[Senate Hearing 115-576]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 115-576
 
                 TRADE ENFORCEMENT AND INFRASTRUCTURE:
                 SAFEGUARDING OUR INDUSTRIAL BASE FROM
                     PRESENT AND FUTURE CHALLENGES

=======================================================================

                                HEARING

                               before the

       SUBCOMMITTEE ON INTERNATIONAL TRADE, CUSTOMS, AND GLOBAL 
                            COMPETITIVENESS

                                 of the

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              (MONACA, PA)

                               __________

                           FEBRUARY 16, 2018

                               __________
                               
                               
                               
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                               

                                     
                                     

            Printed for the use of the Committee on Finance
            
            
            
                          _________

               U.S. GOVERNMENT PUBLISHING OFFICE
                   
35-941 PDF             WASHINGTON : 2019                  
            
            


                          COMMITTEE ON FINANCE

                     ORRIN G. HATCH, Utah, Chairman

CHUCK GRASSLEY, Iowa                 RON WYDEN, Oregon
MIKE CRAPO, Idaho                    DEBBIE STABENOW, Michigan
PAT ROBERTS, Kansas                  MARIA CANTWELL, Washington
MICHAEL B. ENZI, Wyoming             BILL NELSON, Florida
JOHN CORNYN, Texas                   ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota             THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina         BENJAMIN L. CARDIN, Maryland
JOHNNY ISAKSON, Georgia              SHERROD BROWN, Ohio
ROB PORTMAN, Ohio                    MICHAEL F. BENNET, Colorado
PATRICK J. TOOMEY, Pennsylvania      ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada                  MARK R. WARNER, Virginia
TIM SCOTT, South Carolina            CLAIRE McCASKILL, Missouri
BILL CASSIDY, Louisiana              SHELDON WHITEHOUSE, Rhode Island

                     A. Jay Khosla, Staff Director

              Joshua Sheinkman, Democratic Staff Director

                                 ______

                 Subcommittee on International Trade, 
                  Customs, and Global Competitiveness

                      JOHN CORNYN, Texas, Chairman

CHUCK GRASSLEY, Iowa                 ROBERT P. CASEY, Jr., Pennsylvania
PAT ROBERTS, Kansas                  DEBBIE STABENOW, Michigan
JOHNNY ISAKSON, Georgia              BILL NELSON, Florida
JOHN THUNE, South Dakota             CLAIRE McCASKILL, Missouri
DEAN HELLER, Nevada                  BENJAMIN L. CARDIN, Maryland

                                  (ii)


                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Casey, Hon. Robert P., Jr., a U.S. Senator from Pennsylvania.....     1
Wyden, Hon. Ron, a U.S. Senator from Oregon......................     4

                               WITNESSES

Paul, Scott N., president, Alliance for American Manufacturing, 
  Washington, DC.................................................     6
Galiano, Rick, president, Beaver Lawrence County Central Labor 
  Council, New Castle, PA........................................     9
Mitchell, Petra B., president and CEO, Catalyst Connection, 
  Pittsburgh, PA.................................................    11
Young, Todd, managing director, government affairs, United States 
  Steel Corporation, Pittsburgh, PA..............................    12

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Casey, Hon. Robert P., Jr.:
    Opening statement............................................     1
    Prepared statement...........................................    25
Galiano, Rick:
    Testimony....................................................     9
    Prepared statement...........................................    26
Mitchell, Petra B.:
    Testimony....................................................    11
    Prepared statement...........................................    28
Paul, Scott N.:
    Testimony....................................................     6
    Prepared statement...........................................    31
Wyden, Hon. Ron:
    Opening statement............................................     4
Young, Todd:
    Testimony....................................................    12
    Prepared statement...........................................    37

                                 (iii)


                         TRADE ENFORCEMENT AND

                      INFRASTRUCTURE: SAFEGUARDING

                    OUR INDUSTRIAL BASE FROM PRESENT

                         AND FUTURE CHALLENGES

                              ----------                              


                       FRIDAY, FEBRUARY 16, 2018

                           U.S. Senate,    
           Subcommittee on International Trade,    
               Customs, and Global Competitiveness,
                                      Committee on Finance,
                                                        Monaca, PA.
    The subcommittee was convened, pursuant to notice, at 9:53 
a.m., at the Learning Resource Center, Conference Room 103, 
Community College of Beaver County, Monaca, PA, Hon. Robert P. 
Casey, Jr. presiding.
    Present: Senator Wyden.
    Also present: Senator Casey's staff from Pittsburgh: 
Elizabeth Fishback, Regional Director; Jim Ferruchie, Regional 
Representative; Jordan Ball, Regional Representative; Jacklin 
Rhoads, Press Secretary; and Nico Starr, Special Assistant to 
the Senator. Senator Casey's staff from DC: Livia Shmavomian, 
Legislative Assistant; and Andrew Usyk, Legislative Assistant. 
Finance Committee staff: Jayme White, Chief Advisor for 
International Competitiveness and Innovation; Elissa Alben, 
Senior Trade and Competitiveness Counsel; Jewel Harper, Senior 
Deputy Clerk; and Susanna Segal, Deputy Clerk.

        OPENING STATEMENT OF HON. ROBERT P. CASEY, JR., 
                A U.S. SENATOR FROM PENNSYLVANIA

    Senator Casey. This hearing will come to order. This is the 
Subcommittee on International Trade, Customs, and Global 
Competitiveness of the United States Senate Committee on 
Finance. We are grateful that everyone is here. We are sorry 
that we are a few minutes late.
    I am privileged to be joined by Senator Wyden from Oregon. 
He is the top Democrat, what they call in Washington the 
ranking member, of the Committee on Finance.
    And we are late for a good reason. We just had a phone call 
that both of us will talk a little bit about.
    But I want to make sure that we first and foremost thank 
the Community College of Beaver County. Dr. Reber, we are 
grateful you are with us today, and grateful to have the 
benefit of the report that you gave me about the work, the 
tremendous work, being done here on a whole range of workforce 
issues and preparing for the future of Beaver County and 
southwestern Pennsylvania.
    We don't have time to get too far into that today, but I 
think a lot of what we are talking about today on trade and 
especially infrastructure has relevance to those discussions 
about our workforce.
    So, Doctor, thank you for having us here. We are grateful.
    I want to thank our witnesses, whom I will be introducing 
in a moment before we get into their testimony.
    We are here today to discuss what I view and what I think 
most Americans view as two of the most critical issues that 
relate to the competitiveness of our Nation--manufacturing and 
infrastructure--which have, of course, a substantial impact on 
jobs and wages.
    I am honored to be joined by Senator Wyden, who came from 
Washington to be with us, but, as you know, he represents the 
State of Oregon and has worked for years on all these issues: 
trade issues, economics and jobs issues, manufacturing, 
infrastructure, and the like.
    We know that steel overcapacity, as well as trade cheating 
and China's efforts to literally steal our future by stealing 
our companies, are some of the most fundamental trade 
challenges of our time because they directly impact 
Pennsylvania jobs and wages. I have said for years and I will 
say it again: when China cheats, Pennsylvania loses jobs. It is 
that simple. So we have to face that reality when we are 
confronting these issues.
    China is going after America's competitive advantage by any 
means necessary. If China can't buy it or if China can't run it 
out of business, they usually steal it. Unfortunately, that is 
a harsh reality.
    So you don't need to look far in our State to find 
companies and unions that have been hacked by the Chinese 
Government. Just talk to U.S. Steel, talk to Steelworkers, talk 
to other institutions in southwestern Pennsylvania that have 
been victims of these actions.
    I went to the White House this past Tuesday to meet with 
the President in a bipartisan, bicameral group--both Houses of 
Congress, Senators and House members of both parties, including 
Senator Wyden, who was with us at that meeting--to discuss 
steel and aluminum principally, but to talk more generally 
about a number of these issues. At that meeting, I told the 
President how Pennsylvania companies have been hammered, and I 
use that verb purposefully, hammered by a surge in imports 
since the Commerce Department announced its section 232 
investigation last April, which was focused on rising steel and 
aluminum imports and how they represent a threat to our 
national security.
    I also heard from Senators telling the President to 
exercise caution. That is what a number of Republican Senators 
and House members were telling him. I have a different view, 
which we will get into later.
    When the Commerce Department launched this investigation in 
April of last year, I along with steelworkers across 
Pennsylvania were hopeful that the Commerce Department would 
quickly complete their study and the President would take 
decisive action. And then we waited, and we waited, and we 
waited. Through the spring and the summer, rumors were 
swirling, but still, steel imports were surging.
    The Commerce Department seemed ready to transmit the report 
by the end of the summer, and then the President told The Wall 
Street Journal in July that he did not intend to move forward 
on a final determination on the steel section 232 case until 
``everything finished up between health care and taxes and 
maybe even infrastructure.'' So said the President at that 
time.
    Meanwhile, we watched imports rise for the first 11 months 
of 2017. Total steel and finished steel imports were up 17.5 
percent and 14.6 percent, respectively, from the same period in 
2016. So total steel basically up 18 percent, imports up, and 
finished steel imports up basically 15 percent in that time 
period.
    Imports of electrical steel, which many of you know is the 
steel used to ensure that we have an electricity grid--which is 
another infrastructure issue that we are going to be dealing 
with--imports of that kind of steel, electrical steel, have 
more than doubled from 2016 to 2017.
    Pipe and tube surged 82 percent from 2016 to 2017. So 
electrical steel up 100 percent, and pipe and tube up 82 
percent.
    The Commerce Department had 270 days to transmit the report 
to the President. They submitted it just shy of that by a few 
days. The President now has 90 days--actually, now it is 60, 
because it was almost a month ago, so, basically, 60 days to 
make a determination.
    Now, when you have these meetings, you do not have 25 
minutes to make your point. You have to make it in about 2 
minutes. So my point was to raise the issue with the President 
on 232, because the discussion started to meander off into 
other issues, and I wanted to keep it focused on these issues. 
I made two basic points to the President. One was that number 
on electrical steel, to remind him about that, and two, to ask 
him to make a determination not using the whole 90 days. I 
wanted him to bring a sense of urgency to this issue right now. 
And he listened, listened to our pleas, and I hope will make a 
decision.
    So why were we a few minutes late? Well, Senator Wyden just 
got a call from Commerce Secretary Wilbur Ross. They obviously 
talk on a regular basis, but I thought it was particularly 
opportune that this hearing was supposed to start at 9:45, and, 
all of a sudden, we got a call at 9:40 from the Commerce 
Secretary about this issue. Senator Wyden can tell us more. But 
apparently, there is going to be a press conference or a press 
call at 10:30, which is good news. That means that, somehow, 
between the meeting the other day and today's hearing, we have 
gotten some people's attention. I will leave it at that for 
now.
    Let me go back to China and then wrap up.
    I said earlier we cannot allow China to steal our future. 
That is not drama and hyperbole. That is the truth. If we allow 
them to continue on the pathway they have been on, they will 
steal our future. Actions matter, and the actions we take today 
must be directed at long-term outcomes we want for our children 
and our grandchildren. This means an economy that creates 
opportunities for all Americans and a system that creates a 
fair environment for our workers to find jobs that pay family-
sustaining wages.
    This also means investing in our roads and bridges, 
schools, locks and dams, which are so important to commerce 
here in southwestern Pennsylvania, and, of course, our 
electricity grid. And I did not mention broadband, and we could 
go down a longer list. You get it. Infrastructure matters. It 
is about our security. It is about our safety. And it is about 
our jobs.
    So this means putting real Federal dollars behind 
infrastructure that is fundamental to our combined 
competitiveness. I am never opposed to public-private 
partnerships or other ideas to finance infrastructure, but we 
have to have significant Federal dollars. I believe you can do 
infrastructure one of two ways. You can do it the corporate 
way, which is not the way to do it, or you can do it the 
American way.
    I want an American infrastructure bill. It means we are all 
in this together. We are all one American family. We ought to 
put public dollars in, and big dollars, to really make a 
difference and create jobs. So this means making sure that the 
inputs to that infrastructure are made in America.
    I think both parties agree on that, and I am grateful that 
Senator Wyden is here today to make these points and to discuss 
these critical matters for the economy of Pennsylvania and jobs 
in Pennsylvania, as well as American jobs and American 
competitiveness.
    So I am happy to turn the microphone over to Senator Ron 
Wyden, the ranking member of the Committee on Finance. And I 
hope--this is just my hope; I am not allowed to say more than 
this--I hope a year from now, he will be the chairman of the 
most important committee in the United States Senate when it 
comes to our economy.
    [The prepared statement of Senator Casey appears in the 
appendix.]
    Senator Casey. Senator Wyden?

