations to reduce capacity will bear fruit.

In addition to prompt and decisive action pursuant to the 232 investigations, I would urge the administration to consider the following actions:

  • The administration should first and foremost, prioritize securing concessions from China and other countries to eliminate steel and aluminum subsidy programs and other market distorting policies through the Comprehensive Economic Dialogue and other bilateral forums.
  • To apply additional pressure, the administration should accelerate efforts regarding overcapacity at G-20 and the Organization for Economic Co-operation and Development forums. Specifically, the administration should seek to create a global forum on aluminum excess capacity through the G-20.
  • The United States Trade Representative should work to aggressively defend U.S. antidumping and countervailing duty laws from challenges at the World Trade Organization (WTO).
  • The United States Trade Representative should pursue the complaint against China’s primary aluminum subsidies at the WTO, launched by the Obama Administration in January of this year, as a long-term solution.

Senate Democrats have outlined proposals in our Better Deal trade agenda to provide the administration with greater tools and resources to enhance U.S. trade enforcement efforts. One such proposal would establish a Trade Prosecutor's office to more efficiently address foreign governments' anticompetitive practices. I hope you will consider working with us on these proposals to enhance U.S. trade enforcement efforts.

U.S. aluminum and steel workers who support their communities and our national security infrastructure deserve to compete on a level playing field. Again, I urge you to carefully consider submissions from my constituents and swiftly act to contest China’s and other countries’ anticompetitive practices that unfairly undermine their ability to produce.

Thank you for your attention to this matter.

Charles E. Schumer