Countries plagued by excessive Chinese imports arrive at consensus

June 2016 - Steel associations in the United States have been working with allies across multiple regions to combat the culprits behind market distortion—unfair and illegal trade activities.

American Iron and Steel Institute (AISI) President and CEO Thomas J. Gibson (pictured) spoke with Modern Metals during the recemt annual Steel Success Strategies meeting in New York City. SSS sponsors are American Metal Market and World Steel Dynamics, a consultancy. 

“The U.S steel industry associations have been working more closely and have been more attuned with other countries’ steel trade groups,” says Gibson. 

On May 24, AISI was joined by the Steel Manufacturers Association, Japan Iron and Steel Federation, Eurofer, Canadian Steel Producers Association, UK Steel, the German Steel Federation, Alliance des Minerais, Minéraux et Métaux (France), Federacciai (Italy), Committee on Pipe and Tube Imports, Specialty Steel Industry of North America and European Steel Tube Association in releasing a statement urging leaders of the G7 nations to take steps to address the current global steel overcapacity situation, which they agree is negatively affecting economies, industries and workers around the world.

“We have come to accord [and] have issued joint statements about the deleterious effects of global overproduction, especially China’s; and China’s willingness to export steel in massive amounts and, of course, without obeying trade laws spelled out under WTO [World Trade Organization] membership,” Gibson says.

The fact that Japan’s and Korea’s steel industries have joined this effort to determine the problems and causes of steel production overcapacity is revealing, he says. 

“We always had that [connection] within NAFTA [North American Free Trade Agreement] but now it's with Eurofer and others, including Alacero [representing the Latin American steel industry],” he continues.

Chinese steel authorities have claimed domestic producers had already idled 90 million tons of a promised 100 million tons of excess steel production capacity, “but then you hear announcements from companies about capacity expansions, so if they really curtailed 90 million tons, but added 150 million tons, what does that get you?” Gibson wonders.

Domestic policy

As 2016 winds down, the U.S. steel industry “is witnessing the end of an administration and it is probable the administration will want to finish up its agenda to realize policy objectives. One example would be carbon rules,” says Gibson, referring to EPA rulemaking on the emission of greenhouse gases. “There is a challenge that is going to hit the [Washington] D.C. Circuit Court and will be heard in September.” 

No matter what the Circuit Court decides in the challenge, Gibson continues, the lawsuit will probably move to the U.S. Supreme Court but with an eight-justice court deadlocked at 4-4, “whatever the D.C. Court rules will probably stand.”

The Occupational Safety and Health Administration is more likely to push some last-minute rule making, he suggests.

On the legislative side, AISI is strongly gratified by passage of the ENFORCE Act, signed into law late last year. It gives U.S. agencies more power to implement trade remedies already on the books. “Customs and Border Patrol has really stepped up enforcement of steel trade law and has reached out to us about implementation of the law,” Gibson says.

Campaigning

AISI members are pleased that trade “has been part of the national conversation during the primary season. It’s helpful to our advocacy to have that be front and center, as some of the primary states were deeply impacted by plant closures and layoffs,” Gibson says. 

In talking with incumbents seeking reelection and other candidates vying for national office during the state primaries, AISI “stressed the numbers: the number of American workers laid off, the size of the Chinese industry and the amount of Chinese imports. Now we have to make sure, in the general election, that both presidential candidates and party apparatus are aware of the issues and are responsive to the industry’s and workers’ concerns.”

During the Congressional recess that begins in July, AISI will provide materials to members to bring to their elected representatives, and members will invite candidates to participate in events back in their home states. “Our industry has to remain visible at a high level,” Gibson says. MM