             OPENING STATEMENT OF HON. RON WYDEN, 
                   A U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Senator Casey. I do not want to 
make this a bouquet-tossing contest, but I want to note that 
Senator Casey's hearing could not be more timely. Sometimes in 
the Congress you hear about a hearing on such and such subject, 
and everybody says, well, we will come back in a couple years 
and see if anything is going on. With respect to Senator 
Casey's hearing, we just heard from Secretary Ross indicating 
that here in maybe 20 minutes or so the country is finally 
going to be told what are going to be the options to protect 
American jobs, protect American industries. And particularly in 
our case--and I heard Senator Casey talk about this at the 
White House--is the need to try to make sure that we actually 
use all the tools to keep foreign companies from making an end-
run around our trade laws.
    And what we have done over the years--and Senator Casey and 
I have been a team, with several colleagues--is we have put in 
place a variety of new tools to deal with how these countries 
rip us off with, for example, dumping practices and subsidy 
practices and the like.
    But as Senator Casey noted at the White House, these tools 
haven't always been used. And to sum it up, what we want is 
trade done right, and that means using all the tools and using 
them in a timely way.
    Now, as Senator Casey mentioned, if you look at this past 
year, what you have to say is, by some measures, steelworkers 
are actually worse off than they were a year ago, because there 
was a lot of tough talk early on that led to a surge in steel 
imports, and so a lot of struggling steel communities were 
wondering what was next.
    I think what we learned in this call this morning from the 
Secretary, from Secretary Ross, is, as a result of this kind of 
effort, and with Senators like Bob Casey weighing in as they 
have, this administration is finally realizing they had better 
act sooner rather than later. That is how I would sum it up.
    And here in 20 minutes, we will get an inkling of what the 
major recommendations are with respect to both steel and 
aluminum. Of course, the President has legal authority to set 
all of them aside. He does not have to do any of them. But we 
will finally get this long-overdue report that we wanted, in 
some sense. A number of us said at the White House that, to 
make thoughtful recommendations about matters like the 232 law, 
you have to have the report. We have been pulling and prying 
and pushing to get it out, and now, finally, it is getting out.
    One last point, and then, like Senator Casey, I want to 
hear from all of you.
    When I talk about using all the tools in the toolbox, you 
cannot afford, in a time like this, to pass up opportunities. I 
will close with a point with respect to infrastructure. We all 
understand that for big-league economic growth, you cannot have 
little-league infrastructure. So when the infrastructure plan 
came out this week, I just kind of rushed through it to see 
what was going to be in it to talk about using more American 
steel and more American goods and services. There is 
essentially nothing there, no mention of Buy America, vital to 
American steel.
    By the way, the plan actually gives the States the ability 
to walk back current law with respect to using American steel 
and American products.
    So Senator Casey and I feel really strongly that in this 
battle to deal with global competition, we feel we can beat the 
pants off everybody as long as our government uses the tools 
that it has at its disposal.
    So we are anxious to hear from all of you. One of the few 
benefits of seniority is you can give all the difficult 
questions to Senator Casey and anything easy to me.
    It is nice to be here. Thank you for inviting me, Senator 
Casey.
    Senator Casey. Senator Wyden, thanks very much. We are 
grateful you are here. We have lots to talk about.
    Let me introduce our witnesses, who have been in their 
seats for a good while. So I will do a brief introduction, but 
I don't want to skip over it. Many of you know these witnesses 
already, either personally or by way of their work.
    Scott Paul is president of the Alliance for American 
Manufacturing, which is a partnership established in 2007--I 
can't believe it is that long now--by some of America's leading 
manufacturers and the United Steelworkers Union. Scott 
currently serves as the board chair of the National Skills 
Coalition and is on the board of visitors of the Political 
Science Department at Penn State, his alma mater. Scott also 
has an M.A. in security studies from Georgetown University 
School of Foreign Service.
    Scott, welcome.
    I will do all our introductions, and then we will go to the 
testimony after that.
    Petra Mitchell, in the third chair, obviously, is president 
and CEO of Catalyst Connection, a private, nonprofit economic 
development organization dedicated to helping manufacturers 
grow their businesses and create new jobs. She currently serves 
on the board of directors of the Advanced Robotics and 
Manufacturing Institute, Leadership Pittsburgh, and 
Pennsylvania Industrial Resource Center Network, the so-called 
IRC Network. Petra received numerous honors for her leadership, 
including being named one of the 2016 most-admired CEOs in 
Pittsburgh by the Pittsburgh Business Times.
    I have known Petra for years. Petra, thank you for being 
here with us.
    Rick Galiano is the president of the Beaver Lawrence County 
Central Labor Council and a representative for the United 
Steelworkers. Before his career in the Steelworkers Union, Rick 
worked at the TMK IPSCO Koppel steel facility. He is a graduate 
of Lawrence County Vo-Tech School in New Castle in Lawrence 
County.
    Rick sits on the Lawrence County United Way board and is a 
member of the Lawrence County Drug and Alcohol Commission. He 
lives with his wife of 40 years, Maryann, in New Castle.
    Rick, thank you for being with us, and thanks for all that 
work you do on a lot of issues.
    Todd Young serves as the managing director of government 
affairs for the United States Steel Corporation, reporting to 
the president and chief executive officer, David Burritt. Todd 
manages U.S. Steel's Federal, State, and local government 
affairs.
    Todd, thank you.
    Scott, why don't we start with you? And we will try, if you 
can, to keep it to 5 minutes, because we want to get to as many 
questions as possible.

 STATEMENT OF SCOTT N. PAUL, PRESIDENT, ALLIANCE FOR AMERICAN 
                 MANUFACTURING, WASHINGTON, DC

    Mr. Paul. Certainly, Senator Casey. Thank you so much for 
hosting this hearing in western Pennsylvania, which, in many 
ways, was America's foundry for so many generations. And, 
Senator Wyden, thank you for venturing here as well. I want to 
commend both of you for your leadership, your work on 
manufacturing, trade, and infrastructure issues.
    I especially want to commend the role that you played just 
earlier this week at the White House. I thought that the 
feedback that you delivered to the President obviously was 
heard. I know that Senator Wyden said, ``Let's see these 
reports,'' and, 3 days later, we had them.
    And, Senator Casey, you mentioned, as you said in your 
opening statement, what the consequences of this delay have 
been, which are very real. In addition to the imports that we 
have seen increase, it is stunning that at a time when you have 
seen modestly positive economic growth, overall the steel 
industry is struggling. That does not make any sense. And you 
can only draw a correlation to the rise in imports, which you 
can clearly attribute to companies and countries trying to game 
the system and get in before any relief is provided.
    So I will be eagerly awaiting the recommendations of those 
reports as well. But I want to commend both of you on your 
leadership. And I hate to refer people to Twitter a lot, but I 
thought, Senator Casey, you had some especially poignant 
thoughts after the meeting at the White House about what the 
impact of this has been for Pennsylvania that are worth 
pointing out to the audience.
    I want to say that trade has traditionally been a very 
bipartisan issue that impacts red States, blue States, every 
State. And in that vein, I was excited to serve on the 
President's manufacturing jobs initiative. I had hoped, at the 
beginning of it, that there would be a robust role on it for 
trade. That did not occur. Instead, we were not able to 
accomplish much of anything.
    I was also--as I think a number of us from industrial 
States were--hopeful based on some of the President's rhetoric 
with respect to trade enforcement and very specific commitments 
that he made, that we would see a substantial amount of 
progress. The way I would characterize it to this point is, we 
have seen a lot of trains that have left the station, but none 
of them has arrived, and a couple of them have been derailed. 
We need to get them on track for America, and for American 
workers in particular.
    I have a lot of content in my written remarks, and I won't 
bother repeating that, but I just wanted to focus on a couple 
principles in the time that I have. I think you both recognize 
that, for too long, trade enforcement has been viewed as an 
appendage of our trade policy rather than a core of it, and 
that has had extraordinary consequences.
    We have seen a rising trade deficit with China that reached 
a record $375 billion in goods last year. You have seen 
countries that feel like they have a blank check to dump, to 
subsidize, to engage in market-distorting practices, 
intellectual property theft. And while you have seen 
enforcement in past administrations, it is hard to make the 
argument that it was central to their trade strategy. 
Oftentimes, it was designed to deliver votes on something else 
or, in the case of Reagan, Congress wanted to take much 
stronger action than he did. George Bush saw a political 
opportunity in West Virginia by offering some relief for steel. 
But you haven't seen it at the core of an administration's 
trade policy.
    I think you understand that, and that is something that we 
encourage this administration to pursue as well. And I am going 
to return to that in a second, because there certainly has been 
a real disconnect and a real division in our country on 
economic lines, on what is happening with respect to 
manufacturing, on the outlook for trade, that I think has been 
colored by this fact that trade enforcement has not been a 
central part of America's economic philosophy for a very long 
time.
    Second, I want to expand on this idea that the President's 
promises and the lack of follow-through so far have had some 
real consequences, because I think they have.
    You pointed out, Senator Casey, the 232 announcements, the 
rhetoric, and then the lack of follow-through that has occurred 
so far. And you have seen in Conshohocken some layoffs 
announced, in Steelton at Dura-Bond. We have seen a steel mill 
in Kentucky that has closed down. You have seen challenges in 
the aluminum industry as well.
    To add to your data on surging imports, in oil country, 
tubular goods, which are a specific high-margin product for the 
steel industry, one that is very essential to the energy 
infrastructure, you have seen a 200-percent increase in imports 
just from 2016 to 2017.
    Just yesterday, at a major energy project in Texas, the 
Gulf Coast Express Pipeline Project, the funders of that 
project announced that more than half of the pipe would be 
coming from Turkey as opposed to American producers. And we 
know that Turkish steel is often dumped and subsidized. So this 
raises, to me, real questions about another commitment that the 
President made, and that was that we would have American-made 
pipelines.
    There was a memorandum signed with great fanfare a year ago 
at the White House, and there has been no palpable follow-
through that I have seen with respect to that.
    I also want to say that I commend the role that both of you 
have played in trade enforcement and the improvements that we 
have seen in the law in the last couple years. They have had 
real, tangible, and helpful impacts that I am happy to expand 
upon in Q&A, if we should arrive at that, but they have made a 
real difference for American industry and for American workers.
    I will say a word about infrastructure, and then I will 
close with a thought back on trade expansion.
    So all of the trade actions in the world will not make a 
difference if we do not have a robust public investment to 
increase demand in this country. We have fallen behind. It 
obviously has an impact for commuters. It has serious impacts 
for manufacturing with respect to logistics, competitiveness 
when it comes to global trade, and for attracting both talent 
and moving materials and people back and forth.
    And by infrastructure, I speak very broadly, I think like 
you do, that we need everything from our broadband, our energy 
grid, to our bridges, our roads--we need a serious upgrade.
    I share your belief that this has to be public investment. 
We are not opposed to public-private partnerships. We also see 
the strong benefits of ensuring that it is made with American-
made iron and steel. That is how we built the most magnificent 
achievements in our country, and there is really no reason to 
think that we cannot do it now other than some vague, 
philosophical objections and maybe perhaps some envy that other 
nations may have.
    I want to end on a very wonky note, but one that I think 
resonates today, and that goes back to the underlying 
legislation of section 232, which no one I think had focused on 
a lot before the President said he was going to take this 
action. It was part of the Trade Expansion Act of 1962, which 
was perhaps the biggest legislative achievement of that 
Congress, pushed by President Kennedy.
    It is notable that, at the signing ceremony of the act, 
George Meany, the president of the AFL-CIO, was there 
supporting a bill that dramatically cut tariffs on products, 
gave the President broad authority to do that. But embedded in 
that legislation were a number of trade enforcement tools, 
including section 232.
    The fact that over the years you have seen that trade 
expansion and tariff authority take off and you have seen free-
trade agreements, where you have seen the real sporadic 
enforcement of trade laws like through section 232, speaks to 
kind of the situation we are in where our politics have become 
more radicalized, our communities have become less hopeful. In 
a way, there is an eroded sense of trust in the government's 
ability to respond to problems. And part of it is precisely 
because we have not exercised these trade enforcement tools.
    I think that needs to be a central part of our trade agenda 
as we move forward.
    I want to commend the role that, Senator Wyden, you have 
played in the past, and Senator Casey as well, both with the 
ENFORCE Act and the Leveling the Playing Field Act. I look 
forward to working with you in the future on that.
    Thanks so much.
    [The prepared statement of Mr. Paul appears in the 
appendix.]
    Senator Casey. Scott, thanks so much for your testimony and 
for that perspective from history as well.
    Rick Galiano.

