Portman Urges International Trade Commission to Protect Ohio Steelworkers

May 24, 2016 | Press Releases

Washington, D.C. – In testimony before the International Trade Commission (ITC) today, U.S. Senator Rob Portman (R-Ohio) urged the agency to use the tools that Congress provided them in the Leveling the Playing Field Act to protect Ohio steelworkers from countries like China, Brazil, India, Japan, Republic of Korea, Netherlands, Russia, and the United Kingdom that continue to flood the U.S. market with unfair steel imports.  Portman testified on behalf of several steel companies with Ohio locations – including U.S. Steel Corporation, AK Steel Corporation, Nucor, and ArcelorMittal – who are concerned about unfair trade practices undercutting their businesses and costing jobs.

“The American steel industry is facing a crisis,” said Portman in his testimony.  “We produce the best steel in the world, with the most productive workforce, and yet, last year, more than 12,000 steelworkers around the country were laid off. Nearly 1,500 of those were in Ohio.  These layoffs are devastating on the families of these hardworking steelworkers and the communities where they live.”

Portman’s top priority in the Senate has been boosting Ohio jobs and the economy. Portman, who has been awarded the “Congressional Steel Champion Award” for his work to protect the steel industry and Ohio steelworkers, has a long record of working to protect Ohio steelworkers from foreign cheating and delivering results to keep good jobs in Ohio.

Portman’s testimony can be found below:

Testimony of Senator Rob Portman before the International Trade Commission

Certain Cold-Rolled Steel Flat Products from Brazil, the People’s Republic of China, India, Japan, the Republic of Korea, Russia, and the United Kingdom

May 24, 2016

Madam Chairman and Members of the Commission, thank you for the opportunity to speak here today on behalf of Ohio steelworkers producing cold-rolled steel, corrosion-resistant steel, and hot-rolled steel.  

Your ongoing investigations are of critical importance to Ohio and to the American economy because the American steel industry is facing a crisis. We produce the best steel in the world, with the most productive workforce, and yet, last year, more than 12,000 steelworkers around the country were laid off. Nearly 1,500 of those were in Ohio.

These layoffs are devastating on the families of these hardworking steelworkers and the communities where they live.  Take, for example, the community of Lorain, Ohio.  Lorain is home to both Republic and U.S. Steel.  In the last year, the companies have been forced to lay off about 1,200 steelworkers in Lorain.  Brian Sealy, a former employee at Republic who now works for the USW calls this the “darkest” period that Lorain has ever seen.  He points out that the effects of the layoffs are felt beyond the workers themselves.  “You’re going to have 1,200 people out of work.  That’s devastation for the community . . . .  It’s going to affect the busing system on down the line because people aren’t going to be going anywhere.”   

It’s hard enough for working class families today experiencing the “middle class squeeze.” They can’t afford these unfair job losses at a time when wages are stagnating or even declining and the cost of living, including healthcare expenses, is going up.

The major reason layoffs are happening is because the U.S. market is being flooded with unfair imports. Take, for example, just the steel at issue in these three cases: from 2013 to 2015, U.S. imports of cold rolled steel increased by more than 110 percent, imports of hot-rolled steel doubled, and imports of corrosion-resistant steel increased by 75 percent. That was just in two years.

And these increases continue. Last year, China exported a record-high 112 million tons of steel. This year, despite China's assurances that production would be cut, its biggest listed steelmaker plans to increase output by 20 percent.

I am confident that when you review the record in each of these cases, you will find that domestic producers have suffered material injury by reason of unfair trade.  Unfairly-traded imports not only prevented domestic producers from taking full advantage of stronger demand conditions in 2014, but contributed to a dramatic decline in prices in 2015.  The results have been disastrous.  Last year, for example, U.S. producers of cold-rolled steel suffered a net loss of $162.4 million.  U.S. producers of corrosion-resistant steel suffered a net loss of $77.6 million.

Rather than repeat the good arguments made by petitioners about why there is material injury in these particular cases, however, I would like to talk about the role of this Commission in U.S. trade policy, and to explain why those of us in Congress recently clarified and improved the material injury standard that you will be applying in all three of these steel cases.