 STATEMENT OF RICK GALIANO, PRESIDENT, BEAVER LAWRENCE COUNTY 
             CENTRAL LABOR COUNCIL, NEW CASTLE, PA

    Mr. Galiano. Good morning. Mr. Chairman, members of the 
caucus, it is an honor for me to speak at this field hearing on 
the trade enforcement infrastructure.
    My testimony to you is straightforward. I try to do 
everything in my power to improve the livelihood of our union 
brothers and sisters, our communities, and our country. I would 
like Congress and the administration to also do the same.
    My concern is that the tools our country has to defend its 
manufacturing base and move it further into the new era need to 
be improved, but much more must be done. Since Congress passed 
the Leveling the Playing Field Act and the ENFORCE Act, a slew 
of trade enforcement cases followed.
    Our union sees the day-to-day results when a worker gets a 
job back and their hours are increased. I also see the 
potential. We have to do more. Restoring fair play and ensuring 
that we have a fair chance to compete internationally is all we 
ask.
    For example, since USW successfully brought forward trade 
cases on the passenger vehicle and light truck tires from China 
and off-road tires from India, close to $3 billion have been 
invested in U.S. tire plant expansions and factories. Seven 
thousand, two hundred union workers at Goodyear reached a 5-
year agreement with wage improvements and extension of plant 
protection guarantees where no USW plants will close during the 
term of the agreement.
    To the doubters of the value of trade enforcement, I dare 
them to look at those workers in the face and tell them they 
are not worth protecting.
    I wish I could say there is a similarly positive outcome in 
the steel industry as in the tire industry. Since the passage 
of the Leveling the Playing Field Act, 67 new tariffs against 
multiple countries have been put in effect on steel.
    While these trade enforcement acts have slowed the tide of 
the illegal imports, too many of the 19,000 steelworkers who 
have been laid off since 2015 are still waiting for idled and 
underutilized facilities across the country to restart.
    And let's remember, trade cases are simply about addressing 
unfair foreign trade as agreed upon in international rules. We 
were not asking for anything that the law was not designed to 
provide. USW has been cautiously optimistic about the chance 
for unilateral relief through implementation of section 232 
steel and aluminum investigations currently in President 
Trump's hands.
    When President Trump and administration officials pledged 
to unveil the findings of the section 232 investigations by 
July 1st of 2017, we were hopeful at first and left wondering 
the day after. The USW firmly believes that our Nation's 
military and critical infrastructure needs are essential to our 
national security.
    By delaying the 232, the foreign steel industry saw an 
opening. While the U.S. has shipped more steel this year, the 
finished steel import market share was 27 percent for the full 
year of 2017. Total and finished steel imports are up 15.4 
percent and 12.2 percent, respectively.
    The economy has grown, but the U.S. steel industry 
continues to fight because of foreign steel products. Most of 
the growth in our market is going to imports, not to our steel 
mills and our steelworkers.
    Our trade laws need to reflect a more globally connected 
world and the potential for abuse of bad actors. Modern 
steelworkers in this country can make 1.9 tons of steel per 
man-hour. I want our country's trade laws to be more efficient 
and effective.
    You asked me to speak on infrastructure, and no amount of 
trade enforcement will matter if we cannot get our goods from 
coast-to-coast. The Finance Committee has the potential not to 
just upgrade our trade laws but also seek the path to renew our 
Nation's infrastructure.
    It is simple. If I paid half my mortgage payments, I would 
lose my home. Yet this country is paying only half of America's 
infrastructure bill, leaving an investment gap and commuters 
stuck in gridlocked traffic.
    Please think about this. Eighty-eight million citizens in 
urban and rural America lack affordable broadband access. One 
out of 5 miles of highway pavement is in poor condition.
    I do not know all the solutions to these problems, but just 
like every USW member, I am willing to roll up my sleeves and 
fix these problems. We need to ensure that our tax dollars are 
used to maximize the economic benefit and domestic policies, 
like Buy America.
    In closing, I know that with a strong trade enforcement 
strategy combined with a concerted effort to renew our 
infrastructure, we can create a better America.
    Thank you for your time.
    [The prepared statement of Mr. Galiano appears in the 
appendix.]
    Senator Casey. Rick, thanks very much. I was noting that 
one number you had there on, I guess it was page 4. A modern 
steelworker can make 1.9 tons of steel per man-hour. That is a 
good number to remember.
    Petra Mitchell.

  STATEMENT OF PETRA B. MITCHELL, PRESIDENT AND CEO, CATALYST 
                   CONNECTION, PITTSBURGH, PA

    Ms. Mitchell. Good morning. Senator Casey, Senator Wyden, 
welcome to southwestern Pennsylvania, and thank you for having 
me here today.
    This morning, I would like to address our Nation's supply 
chain, which is made up of small and medium-sized manufacturers 
that serve many sectors including our infrastructure, metals, 
advanced materials, DOD, and our national security sectors.
    At Catalyst Connection, we are dedicated to serving these 
companies. We provide technical assistance, management 
consulting, and workforce development, such that, when 
individual companies grow and succeed, collectively they impact 
the region's economy and our Nation's supply chains.
    To enable us to do our work, we are funded, in part, by the 
Manufacturing Extension Partnership, or MEP program, and the 
Industrial Resource Center program here in Pennsylvania, which 
was started by Governor Robert Casey, Senator Casey's father, 
and was a model for the national program. So I feel this was 
very, very insightful on Governor Casey's part to start this 
program.
    I would like to provide you with a brief overview of the 
MEP program and then some of the challenges that our small and 
medium-sized manufacturers are facing, and the role that the 
MEP program and Catalyst Connection are playing in helping to 
address those challenges.
    And, Senator Wyden, I liked your term of using the tools in 
the toolbox. I would like to suggest that MEP is a critical 
tool in that toolbox.
    The MEP program is the only Federal program dedicated to 
serving our country's small manufacturers. These companies make 
up 99 percent of all manufacturing establishments. Last year, 
we served 26,000 companies across the United States. Many of 
these firms are often overlooked by larger for-profit firms 
because the cost of sales can be high, and the typical project 
size is low. The impact of the work, however, is very high.
    The MEP program delivers $8.70 for every dollar of Federal 
funding invested. This is according to the Upjohn Institute. 
MEP clients themselves reported over $12 billion of new and 
retained sales and the creation or retention of over 100,000 
jobs just in the last year. Considering that the average 
manufacturing worker earns over $80,000, MEP centers are 
economic drivers in their communities.
    Fortunately, the MEP program has been reauthorized by 
Congress through the American Innovation and Competitiveness 
Act. Unfortunately, the President's budget once again 
eliminates the program.
    Catalyst Connection clients have contributed to the 
national program results just mentioned. Companies that work 
with us are hiring, growing, and adding jobs, but we need to do 
more. Sadly, manufacturing employment in our region has 
decreased by almost 5 percent in the last 5 years even though 
output and productivity are growing. We believe that a majority 
of the job losses are from larger firms or plant closures at 
some larger firms. But the growth in jobs among small and 
medium-sized manufacturers is just not enough to make up for 
those losses.
    To reverse these trends, companies must accelerate their 
pace of growth greater than any productivity gains they need to 
remain competitive in a global economy. They have to invest in 
new products, automation and robotics, and in their people. And 
this is a big challenge.
    While many companies are growing and interested in hiring, 
the skills gap in manufacturing is another significant 
challenge. According to a Deloitte report, the skills gap may 
result in 2 million manufacturing jobs going unfilled.
    Manufacturing CEOs are looking for help, and the MEP 
program can provide it. Our services and operational 
improvements, business growth and innovation, exporting, and 
training create the foundation for the adoption of new and 
advanced manufacturing technologies, and for upscaling of 
workers.
    So I would urge you to continue your support for policies 
that favor small businesses and for the MEP program, to 
continue to support small and medium-sized manufacturers that 
provide high-paying, family-sustaining jobs.
    And I would just like to share that I am personally the 
beneficiary of one of those jobs where my father worked in 
manufacturing and, even as an immigrant, was able to provide me 
with a very comfortable childhood and a college education. I 
would like to see many more of our friends and neighbors have 
similar experiences. And I feel that, with your support, that 
is definitely achievable.
    Thank you.
    [The prepared statement of Ms. Mitchell appears in the 
appendix.]
    Senator Casey. Petra, thanks very much.
    Todd Young.

STATEMENT OF TODD YOUNG, MANAGING DIRECTOR, GOVERNMENT AFFAIRS, 
        UNITED STATES STEEL CORPORATION, PITTSBURGH, PA

    Mr. Young. Thank you, Senator, for conducting today's 
hearing in western Pennsylvania and for inviting testimony from 
the United States Steel Corporation, which is proudly 
headquartered here in Pittsburgh. Senator Casey, your 
leadership in convening the hearing is very much appreciated, 
because both trade law enforcement and improving America's 
infrastructure are public policy priorities for America's 
steelmakers.
    U.S. Steel was founded in 1901. It is the largest 
integrated steel producer headquartered in the U.S. with 
domestic annual raw steelmaking capability of 17 million net 
tons. Our major domestic steel operations are located in 
Indiana, Michigan, Illinois, and right here in Pennsylvania at 
our Mon Valley Works. Our tubular operations are located in 
Alabama, Ohio, Arkansas, and Texas. And our two Minnesota 
mining operations supply iron ore pellets to all of our steel-
making operations.
    U.S. Steel Corporation manufactures semi-finished steel as 
well as a wide range of value-added flat role and tubular 
products for the automotive, appliance, container, industrial 
machinery, construction, and oil and gas industries. When it 
comes to trade enforcement, over the past several years, 
America's steel companies and workers have been challenged by 
significant, persistent, unfairly traded imports flooding our 
markets from overseas. Steel at dumped prices and subsidized by 
foreign governments targets America's open markets.
    As a result, many American steelmaking facilities, 
including those of U.S. Steel, have been forced to shut down 
temporarily or even permanently, causing thousands of job 
losses.
    American steel companies can compete and win against anyone 
on a level playing field, yet that requires fair enforcement of 
our trade laws and strong, prompt action by the Federal 
Government. We commend Congress on passing the 2015 Leveling 
the Playing Field Act, which significantly strengthened U.S. 
trade remedy law by clarifying the injury standard for the 
International Trade Commission and antidumping and 
countervailing duty, or AD/CVD cases, and providing the 
Commerce Department with the additional tools to address dumped 
and subsidized imports. This was the result of forceful 
bipartisan leadership by steel champions in both the House and 
the Senate.
    Just months later, the Enforce and Protect Act was passed. 
This law provided U.S. Customs with new tools and directives to 
aggressively enforce U.S. trade remedy orders and crack down on 
duty evasion and Customs fraud. It was critical that this 
second law followed as AD/CVD orders only level the playing 
field if they are strictly and effectively enforced.
    Senator Casey and Senator Wyden, thank you for your roles 
in enacting these stronger trade rules.
    U.S. Steel and other domestic producers moved swiftly in 
the summer of 2015 to utilize these new laws by filing a series 
of new AD/CVD petitions on a flood of unfairly traded imports 
of hot-rolled, cold-rolled, and corrosion-resistant steel from 
12 countries. As a result of these cases and due to the new 
laws, 28 new AD/CVD orders were obtained on 11 countries, 
providing U.S. Steel Corporation and American producers with 
critical relief.
    Though these recent flat-rolled duty orders stemmed the 
tide of unfairly traded imports from the targeted countries, an 
all too familiar story unfolded. Low-priced imports surged in 
from other countries.
    For example, imports of cold-rolled and corrosion-resistant 
steel from Vietnam replaced imports from China nearly ton for 
ton. As a result, U.S. producers filed circumvention petitions 
with the Commerce Department in September 2016. Last December, 
the Department issued a preliminary affirmative finding that 
imports of Chinese steel finished in Vietnam should be covered 
by the same AD/CVD orders on imports from China. This decision 
should put other countries and other foreign producers on 
notice that circumvention will no longer be tolerated.
    Another egregious situation is imports of oil country 
tubular goods, or OCTG, particularly from Korea. In 2014, we 
obtained AD/CVD orders on Korean OCTG and, in the years since, 
have obtained higher and higher antidumping rates in each 
administrative review.
    However, dumped OCTG imports from Korea have continued to 
surge into the United States. As was noted earlier, total OCTG 
imports reached a nearly 200-percent increase in 2017 over 
2016. Korea has no domestic use for OCTG products.
    Our Nation must not tolerate these trade tactics to 
continue. We need American-made steel products to harness our 
abundant natural resources so we are truly able to achieve 
American energy security and independence.
    Of particular significance at this moment is the section 
232 investigation that was discussed earlier. I will simply say 
that, if the Senator would like to hold a hearing every day 
between now and April 11th when the 90 days is up, we may get a 
decision much, much sooner.
    From U.S. Steel's perspective, we urge a strong, broad 
action under section 232 on imports that are threatening our 
national and economic security. The threat posed to America's 
steelmaking capacity by the unrelenting and growing barrage of 
imports merits aggressive action by President Trump. An 
effective section 232 remedy must be comprehensive and broad-
based, covering all producing countries and the full range of 
steel products, including semi-finished products, with only 
limited exceptions for products that are not currently 
available from a U.S. maker.
    We are encouraged by Tuesday's meeting at the White House, 
by the advocacy from members of Congress, as well as the 
President's own remarks. We are optimistic that a section 232 
action will come soon.
    On the hearing's second topic, investment in 
infrastructure, this is both a necessity and an opportunity for 
a steelmaker. We depend on an efficient, reliable 
transportation system to move millions of tons of raw materials 
and finished product, and the long-term investment to improve 
infrastructure creates direct demand for steel and fosters 
broad economic growth and job creation, which further drive 
steel demand. As the infrastructure discussion advances, we 
encourage you to focus on three priorities.
    Increased long-term investment is essential to undertaking 
large-scale projects, those that consume steel.
    Project streamlining is also critical. It will responsibly 
condense the permitting process to lower costs and deliver 
projects sooner.
    And as has been discussed, the third priority is 
maintaining the commitment to the longstanding Buy America 
principal that the iron and steel that is purchased with 
taxpayer dollars, the iron and steel that is used to rebuild 
our Nation's infrastructure, should be produced, both melted 
and poured, here in the United States. That is a principle that 
must be maintained as the infrastructure debate continues in 
the United States Congress.
    Senator Casey, thank you again for your leadership in 
convening this hearing and the opportunity to provide 
perspective to the Senate on priorities of fundamental 
importance to U.S. Steel and our country. We stand ready to 
support and assist your important work.
    [The prepared statement of Mr. Young appears in the 
appendix.]
    Senator Casey. Todd, thanks very much.
    I want to thank our panel for their testimony. Now we will 
go to questions. We will just alternate. Senator Wyden and I 
will alternate. He has both seniority and rank over me, so 
there might be a time when he gets two questions. I can't 
control that. I want you to know that up front.
    Let me start with the reality of where we have been the 
last year with regard to the President. The fact that Secretary 
Ross has this press conference, which might be underway now, or 
press call, and the fact that he called Senator Wyden and is 
announcing something today, that is fine. That is positive, I 
guess, when you have the Commerce Secretary engaged, as he has 
been, and I have spent some time talking to him. But we need to 
hear from the President of the United States. I cannot say it 
more plainly than that.
    All of us can talk about it, and he can make reports and 
all that, but the central person here in terms of making this 
determination on 232 as well as other issues is the President 
of the United States. The President has talked a lot about 
taking action, but so far, we have not seen it. What we need is 
action that will lead to concrete, positive results for both 
U.S. companies like U.S. Steel as well as United States 
workers.
    So I guess the first question I have is--I will direct it 
to both Scott and Todd, and anyone else who wants to weigh in--
can you tell us what happened to imports of subsidized steel 
following the passage of the Leveling the Playing Field Act and 
how U.S. industries responded?
    Scott, do you want to start?
    Mr. Paul. Sure, I will briefly.
    Like you, Senator, Todd has seniority over me. He serves on 
our board. So I will leave him to hit cleanup on this.
    But I will just say, with some of the data you have 
articulated already, you saw an otherwise hard-to-explain spike 
in steel imports, especially considering there had been some 
dumping orders in place, and you can only attribute that to 
what I would call gaming the system, where you have raised 
expectations that there will be limitations to market access. 
Importers and countries respond to that by surging the market 
with goods. That relief never came.
    And you have heard various data points here, both very high 
import penetration to the U.S. market, 27 percent; an increase 
overall in steel imports of at least 15 percent; and obviously, 
in some items like OCTG, up to 197 percent.
    In an environment where there should be expansion in hiring 
at local mills, in some cases, you have seen layoffs, as in 
Conshohocken at ArcelorMittal, which makes military-grade 
steel, one of the few producers that does that.
    So it has had real and palpable consequences, and I would 
echo what Todd Young said, which is, we need a decision 
tomorrow on this. We have had 270-some days almost, more than 
that now, of deliberation, and it is time to act.
    Senator Casey. And the gap between the commencement of 
investigations and the final determination by the President, 
the reason why that gap of 270-plus days is important is 
because, in that period, you had this import surge of players 
in the marketplace taking advantage of that time gap. That is 
why the promptness or the urgency is critical.
    Todd, do you have something to add on this?
    Mr. Young. Briefly, I would like to add, as I referenced in 
the testimony, soon after the enactment of the acts--it could 
be measured in weeks and days--the industry launched these 
three new cases on flat-rolled products, successfully pursued 
those with the assistance of the new laws, and relief was 
gained. Twenty sixteen was much better than 2015.
    The challenge, though, is what is often referred to as the 
Whac-A-Mole problem. You address unfair imports from certain 
countries only to now see them enter from another country. In 
2017, as has been noted, almost every statistic shows an 
increase of imports over the prior year. Overall steel imports 
are up 15 percent, 2017 over 2016. There is a growing problem.
    Part of the reason why we were very optimistic about the 
potential of section 232 is, you are dusting off a tool that 
has not been utilized for some time, and, importantly, it 
grants broad authority to the President to take comprehensive 
action to address this problem. Some of these problems, as I 
said, are popping up as a result of a recent case. Some of them 
are intractable challenges that, no matter what tool industry 
has sought to use, it has not stopped the unfair trade.
    That is why we are optimistic that a 232 decision can 
address some of these challenges--instituted broadly and across 
products and countries and for a sufficient time for the 
industry to stabilize, to invest in itself, and to strengthen 
our base here in the United States, so that we can provide not 
only for our national security but our broader economic 
security.
    Senator Casey. Todd, I think it is significant what you 
said just now and also what you said in your testimony. You are 
talking about acts of Congress--the Leveling the Playing Field 
Act and the ENFORCE Act, which Senator Wyden played such a 
leading role in--acts passed by Congress actually having a 
positive impact on this issue. And if we can couple those acts 
and the tools therein with actions by the President, we can 
make real progress.
    I will make two points before I turn it over to Senator 
Wyden. I worry sometimes that the audience who might listen to 
this later might not have a real sense of what we are talking 
about when we say ``232.'' Just so they know, Scott mentioned 
the 1962 legislation President Kennedy signed. Here is the 
basic 232 focus. This review that has been undertaken by the 
administration, announced all those days ago, focuses on one 
thing: whether imports adversely affect, number one, U.S. 
national security, so whether an import from another country, 
an unfair advantage, is adversely impacting our national 
security, that is one, and could result in trade restrictions 
on imports.
    So that is what the President's determination will focus 
on, and I cannot think of a more urgent issue than our own 
national security, as well as our economic security.
    So I am going to turn it over to Senator Wyden.
    Senator Wyden. Senator Casey, I am going to pick up right 
where you left off, because I think now we are going to kind of 
try to wrap up what we think the problems are and then go to 
kind of the remedies.
    In your view, Mr. Young, what as of today are the most 
significant trade violations affecting you as a U.S. 
manufacturer and, obviously, your workers?
    Mr. Young. I discussed several of them in the testimony, 
but to sort of summarize them: one, there is the fundamentally 
unfair imports that are dumped below the cost of production in 
the U.S., which certainly threatens our ability to compete 
fairly. There is also the challenge of foreign governments that 
are subsidizing those products into the United States. Often, 
these are addressed through our antidumping/countervailing duty 
portion of the law.
    When that portion of the law is successfully pursued, then 
we have a question of enforcement. Is it now going to come in 
from another country? Is Chinese steel going to Vietnam and 
then coming into the United States? A recent decision by the 
Commerce Department seeks to address that.
    We also have a situation where there is a question as to 
whether there is simply fraud involved with the payment of 
Customs duties. We have a host of these problems when it comes 
to Korean OCTG in general.
    So I would say there are just fundamental unfair imports, 
and then there is the cheating to get around when our laws put 
a duty in place to protect us.
    It was referenced earlier, we at U.S. Steel have also been 
attacked by a cyberspace attack where we were one of several 
Pittsburgh institutions targeted by the Chinese military for 
our intellectual property. We have spoken about this publicly. 
We cooperated with the Department of Justice here in western 
Pennsylvania when they succeeded in pursuing indictments 
against these Chinese military leaders.
    So we see an array of challenges. Like we said, the 
improvements in the law have helped us fight back against 
those. The challenge is that, oftentimes, they breed new 
attacks and new avenues of unfair trade. The other side is not 
resting in their efforts.
    Senator Wyden. You are so right about the other side not 
resting, and I am going to get into that here in a moment with 
respect to one of the more imaginative ways in which they 
cheat, because, as you know, the gentleman behind me ran a 
sting operation. We set up a dummy website that was designed 
solely to try to catch trade cheats and invite people from 
around the world to essentially be in touch with the dummy 
website, and we were flooded. So we are going to talk about 
that, I think on my second round, in terms of merchandise 
laundering, as we came to describe it.
    But I think what you said--I want to make sure, because it 
highlights Senator Casey's point about how valuable 232 is--is 
that that begins to, again, deal with this end-run through 
relocations and the like. Is that a fair statement?
    Mr. Young. Rather than tackling this on a case-by-case, 
product-by-product, country-by-country basis, section 232 
allows a comprehensive remedy to basically weave together 
solutions to each of those challenges.
    Senator Wyden. Senator Casey?
    Senator Casey. I wanted to focus on the two broad topics we 
are here to discuss today, and I open this up to anyone on the 
panel.
    On the one hand, we are dealing with this issue of 
cheating, which is significant, and obviously, anytime you 
allow a cheater or a cheating strategy to remain in place or to 
be unfettered, you are going to have a bad outcome for the 
country that is the victim of the cheating, and that happens to 
be the U.S. So that is cheating on trade. That is part of what 
we are talking about today. But also, when we under-invest in 
our infrastructure, we are cheating ourselves as a Nation.
    So you have both at work here. Both are pernicious. One is 
imposed upon us by another country or several countries when 
they do dumping and take other actions that are adverse to our 
workers and to our companies. But the other cheating is on us, 
if we don't make the investments we should be making.
    So I wanted to open it up to the panel on both of those 
issues. In particular, maybe I will direct this to Scott.
    One of the tools that we have is Customs and Border 
Protection. How do you feel Customs and Border Protection is 
doing with regard to efforts to identify, prevent, and address 
duty evasion and circumvention, if you can describe what we 
mean by both?
    Mr. Paul. Sure. Thank you for the question, Senator Casey. 
I think it is a great one. And I am glad that Senator Wyden 
mentioned the sting operation, because it really brought to 
light the type of challenges that we have seen. This goes back 
to the point of my testimony, which is that trade enforcement 
has not been at the core of our strategy for a very long time.
    Customs and duty evasion and circumvention occur because 
there is opportunity and because there is lack of enforcement. 
The opportunity is that, even though we are only 5 percent of 
the population, we have an outsized amount of consumption 
compared to the rest of the world, so we are an attractive 
target. And our border protections with respect to fairly 
traded goods are really underfunded, and that has had serious 
consequences for products that range from steel and other 
metals to consumer products. And with digital platforms being 
available to sell this, it is expanding exponentially.
    It is something, again, that I think most average citizens 