In the world of trade litigation, justice delayed is justice denied. Trade relief can be effective, and we are already seeing signs that following the Commerce Department’s preliminary determination the cases before you are making a difference for U.S. mills. But trade relief cannot bring back the profits that were already lost due to unfair trade. It cannot bring back the income workers lose when they are laid off, or the costs companies must pay when idling a plant. It cannot make up for the investments companies are unable to make, or the products they cannot develop, while waiting for relief to occur. And often trade relief cannot bring back the jobs that are lost.

Last October, Blake Arnott from Bidwell, Ohio wrote to me worrying about potential layoffs at the AK Steel plant across the river in Ashland, Kentucky.  Unfortunately, his concerns turned out to be well-founded.  In December, 620 workers were laid off.  Around the same time, I received a letter from Jeff Massie from Kitts Hill, Ohio, who also worked at the AK Steel Ashland facility.  While Jeff has been fortunate enough to keep his job for the time being, he says he goes to work every day wondering if he will have a job at the end of it. He wondered how the government could sit back and watch as illegal dumping destroyed an entire industry – an entire community.  And his concerns aren’t unfounded: in Jeff’s neighborhood alone, five people have already lost their homes as a result of the steel crisis.  These stories show why it is critical that when unfairly-traded imports are hurting a domestic industry, our producers must be able to obtain relief quickly.  
 
For this reason, U.S. law has long defined “material injury” as “harm which is not inconsequential, immaterial, or unimportant.”  That’s it.  That’s all that a domestic industry has to show.  If an industry has suffered harm which is not inconsequential, immaterial, or unimportant – or if it is threatened with such harm – and this harm (or threat of harm) is by reason of imports, then the industry is entitled to relief.

In recent years, however, many of my colleagues and I have heard from our constituents – including constituents in the steel industry – that they hesitated to use the trade laws until they were severely injured.  Some worried about bringing trade cases during a period of rising demand. This hesitancy only allows for material injury to continue, and undermines the effectiveness of our trade laws.
 
That’s why last year, as part of the Trade Preferences Extension Act of 2015, Congress acted to clarify the material injury standard by passing the Leveling the Playing Field Act.  I, along with Senator Sherrod Brown, led this effort, and worked with our colleagues to pass this measure on the Senate floor and get it to the President for his signature.  Our Leveling the Playing Field Act was meant to help ensure that domestic producers can get relief faster: they don’t have to wait until plants are shuttered and workers are laid off to get relief. 

I now urge the Commission to pay close attention to two provisions in that statute.  First, we made clear that the Commission may not determine that there is no material injury or threat of material injury to a domestic industry merely because that industry is profitable or because the performance of that industry has recently improved.  There may be many cases – particularly in periods of strong demand – where a domestic industry remains somewhat profitable, even though its profitability is diminished by the harmful impact of unfair trade.  This new provision makes clear what was, in my view, already present in the law: that domestic producers do not have to wait until they are losing money and jobs and market share to seek, and obtain, trade relief.

We also made clear that the Commission should consider a broad set of economic data that reflects the real-life performance of the domestic industry, such as the industry’s net profits, its ability to service debt, and its investment in new technologies and R&D.  Sometimes unfair trade may drive down an industry’s operating income.  In other cases, the industry’s operating income may remain stable, while other aspects of its performance, such as its net income or its ability to pay its debt, may suffer.  The intent of Congress was that the Commission should be sensitive to the effects of unfair trade wherever they are found. 

I know this Commission to be a diligent and thoughtful body that has been given a great responsibility by Congress: the responsibility to enforce our AD and CVD laws in a manner that will lead to better and fairer market competition.  In fulfilling that responsibility, I urge you to pay close attention to our recent clarification of the injury standard, and to ensure that our laws are strictly enforced. Otherwise, we risk encouraging further market-distorting practices by foreign competitors.

Madam Chairman, our steelworkers are producing the highest quality product anywhere, more efficiently than ever.  And they have worked with management and made concessions to be competitive. They are doing their part; we must do our part and protect them from the unfair and dishonest foreign competition that threatens their livelihoods and communities all across Ohio. I’ve been to these steel mills and have met with the steelworkers whose jobs are affected.  If you give them a level playing field, they will be just fine.  So I urge the Commission today to use the tools that we gave you in the Leveling the Playing Field Act and recognize that material injury has in fact been suffered by the petitioners in these three cases.  Thank you.

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