probably do not think about, but it has a real and palpable 
impact on the ability of our companies to be competitive. And 
this is where we underperform, to your point.
    Our industries that are in global competition have not 
grown as fast as the rest of our economy for a very long time. 
And it is not because we do not have great workers. You heard 
Rick's testimony, in terms of the efficiency of a steelworker. 
It is not that we do not have amazing entrepreneurs. We clearly 
do. But it is that our public policy has not caught up, and 
some of that starts with those very wonky, specific, and boring 
but essential enforcement mechanisms that have been underfunded 
and underappreciated.
    Senator Casey. Along the lines of wonky, can you describe 
for the audience what you mean by duty evasion and what we 
should do to combat it?
    Mr. Paul. Sure. Duty evasion--I guess there are two types. 
There is a straight-up duty evasion, which is whatever our 
normal tariff schedule is. Then there is duty evasion when it 
comes to, say, dumping orders having been opposed, or 
countervailing duty orders.
    By those I mean--those are essentially extra taxes put on 
specific imports, specific lines of products from specific 
countries that have been found to have been dumped. They 
sometimes range from 5 percent up to 200 percent or 300 
percent. There are lots of different ranges there.
    But there is a boutique market for both mislabeling and 
shielding these types of imports from enforcement. So they are 
essentially contraband coming into our country. And they have 
harmful impacts in different ways, obviously, than opioids or 
other sorts of harmful products, but they harm our economy and 
they harm our workers.
    And I am glad that the work of the Finance Committee, of 
Senator Wyden, has shed some light on this. We need stepped-up 
enforcement of this.
    Senator Casey. I want to open it up, Rick and Petra, if you 
have something on this. And I have a specific question for 
Petra after that.
    Rick, anything on this, in terms of the worker impact?
    Mr. Galiano. Senator, what the worker impact is--I am kind 
of a person who sees the end result when an individual gets 
laid off and comes to our halls and goes over things that he or 
she had in the last 5 years that are all gone, and trying to 
get that individual back to work, getting them some relief, 
getting them some benefits, after the 6 months of unemployment 
that they lose, trying to get them on TRA benefits, trying to 
get them another field of employment after education. Like I 
said, then I see what happens to communities, the impacts of 
what goes on.
    So it is disheartening to see these things go on and to try 
to get the foreign imports out when our hands are tied 
sometimes, and we can't do anything about it until the 
government works with us.
    Senator Casey. Petra?
    Ms. Mitchell. I think the impact on the supply chain is 
similar. When the steel industry is impacted and in decline, 
that ripple effect goes through the entire supply chain and 
puts a lot of added pressure onto smaller companies to continue 
to diversify, seek new markets, and look for other ways to keep 
their employees, because they certainly do not want to lose 
good employees due to the workforce challenges that I mentioned 
as well. So there is definitely a significant downstream 
impact.
    Senator Casey. Petra, I also want to put in a commercial. I 
am admitting up-front this is a commercial for your operation.
    Ms. Mitchell. I will take it.
    Senator Casey. I am not saying this just because Governor 
Casey created the program in Pennsylvania back in the 1990s, 
but why the hell, if I can say it that way, would any 
administration eliminate funding from the Manufacturing 
Extension Partnership? I wish someone in the administration 
could come to me and show me the report that justifies 
eliminating that program. They do not have a report. It is some 
budget guy who does not know anything about it, does not care 
about it, does not know Pennsylvania and a lot of other States, 
saying we do not need this program.
    So the only good news here is Democrats and Republicans in 
both houses will oppose the elimination of MEP, and that is the 
good news. But we cannot assume that is going to happen.
    So, Petra, I want you to know, we are going to fight to get 
the funding for MEP in place. But this is the second year in a 
row now they have tried to eliminate it in their budget.
    And I will wait 100 years for an explanation and still not 
have it, because there is no explanation other than some green-
eyeshade guy in Washington who doesn't know our States, 
certainly doesn't know my State, talking about eliminating it.
    So that is my commercial, and I am sticking to it.
    Todd, I know we want to go to Senator Wyden, but anything 
on these issues?
    Mr. Young. Just briefly on the question about duty evasions 
and Customs and Border Protection. Following enactment of the 
ENFORCE Act, I will credit the agency for their outreach to the 
steel industry. That has continued, actually will continue 
through 2 weeks from now, when the Acting Commissioner 
himself--he is pending permanent Commissioner--is meeting with 
the steel industry. We also had a delegation of Customs 
personnel from around the country recently, either in 2016 or 
early 2017, visit our research and technology center here in 
Munhall, PA to learn more about steel, how to identify 
products, how to distinguish between those so that they know 
that a product that has a rightful duty on it, they are 
collecting it. They are not trying to misidentify the product 
to evade that duty.
    Senator Casey. Todd, thank you for that.
    Senator Wyden, we are probably going to be wrapping up in 
about 10 minutes.
    Senator Wyden. Great. I just want to say, before we leave 
this matter of kind of how we go after the trade cheats who get 
busted, in effect, for dumping and unfair subsidies, and this 
did affect the steel industry, as we have been talking about. 
One of the things that Senator Casey and I were very interested 
in is, in the past, the reason the government would drag its 
feet is there was no trigger to make enforcement mandatory. I 
remember you and others told Senator Casey and I, ``You have to 
change that. You have to have strict timelines to make sure the 
government actually brings down the hammer, and there has to be 
action.''
    So we have appreciated you working with us, and I think 
that was one of the big developments after we did the big sting 
operation, and you all told us what was going on.
    I am going to wrap up with one point. I may have touched on 
it with Senator Casey. But Oregon and Pennsylvania have another 
thing in common, something probably both of us would rather not 
be the case, be able to pass on it, and that is, both of us had 
our companies hacked by the Chinese. And I know that the 
Chinese stole intellectual property from you all, Mr. Young.
    As you know, our solar manufacturer--we don't have very 
many solar manufacturers left in the United States--they also 
had intellectual property hacked. And in both cases, the 
Chinese were indicted for actually engaging in this kind of 
action.
    So I will just close, I think, Mr. Young, by having you 
tell us, what was the implication of the Chinese hack on you 
all, and how, in your view, can the 301 case be used to get 
China to eliminate unfair policies?
    Mr. Young. As you noted, we were twice the victims of 
cyber-
espionage, which included the indictment of members of the 
Chinese military. They specifically, in a second spear-phishing 
attack, sought to exfiltrate confidential business information 
related to advanced high-strength steels. We spent considerable 
effort, time, resources, and money to develop this technology. 
It is the direction in which steel is moving. It is lighter. It 
is stronger. It is what the auto industry needs to meet 
efficiency standards but also still protect the occupants of 
those vehicles.
    The full implication of it is not known. We did bring a 
separate legal challenge against Chinese producers based upon 
this attack. One of the things we found is that the law passed 
several decades ago was not as efficient in processing a cyber-
espionage attack, but we thought that was an important 
principle, to not let that matter rest.
    The full impact of it is that, if you can steal from us 
what we have spent years and extensive resources developing on 
the next generation of steel, and you do not go through that 
process yourself, certainly a shortcut would help potentially 
an entire industry in China which has half of the world's 
steelmaking capacity.
    Senator Wyden. Does anything about this relate to 301 and 
using it?
    Mr. Young. We actually filed comments when the 301 process 
was initiated, noting, in particular, part of the 301 effort is 
targeted on the sort of mandatory voluntary transmittal of 
intellectual property in order to do business in China. What we 
wanted to have on the record, which was known, but to 
reiterate, is that it is not just a matter of them making you 
take a step to engage in their markets. They attack us, and 
they do it through cyberspace.
    The question of exactly how a 301 could be used in that 
front, we are very curious to see the outcome of this report, 
similar to the 232. We expect that it is coming. But we have, 
obviously, taken steps since that time to seek to prevent a 
similar outcome. We are not seeking to produce steel in China. 
We are happy to produce it here as a 100-percent American 
company, from the raw materials to the final steel produced.
    To the degree they have some of our confidential business 
information and are using it, our priority would be to not let 
that product into our country.
    Ms. Mitchell. Senator, maybe just a quick comment.
    Cybersecurity is a huge, huge issue for small manufacturers 
as well. As you can imagine, they are resource-constrained. 
They do not have the full IT staff and departments to really 
manage that.
    But also, they are targets. Small companies are targets for 
financial fraud, for financial risk. And we suspect, very soon, 
they will be targets for stealing of intellectual property, as 
was already mentioned, and also shutting down of production 
facilities. One small company can be a critical element of a 
supply chain. You shut that company down, and that whole supply 
chain can be shut down.
    So again, it is a major issue not just for large companies, 
but for small ones as well.
    Senator Casey. Thanks. That may be the last, unless Senator 
Wyden has one. He certainly has the opportunity to ask another 
question.
    I want to turn to Rick Galiano. Rick, we were with the 
President on Tuesday, as I said, around a long table. And that 
was a good discussion we had. I brought up--it wasn't by way of 
the question, it was just urging the President to act in a time 
frame shorter than the 90 days. I probably should have used the 
number 60, because there are only about 60 days left for him to 
decide.
    But I said that because of this delay. I know some people 
listening might say, ``Oh, there goes a member of the United 
States Senate complaining about government inaction, and 
government is always slow. What is different about this one?'' 
What is the difference, right?
    But this one, this delay, has real consequences for the 
surge of imports. And obviously, what flows from that are real, 
adverse consequences for the workers.
    If you can, walk through that a little bit and just give us 
a sense of what this means, what this delay means, what this 
lack of a remedy means in the real life of a real worker?
    Mr. Galiano. Every day it delays is every day an employee 
may lose their job, a member may lose their job. As that 
continues, with foreign imports, the industry itself slows 
down, and the unemployment office gets busier because they lose 
their jobs.
    So in fact, if this is stalled any length of time, we are 
going to have issues dealing with the last depression or 
recession that we had 5 or 6 years ago or 7 years ago with the 
factories being 50-
percent idle, as it was back then.
    The plant that I come out of, it just started getting busy 
in the last 2 years. Four years before that, it was slow, and 
it came into a cycle that they are busy again. But with the 
foreign imports coming into this country as fast as they can, I 
fear that the same thing is going to happen going forward if 
this doesn't pass within the next 6 months or 3 months.
    Senator Casey. In your testimony, when you talked about 
recent action to put more tools in the toolbox, you said, I 
think it is the first page of your testimony, when you talked 
about the passenger vehicle, light truck tires issue, you 
talked about a $3-billion investment into U.S. tire plant 
expansions and factories because you had that tool available.
    Mr. Galiano. Correct.
    Senator Casey. Seven thousand, two hundred union tire 
workers at Goodyear reached a new 5-year agreement.
    In other words, you have tools. You use those tools for 
enforcement. And you get results for American workers.
    Mr. Galiano. And with a 5-year agreement, no employee will 
be laid off for the full 5 years.
    Senator Casey. So what we are trying to do together is get 
the same results for steelworkers and others just like what 
happened in the tire context. So it is a good analogy, a good 
comparison.
    Senator Wyden?
    Senator Wyden. I think this has been very, very helpful, 
Senator Casey. We started out, whatever it was, 1\1/2\ hours 
ago or something, talking about how, in life, sometimes, 
particularly for us in the Senate, you can be talking about 
something and everybody says, ``That is interesting. Let's come 
back in 6 months or 8 months and find out what is going to 
happen.'' But what you have done by scheduling this hearing--
and we have been kidding, we went to the meetings, we scheduled 
the hearing, and all of a sudden we are going to get results. 
But this is not the first time you have led our committee on 
these issues, as we have talked about with respect to the 
ENFORCE Act and the Leveling the Playing Field Act. And in 
effect, keeping the pressure on day in and day out has helped 
us, as I have described it, begin a fresh approach on trade 
that I have come to call trade done right.
    So I just want you to know I very much appreciate you 
giving me this invitation. We have learned a lot of valuable 
facts here today. And I think all of you Pennsylvanians can 
expect to see Senator Casey and I, to some extent, perhaps as 
early as this afternoon, start commenting on some of the things 
that the President may want to pursue. And we will talk about 
what the voices of Pennsylvania have had to say about it.
    Senator Casey. Senator Wyden, thanks very much. We are 
grateful you are here and grateful for your leadership on these 
issues.
    I have to say that I don't know exactly what was said on 
the conference call that Commerce Secretary Wilbur Ross had at, 
I guess 10:30. We will learn that soon. But here is what I hope 
happened. It is a little bit of fiction, but it lightens the 
mood a little bit.
    I am hoping that Secretary Ross got on the phone, and 
before he walked through too much of his presentation, that he 
was there solely to be introducing another person on the phone, 
and the President got on the phone and made an announcement. I 
do not think that happened, but I am hoping, because we want to 
hear from the President on 232. We want to hear from the 
President that he is going to use every tool at his disposal to 
fight back against China cheating, to fight back against any 
country trying to take our jobs, and to put in place bipartisan 
approaches to create and retain jobs.
    I referred to this letter the other day when I had my 2 
minutes of comments. I referred to a February 1st letter the 
President received, and this is signed by, if I count the 
signatures, by about 25 steel executives. I will not read all 
of it, obviously, but the one thing that they said in this 
letter, among many important points--and I reiterate this today 
for what I hope will be the determination by the President--
they said, talking about a 232 decision, ``We urge you to 
implement a remedy that is comprehensive and broad-based, 
covering all major sources of steel imports and the full range 
of steel products with only limited exceptions for products not 
currently available in the United States.''
    A lot of words there, but the most important are, they want 
a remedy that is comprehensive and broad-based. The President 
was advised by some members of Congress in the room to be 
narrow and focused and limited and balanced and all that. That 
always sounds nice, but when it comes to American workers, we 
do not want to be limited. We do not want to be balanced. We 
want our workers to win based upon the actions the Federal 
Government and the Congress can take.
    We do not want to be targeted. We want to win these races. 
We want to get these jobs and keep these jobs, because, as was 
pointed out earlier--Rick, I think you made the point--when 
folks lose jobs in these circumstances, it is not something 
that that worker did or that company did. It is because other 
companies are cheating, and we are not holding them 
accountable, even though we have all the tools to do it. We 
have to make sure that becomes the case.
    You know, I have said it a thousand times. I will say it 
again. We had a statue, a bronze sculpture, I should say, that 
was put in front of the Governor's residence in Harrisburg. The 
guy that put that there I knew pretty well. And he got support 
from every union in the State of Pennsylvania to build that 
bronze sculpture of a steelworker putting in place a steel 
beam. He said the reason he put it there was to remind every 
future Governor about what steelworkers meant to the country, 
how they built our country, and how they helped us outproduce 
the world to--guess what?--win World War II. That is about all 
they did, right?
    And it is about time that we take a similar approach and 
have a similar determined spirit to fight on their behalf when 
it comes to protecting their jobs. If they have a level playing 
field, if we enforce the law, if we hold other countries 
accountable, and if we bring cheaters to justice, so to speak, 
guess what? Steelworkers or all of our workers can outcompete 
the world and do as their ancestors did to win World War II and 
to win any war, whether it is economic or otherwise.
    So that is all we are asking. We are not asking for 
something extra here. We are just asking for people to enforce 
the law, use the tools that you have, and win these races, win 
these fights for our workers.
    So I am so grateful that our panel was here with us today 
to give us a perspective on this. I am certainly honored to be 
here at the Community College in Beaver County.
    And, Senator Wyden, we are grateful that you took the time 
to travel to Pennsylvania. We are also even more grateful for 
your work on the Finance Committee on these issues.
    So, unless there is anything further, we are adjourned.
    [Whereupon, at 11:19 a.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


           Prepared Statement of Hon. Robert P. Casey, Jr., 
                    a U.S. Senator From Pennsylvania
    We're here today to discuss what I view as two of the most critical 
issues that relate to the competitiveness of our Nation: manufacturing 
and infrastructure, which have a substantial impact on jobs and wages. 
I'm honored to be joined today by Senator Wyden, who came from 
Washington to be with us, but as you know represents the State of 
Oregon and has worked for years on all these issues--trade issues, 
economic and jobs issues, manufacturing, infrastructure, and the like.

    We know that steel overcapacity, as well as trade cheating and 
China's efforts to literally steal our future by stealing our 
companies' IP, are some of the most fundamental trade issues of our 
time because they directly impact Pennsylvania jobs and wages. I've 
said for years and I'll say again: when China cheats, Pennsylvania 
loses jobs. It's that simple. So we have to face that reality when 
we're confronting these issues. China is going after America's 
competitive advantage by any means necessary; if China can't buy it, or 
if China can't run it out of business, they steal it. And unfortunately 
that's a harsh reality. You don't need to look far in our State to find 
companies and unions who have been hacked by the Chinese government. 
Just talk to U.S. Steel, talk to the Steelworkers, talk to other 
institutions in southwestern Pennsylvania who have been victims of 
these actions.

    I went to the White House this past Tuesday to meet with the 
President and a bipartisan, bicameral group of legislators--Senators 
and House members of both parties, including Senator Wyden--to discuss 
steel and aluminum. At that meeting, I told the President how 
Pennsylvania companies and steelworks have been hammered by the surge 
in imports since the Commerce Department announced its section 232 
investigation last April on whether rising steel and aluminum imports 
represent a threat to national security. I also heard from Senators 
telling the President to exercise caution--that's what a number of 
Republican Senators and House members were telling him. I have a 
different view, which we'll get into later.

    When the Commerce Department launched this investigation in April 
of last year, I along with steelworkers across Pennsylvania were 
hopeful that the Commerce Department would quickly complete their 
study, and the President would take decisive action. And then, we 
waited. Through the spring and the summer, rumors were swirling, but 
still steel imports were surging. The Commerce Department seemed ready 
to transmit the report by the end of the summer and then the President 
told The Wall Street Journal in July that he did not intend to move 
forward on a final determination on the steel section 232 case until 
``everything finished up between health care and taxes, and maybe even 
infrastructure.'' So said the President at that time. Meanwhile, we 
watched imports rise for the first 12 months of 2017--total steel and 
finished steel imports were up 17.5 percent and 14.6 percent, 
respectively, from the same period in 2016. So total steel basically up 
18 percent, and finished steel imports up basically 15 percent in that 
time period. Imports of electrical steel, which many of you know is the 
steel used to ensure we have an electricity grid, have more than 
doubled from 2016 to 2017. Pipes and tubes surged 82 percent from 16 
percent to 17 percent. So electrical steel up 100 percent, pipes and 
tubes up 82 percent.

    The Commerce Department had 270 days to transmit the report to the 
President, and they submitted it just shy of that by a few days. The 
President then had 90 days to make a determination. At the White House 
this week, I urged him not to take that long and move swiftly on this 
long-delayed relief.

    I said earlier we can't allow China to steal our future, and that's 
not drama and hyperbole, that's the truth. If we allow them to continue 
on the pathway that they've been on, they will steal our future. 
Actions matter, and the actions we take today must be directed at long-
term outcomes we want for our children and grandchildren. This means an 
economy that creates opportunity for all Americans and a system that 
creates a fair environment for our workers to find jobs that pay 
family-sustaining wages. This also means investing in our roads and 
bridges, schools, locks, and dams which are so important to commerce 
here in southwestern Pennsylvania, and of course our electric grid, and 
broadband. Infrastructure matters. It's about our security, it's about 
our safety, and it's about our jobs. So this means putting real Federal 
dollars behind infrastructure that is fundamental to our combined 
competitiveness.

    I believe you can do infrastructure one of two ways: you can do it 
the corporate way, which is not the way to do it, or you can do it the 
American way. I want an American infrastructure bill. It means we're 
all in this together, we're all one American family. We ought to put 
public dollars in, and big dollars, to really make a difference and 
create jobs. So this means making sure that the inputs to that 
infrastructure are made in America. I think both parties agree on that, 
and I'm grateful that Senator Wyden is here today to make these points 
and to discuss these critical matters for the economy of Pennsylvania, 
the jobs of Pennsylvania, as well as American jobs and American 
competitiveness.

                                 ______
                                 
            Prepared Statement of Rick Galiano, President, 
              Beaver Lawrence County Central Labor Council
    Mr. Chairman, members of the committee, it is an honor to speak 
with you at this field hearing on Trade Enforcement and Infrastructure. 
My name is Rick Galiano, and I am president of the Beaver Lawrence 
Labor Council and a United Steelworker (USW) member. My testimony to 
you today is straightforward; I try to do everything in my power to 
improve the livelihood of our union brothers and sisters, our 
communities, and our country. I want Congress and the administration to 
do the same. My concern is that the tools that our country has to 
defend its manufacturing base and move it further into the new 
millennium have been improved, but much more must be done.

    Since Congress passed the Leveling the Playing Field Act and the 
ENFORCE Act a slew of trade enforcement cases followed. The much-needed 
trade law improvements in the Leveling the Playing Field Act were 
critical to the success of those cases and Senator Wyden's ENFORCE Act 
is necessary when those that trade unfairly try to game the system. 
Since then, some of our international competitors have tried to deride 
these changes as ``protectionist''; instead I see the day-to-day 
results when a worker gets a job back or their hours increase. And I 
also see the potential if we could do more. Restoring fair play and 
ensuring that we have a fair chance to compete internationally is all 
we ask.

    For example, since the USW successfully brought forward an 
antidumping and countervailing duty case on Passenger Vehicle and Light 
Truck (PVLT) tires against China in 2015 and off the road tires from 
India last year, close to $3 billion have been invested into U.S. tire 
plant expansions and factories.\1\ Seven thousand two hundred union 
tire workers at Goodyear reached a new 5-year agreement with wage 
improvements and an extension of plant protection guarantees where no 
USW plants will close during the term of the agreement.\2\ To the 
doubters of the value of trade enforcement, I dare them to look one of 
those workers in the face and tell them they are not worth 
``protecting.''
---------------------------------------------------------------------------
    \1\ http://www.rubbernews.com/article/20160913/NEWS/309059996/tire-
makers-invest-10-bil
lion-in-expansions-improvements and http://www.rubbernews.com/article/
20170911/NEWS/170919998/tire-makers-spend-big-on-new-plants-expansions.
    \2\ https://www.usw.org/news/media-center/releases/2017/usw-
members-overwhelmingly-approve-goodyear-contract.

    I wish I could say there is a similarly positive outcome in the 
steel industry as there is in the tire industry. Since the passage of 
the Leveling the Playing Field Act, 67 anti-dumping and countervailing 
duty orders against a multitude of countries have been put into effect. 
While those trade enforcement cases in the steel industry worked 
through the year-long process to get tariff relief, almost 19,000 
steelworkers that were laid off in 2015 at idled or underutilized 
facilities across the country waited. Too many are still waiting. And, 
let's remember, those trade cases are simply about addressing foreign 
unfair trade in line with international rules we weren't asking for 
---------------------------------------------------------------------------
anything that the law wasn't designed to provide.

    While workers waited, the steel industry last year shipped 
90,886,717 net tons, a 5.0-percent increase, which is promising on the 
one hand but the industry operating capacity hovers in the low 70s, 
meaning roughly 25 percent of our country's steel making capability 
sits idle or underused.\3\ While global overcapacity still gets talked 
to death at the Global Forum of Steel Overcapacity and at the 
Organization of Economic Cooperation and Development (OECD), USW has 
been cautiously optimistic about the chance for unilateral relief 
through the implementation of more exotic trade enforcement mechanisms 
like the section 232 steel and aluminum investigations currently in 
President Trump's hands.
---------------------------------------------------------------------------
    \3\ https://www.steel.org/Steel_org/document-types/news/2018/
decembershipments.aspx?site
Location=c481cc99-d816-4613-805c-b90af33cc162.

    As you are aware, section 232 is a part of U.S. trade law that 
gives the Commerce Secretary the ability to investigate whether certain 
import levels pose a national security threat. USW firmly believes that 
our Nation's military and critical infrastructure needs are essential 
to our national security. The industry cheered last April when 
President Trump announced a section 232 investigation into steel 
---------------------------------------------------------------------------
imports--but we are still waiting for results.

    When President Trump and administration officials had pledged to 
unveil the findings of the section 232 investigations by July 1 of 
2017, we were hopeful at first and left wondering each day after. Now 
it is over a month since the Commerce Department submitted the 232 
steel and aluminum reports to the President, and they're still sitting 
on his desk. Those reports initiated over 270 days ago by the Trump 
administration appeared to be an attempt to fulfill a campaign promise 
to manufacturing workers.

    By delaying the 232, the foreign steel industry saw an opening. 
While the U.S. has shipped more steel this year, finished steel import 
market share was 27 percent for full year 2017. Total and finished 
steel imports are up 15.4 percent and 12.2 percent, respectively.\4\ 
The economy has grown but the U.S. steel industry continues to fight a 
barrage of foreign steel products. Most of the growth in our market is 
going to imports--not to our own steel mills and steelworkers.
---------------------------------------------------------------------------
    \4\ http://www.steel.org//media/Files/AISI/Press%20Releases/2018/
IMP1712.pdf.

    However, our union has not been idle, knowing that others would try 
to undermine the 232 investigation. USW members across the country have 
stood up asking for the Congress and the administration to do its job 
and defend the most efficient and advanced manufacturing industry in 
the world. Since the initiation of those investigations, over 120 
Representatives and Senators submitted letters to the Department of 
Commerce or the President urging action on the investigations.\5\ 
Almost 15,000 Steelworker union members from across the country wrote 
the Department of Commerce asking for a conclusion and successful 
remedy.
---------------------------------------------------------------------------
    \5\ https://www.usw.org/news/media-center/articles/2017/thanking-
those-who-stand-with-us.

    Promises and rhetoric can only go so far. The actions we take as a 
country to create a better deal for American workers will be the 
---------------------------------------------------------------------------
measure by which union members and voters judge our elected officials.

    U.S. workers should not fear globalization, but it requires our 
elected leaders to focus not just on corporate profits but on the 
distribution of that wealth. Our trade laws need to reflect a more 
globally connected world and the potential for abuse by bad actors. We 
are using tools developed in the last century to fight a war in this 
one. A modern steelworker in this country can make 1.9 tons of steel 
per man hour; I want our country's trade laws to be that efficient and 
effective.\6\
---------------------------------------------------------------------------
    \6\ http://www.steel.org/about-aisi/industry-profile.aspx.

    The Finance committee has the potential to not just upgrade our 
trade laws but also set a path to renew our Nation's infrastructure. 
The great accomplishments of the 20th century in this country need 
maintaining and unlocking the potential of the 21st century requires 
---------------------------------------------------------------------------
leadership from all levels of government including this committee.

    Even though the U.S. Congress and some States have recently made 
efforts to invest more in infrastructure, these efforts do not come 
close to the $2.0 trillion in needs as reported by the American Society 
of Civil Engineers (ASCE). Infrastructure is the backbone of the U.S. 
economy and a necessary input to every economic output. It is critical 
to our national defense.

    The cost of deteriorating infrastructure takes a toll on families' 
disposable household income and impacts the quality and quantity of 
jobs in the U.S. economy. ASCE estimates that from 2016 to 2025, each 
household will lose $3,400 each year in disposable income due to 
infrastructure deficiencies.\7\
---------------------------------------------------------------------------
    \7\ https://www.infrastructurereportcard.org/wp-content/uploads/
2016/10/ASCE-Failure-to-Act-2016-FINAL.pdf.

    If I paid only half my mortgage payments, I would lose my home. Yet 
as a country we are only paying half of America's infrastructure bill, 
leaving an investment gap and an electorate stuck in gridlocked traffic 
on outdated roads or crammed into unreliable and unsafe mass transit 
systems. It diminishes our competitiveness by increasing costs to 
business and getting products to markets. I worry that by failing to 
meet our country's infrastructure needs we will indeed be at risk of 
losing the cohesion of our great country. I want to put a few examples 
in front of you today to reflect on. I do not know all the solutions to 
these problems but just like every USW member, I am willing to roll up 
---------------------------------------------------------------------------
my sleeves to fix these problems.

        In today's increasingly digital world, 88 million citizens in 
urban and rural America lack affordable or any broadband access.\8\
---------------------------------------------------------------------------
    \8\ https://www.recode.net/2017/6/20/15839626/disparity-between-
urban-rural-internet-access-major-economies.
---------------------------------------------------------------------------
        It is estimated that leaky, aging pipes are wasting 14 to 18 
percent of each day's treated water; the amount of clean drinking water 
lost every day could support 15 million households.
        Due to the lack of investment, the number of deficient high-
hazard potential dams has also climbed to an estimated 2,170 or more. 
It is estimated that it will require an investment of nearly $45 
billion to repair aging, yet critical, high-hazard potential dams.
        One out of every 5 miles of highway pavement is in poor 
condition and our roads have a significant and increasing backlog of 
rehabilitation needs.\9\
---------------------------------------------------------------------------
    \9\ https://www.infrastructurereportcard.org/cat-item/roads/.
---------------------------------------------------------------------------
        The most recent estimate by the American Society of Civil 
Engineers puts the Nation's backlog of bridge rehabilitation needs at 
$123 billion.

    We are fast closing in on 20 years into the new millennium and the 
Federal Government cannot just be a partner with States and private 
entities. Nor can it improve infrastructure by privatizing or selling 
public assets. We need the Federal Government to be a leader. We need 
to set policies that maximize the public good for our infrastructure 
not just for the short term but the long term.

    We need to ensure our tax dollars are used to maximize the economic 
benefit with domestic procurement policies like Buy America. We must 
ensure that products actually qualify under the act. Foreign producers 
have been pushing to undermine our melted and poured standard so that 
only 10 percent of the actual work would be done in this country as 
they ship slabs into the U.S. hoping that minor transformation here 
would confer preferential procurement status. Loopholes and gimmicks 
aren't acceptable. We need to avoid privatization for the sake of 
privatization. We need to ensure workers receive a living wage for the 
work they do to bring our infrastructure into the 21st century.

    In closing, I know with a strong trade enforcement strategy 
combined with a concerted effort to renew our infrastructure we create 
a better America. Workers in Pennsylvania, the country and every USW 
member have faith that we can use the last 10 years of economic 
turnaround to springboard into the future but we look to you as our 
elected leaders to accept that faith and lead.

                                 ______
                                 
               Prepared Statement of Petra B. Mitchell, 
                 President and CEO, Catalyst Connection
    Good morning. My name is Petra Mitchell, and I am the president and 
CEO of Catalyst Connection, an economic development organization that 
for over 30 years has been dedicated to serving our region's small and 
medium-sized manufacturers. On behalf of our board of directors, our 
staff and our clients, I assure you we are passionate about 
manufacturing.

    Manufacturing in this country is a $2-trillion sector, with over 11 
million workers and approximately 293,000 establishments. Manufacturing 
in southwestern Pennsylvania is a $12-billion sector with 93,000 
workers and approximately 3,000 establishments. Many of these 
establishments are closely held, privately owned, or family owned 
businesses, and Catalyst Connection has worked with about half of them 
since our inception and 153 in the last year.

    To enable us to do our work, Catalyst Connection is funded in part 
by the National Institute of Standards and Technology (NIST) 
Manufacturing Extension Partnership (MEP) program and by the 
Pennsylvania Industrial Resource or IRC program. The IRC program was 
started by Governor Robert Casey, Senator Casey's father, and was a 
model for the national MEP program, both of which have been in 
existence since the late 80s.

    This morning I'd like to provide an overview of the MEP program, 
the challenges that small and medium-sized manufacturers are facing, 
and the role that the MEP program and Catalyst Connection are playing 
in helping to address those challenges.
                      overview of the mep program
    The MEP program is a Federal public-private partnership that 
provides small and medium-sized manufacturers (SMMs) technology-based 
services they need to thrive in today's economy and create well-paying 
manufacturing jobs. MEP is managed by the NIST and implemented through 
a network of industry-led centers located in every State.

    MEP is a proven partnership that can help President Trump achieve 
his vision and commitment for American manufacturing and its workforce.

    SMMs account for nearly 99 percent of all manufacturing firms in 
the United States, and MEP is the only Federal program dedicated to 
serving them. These firms comprise the supply chains of Fortune 500 
manufacturers and drive our Nation's economy. Due to their need for 
manageable and customized services, they are often overlooked by for-
profit consulting and technology firms but need those services to 
compete, grow, and create jobs. The MEP centers fill that gap. In 2016 
alone, more than 26,000 SMMs utilized the MEP network.

    MEP returns $8.70 to the Federal Treasury for every $1 invested.

    As a public-private partnership, MEP delivers a high return on 
investment to taxpayers. The Upjohn Institute for Employment Research 
conducted a study of MEP this past year and found that the program 
generates an 8.7:1 return on investment. Each year, an independent firm 
surveys manufacturers regarding the impact they have achieved from MEP 
Center services. In 2017, MEP clients reported $12.66 billion in new 
and retained sales and the creation or retention of 110,721 jobs. 
Considering that the average U.S. manufacturing worker earns more than 
$82,023 in wages and benefits per year, MEP clients are economic 
drivers in their communities. MEP clients are also increasing their 
capacity for the production of goods. MEP clients reported $3.5 billion 
in new investments directly attributed to their work with MEP.

    Manufacturers served by MEP make a substantial economic 
contribution.

    Since 1988, MEP clients reported 884,596 jobs created and retained, 
high-paying jobs that have a large multiplier effect. Each of these 
jobs creates 3.4 full-time additional jobs, totaling more than 3 
million additional jobs in local communities. The total job impact by 
the MEP Program generates significant local, State, and Federal tax 
revenues.

    Manufacturers pay to utilize MEP--so it's not free.

    SMMs pay for the direct costs of the services they receive. This 
fee for service meets the Federal cost share requirements, requires MEP 
Centers to offer services that are of value to the manufacturing 
community, and encourages SMMs to seek a return on their investment, 
which is more likely to sustain the improvements and generate local 
economic impact.

    Congress has just reauthorized MEP through the American Innovation 
and Competitiveness Act.

    By voting unanimously to pass the American Innovation and 
Competitiveness Act (S. 3084) which was signed into law on January 6, 
2017 (Pub. L. 114-329), Congress has provided a major boost to the 
Nation's economy by encouraging growth in the manufacturing sector 
through advanced manufacturing initiatives.
         southwestern pennsylvania job losses in manufacturing
    Catalyst Connection has been the MEP of southwestern Pennsylvania 
since 1994, and has achieved significant results. Companies that work 
with us are hiring, growing, and adding jobs. But we need to do more. 
Unfortunately, manufacturing employment in our region has decreased by 
almost 5 percent in the last 5 years, even though output and 
productivity are growing. We believe that a majority of the 4,500 job 
losses are coming from plant closures and shutdowns of larger 
companies, such as Aquion Energy and Akers National Roll, but the 
growth in jobs among smaller companies was just not enough to make up 
for these losses. This is particularly concerning for rural communities 
where downturns in manufacturing impact rural communities 
disproportionately to more urban communities. Considering that almost 
all manufacturing-dependent counties in this country are rural, this 
can have a big impact on people's lives. Back in our region, at least 
four counties (Indiana, Lawrence, Somerset, and Greene) are considered 
rural according to the USDA, while many other communities within the 
other counties certainly seem rural. Adding to our concerns is that 
many of the counties in our region are also coal-impacted, making 
things very difficult in some of our communities.
Advanced Manufacturing Technology and Workforce Development Challenges
    To reverse the trends in job losses in our region and around the 
country, companies will need to accelerate their pace of growth, 
greater than any productivity gains that they must achieve to remain 
competitive in global markets. They will have to continue to invest in 
new products, automation and robotics, and in workforce development.

    The technologies of Industry 4.0 are quickly taking shape such that 
additive manufacturing, big data and analytics, digital manufacturing, 
Internet of Things (IoT), smart manufacturing, and other similar buzz 
words are becoming commonly used, yet few manufacturing leaders truly 
understand the power of these developments, or more importantly the 
impact that they could have on their businesses.

    And while many companies are growing and interested in hiring, the 
skills gap in manufacturing continues to play a significant role, 
hampering growth, since many companies just can't find the workers they 
need to fill critical jobs. According to a Deloitte report, The Skills 
Gap in Manufacturing, 2015 and Beyond, over the next decade, nearly 3.5 
million manufacturing jobs will likely need to be filled in the United 
States. The skills gap is expected to result in 2 million of those jobs 
going unfilled.

    In southwestern Pennsylvania, the news is similar. According to the 
Partners4
Work Workforce Investment Board, 26 percent of the approximately 93,000 
manufacturing workers in southwestern Pennsylvania are age 55 or over. 
This identifies the need for 24,000 people to enter into careers in 
manufacturing over the next 10 years to backfill impending retirements. 
This is a daunting challenge for one of our most important drivers of 
regional economic success and could result in many of the job openings 
going unfilled. Similarly, Brookings, in its recently released report 
Capturing the next economy: Pittsburgh's rise as a global innovation 
city, writes that ``demographic and skills headwinds threaten 
Pittsburgh's ability to create the broad workforce needed to compete.'' 
Brookings notes that this is not a simple issue of supply and demand, 
or even of addressing the skills gap, as many workforce training 
programs go unfilled. Brookings notes that many ``job seekers don't see 
viable pathways to careers in advanced industries, including 
manufacturing.''

    While the Brookings report suggests that there are unemployed and 
underemployed workers available, a recently released report by the 
Pennsylvania IRC Network, Advanced Manufacturing Technology Survey 
Interviews Report, 60 percent of small and medium manufacturers (SMMs) 
report that talent was one of their top three business challenges. 
Respondents seem to be concerned both with the lack of knowledge and 
skills due to retirements, as well as a lack of skills needed to 
support emerging technologies. Companies are being challenged to 
respond to workforce needs to upskill and prepare for new technology.
     the important role of catalyst connection and the mep program
    Manufacturing CEOs are looking to external resources such as the 
MEP program and Catalyst Connection to provide valuable business 
process and technology adoption services right-sized to meet their 
needs. Our foundational expertise in helping companies with strategies 
focused on product, process, and people are critical to getting ready 
for new technologies.

    Product services are those that facilitate manufacturer growth 
through improved marketing and sales techniques, new product 
development, exporting, and internal and collaborative innovation. 
Pennsylvania's research universities are critical partners for product 
innovation. Process services are those that reduce operating and 
product costs through the implementation of operational improvements, 
achievement of quality objectives, successful pursuit of sustainability 
and energy/materials efficiencies, and supply chain optimization. And 
finally, People-focused services provide assistance in the areas of 
talent development, training in specialized skills, improvements in 
hiring, HR management, workforce evaluation, and workforce planning 
processes.

    The bottom line is that products must be innovative, processes must 
be efficient and globally competitive, while the people must have the 
skills to program, operate, and maintain highly automated equipment. 
And employers are in need of assistance in each of these areas.

    Catalyst Connection is also engaging in regional workforce 
development strategies focused on career awareness and exploration at 
the middle school and high school level, and on Employer-led 
Apprenticeship programs. Our Middle School Video Contest, ``What's so 
Cool About Manufacturing'' attracts over 400 students, parents, and 
teachers, and begins the process of changing the image of 
manufacturing. Our high school Manufacturing Innovation Challenge 
allows students to practice their real-world problem-solving skills by 
matching them with local employers and a business challenge. Our 
Employer-Led Apprenticeship program is focused on helping companies 
register and implement an apprenticeship program that helps to fill 
their talent pipeline, while giving workers valuable credentials and 
on-the-job training. Our region's community colleges are critical 
partners in our apprenticeship programs.
Conclusion
    In 2017, Catalyst Connection clients reported almost $130 million 
of new and retained sales, $8 million of cost savings, $16 million of 
new investments, and 1,164 jobs created and retained. Companies value 
the work we do and tell us that our staff's technical expertise and 
experience, the cost of our services, the return on investment, and the 
reputation for results are the main reasons they choose to work with 
us.

    I urge you to continue your support for policies and funding that 
support our country's small and medium-sized manufacturers, which are 
critical to our Nation's supply chains, including the Department of 
Defense, and which provide high-paying family-sustaining jobs for 
millions of American families and contribute to their local communities 
and economies. Workforce development resources, including support for 
apprenticeship programs, are a key factor in closing the skills gap in 
manufacturing. The MEP program, as the only program dedicated to 
serving our country's small and medium-sized manufacturers, is a 
critical program, and I would urge you to continue to support funding 
for this program at modestly increased levels.

    Manufacturing businesses create and retain high-paying, family-
sustaining jobs that are building the foundation for national and 
regional economic growth. Manufacturing job growth also has a 
significant ripple effect throughout our entire economy, where many 
firms will prosper.

                                 ______
                                 
            Prepared Statement of Scott N. Paul, President, 
                  Alliance for American Manufacturing
    Senator Casey and members of the committee, thank you for the 
opportunity to testify on behalf of the Alliance for American 
Manufacturing (AAM) at today's hearing on ``Trade Enforcement and 
Infrastructure: Safeguarding our Industrial Base From Present and 
Future Challenges.''

    The Alliance for American Manufacturing is a non-profit, non-
partisan partnership formed in 2007 by some of America's leading 
manufacturers and the United Steelworkers. Our mission is to strengthen 
American manufacturing and create new private-sector jobs through smart 
public policies. We believe that an innovative and growing 
manufacturing base is vital to America's economic and national 
security, as well as to providing good jobs for future generations. AAM 
achieves its mission through research, public education, advocacy, 
strategic communications, and coalition building around the issues that 
matter most to America's manufacturers and workers.

    Formed in 2007, AAM is proud to have helped call attention to some 
of the most pressing trade issues impacting American manufacturing 
companies and their workers--including global industrial overcapacity, 
dumping and subsidies, State-owned enterprises, currency manipulation, 
theft of trade secrets, and the need to better negotiate trade 
agreements. And, with respect to infrastructure, we have been at the 
forefront of efforts to establish stronger Buy America rules to ensure 
that our hard-earned tax dollars create jobs here at home.
 u.s.-china trade deficit is unparalleled in its magnitude and adverse 
                                 impact
    Since Beijing's 2001 entry into the World Trade Organization (WTO), 
the U.S. bilateral trade deficit with China has more than quadrupled, 
from $83 billion in 2001 to a record $375 billion in 2017. In just 15 
years, the impact of the surging U.S.-China trade deficit on U.S. 
companies and American workers has been severe and too often 
overlooked. Our communities have shed more than 54,000 manufacturing 
facilities and we've seen our global market share in manufactured 
exports shrink from 14 percent in 2000 to 9 percent in 2013. 
Altogether, a staggering 3.4 million jobs, largely in manufacturing, 
have been lost because of this massive trade imbalance. Each State and 
every congressional district in the United States has experienced lost 
jobs. In Pennsylvania alone, 136,700 jobs were displaced, accounting 
for 2.34 percent of the Commonwealth's workforce. And the losses extend 
into nearly every sector of the economy, ranging from computer and 
electronic parts to textiles and apparel, furniture, steel, aluminum, 
and other capital-intensive sectors.\1\
---------------------------------------------------------------------------
    \1\ Scott, Robert E. ``Growth in U.S.-China trade deficit between 
2001 and 2015 cost 3.4 million jobs.'' Economic Policy Institute, 
January 31, 2017. Web, May 9, 2017.

    While the China trade deficit is unparalleled both in its magnitude 
and its adverse impact on our economy, we should not overlook that 
unfair trade from many other countries--even including our allies--has 
---------------------------------------------------------------------------
taken its toll:

        South Korea. It was promised that the U.S.-Korea Free Trade 
Agreement (KORUS) would support 70,000 U.S. jobs and increase exports 
of American goods by $10 to $11 billion. Yet, the U.S. trade deficit 
with South Korea jumped $15.1 billion between 2011 and 2015 (from $13.2 
billion to $28.3 billion), resulting in the estimated elimination of 
more than 95,000 jobs.\2\ The trade agreement hailed as a job creator 
has not opened new markets for U.S. automobiles and other products, as 
was promised, and demands improvement.
---------------------------------------------------------------------------
    \2\ Scott, Robert E. ``U.S.-Korea trade deal resulted in growing 
trade deficits and more than 95,000 lost U.S. jobs.'' Economic Policy 
Institute, May 5, 2016. Web, May 9, 2017.

        Japan. Meanwhile, it has been estimated that the trade deficit 
with Japan--fueled by currency practices--is estimated to have 
eliminated nearly 900,000 U.S. jobs as the goods deficit reached $78.3 
billion in 2013.\3\ It has remained at unacceptable levels ever since.
---------------------------------------------------------------------------
    \3\ Scott, Robert E. ``Currency Manipulation and the 896,600 U.S. 
Jobs Lost Due to the U.S.-Japan Trade Deficit.'' Economic Policy 
Institute, February 4, 2015. Web, May 9, 2017.
---------------------------------------------------------------------------
                    trade deficit reduction matters
    Trade deficits matter, and there is compelling research showing 
that reducing trade deficits would yield positive outcomes for our 
economy. For instance, a reduction of the U.S. global trade deficit by 
between $200 billion and $500 billion each year ``could increase 
overall U.S. GDP by between $288 billion and $720 billion and create 
between 2.3 million and 5.8 million U.S. jobs.'' \4\
---------------------------------------------------------------------------
    \4\ Scott, Robert E. ``Currency Manipulation and the 896,600 U.S. 
Jobs Lost Due to the U.S.-Japan Trade Deficit.'' Economic Policy 
Institute, February 4, 2015. Web, May 9, 2017.

    To those who have made unfounded claims that the loss of 5 million 
U.S. manufacturing jobs, or roughly one-third of the total amount, 
since 2000 was the result of increased productivity, and not trade 
deficits, the data does not support such a narrative.\5\ According to 
the Economic Policy Institute (EPI), between 2000 and 2007, 3.6 million 
manufacturing jobs were lost. Yet, productivity growth declined, 
falling from 4.1 percent per year in the 1990s to 3.7 percent per year. 
The drop in the rate of growth of manufacturing output to 0.5 percent 
per year is largely the result of the rapid growth of the manufacturing 
trade deficit. Meanwhile, the Great Recession and financial crisis was 
largely responsible for the decline in manufacturing output and job 
loss from 2007 to 2014. Manufacturing trade deficits continued to surge 
over this period following the Great Recession.\6\
---------------------------------------------------------------------------
    \5\ Gosselin, Peter, and Dorning, Mike. ``After Doubts, Economists 
Find China Kills U.S. Factory Jobs.'' Bloomberg Politics, June 18, 
2015. Web, May 9, 2017.
    \6\ vi Scott, Robert E. ``Manufacturing Job Loss: Trade, Not 
Productivity, Is the Culprit.'' Economic Policy Institute, August 11, 
2015. Web, May 9, 2015.

                proactive trade enforcement approach is 
                 necessary to eliminate trade deficits
    For too long, our trade policies haven't been focused on supporting 
our manufacturing sector but, in many ways, have undermined it. The 
United States is long overdue for a new approach to trade, especially 
with China. It is both possible and desirable to create a trade policy 
framework to support a resurgent, made in America manufacturing base.

    The United States has considerable economic leverage to shrink our 
$375-billion 2017 trade deficit with China. U.S. exports to China 
account for less than a percent of our GDP, our banks hold less than a 
percent of their assets in China, and multinational companies derive 
less than 2 percent of their revenue from there.

    Using aggressive trade enforcement to strengthen key U.S. sectors 
is hardly a radical proposition and there is clear precedent in our not 
too distant past of bold leadership and outside the box thinking. 
President Ronald Reagan adopted a flurry of measures to address an 
uneven playing field with European nations and Japan. His 
administration's aggressive actions helped revitalize our semiconductor 
industry and the iconic Harley Davidson. The Plaza Accords, which 
raised the value of currencies in Japan and Europe relative to the 
dollar, had a positive effect in lowering our trade deficits.
               it's time for the white house to complete 
                  key trade and manufacturing actions
    After a year in office, President Trump has repeatedly promised to 
crack down on unfair trade and negotiate reciprocal trade agreements. 
Yet, on many key issues, the administration's words have resulted in 
either inaction or confusion as to the path forward. A status quo 
approach means continued persistent trade deficits, lost jobs, theft of 
our innovation base, and the steady erosion of our manufacturing 
capacity and workforce.

        Currency Manipulation. The President repeatedly promised to 
label China a currency manipulator. However, China was not listed as a 
currency manipulator on either of the Treasury Department's first two 
Semiannual Reports on International Economic and Exchange Rate 
Policies.

        Section 232. The President initiated section 232 
investigations on steel and aluminum imports' impact on U.S. national 
security. However, long and unnecessary delays have made matters even 
worse as imports continue to surge. I will discuss this issue later in 
my testimony.

        Section 301. The President initiated a section 301 probe into 
China's intellectual property abuses, though since the August 2017 
announcement there has been little movement towards an action that 
protects American interests.

        Pipelines. In January 2017, the President called for a plan to 
require American pipelines to be constructed with American steel. More 
than a year later, there has been no action taken as imports of Oil 
Country Tubular Goods (OCTG)--a key energy product used in oil and gas 
extraction--were up nearly 200 percent in 2017.
        recommended actions for the administration and congress
    Outlined below are some of the issues AAM believes need to be 
addressed for the United States both to expand trade relationships in 
the Asia-Pacific region in a manner that increases domestic production 
and to ensure that our markets do not become flooded with unfairly 
traded products.

        Trade Enforcement. America's trade enforcement laws are the 
backbone of U.S. trade law and represent that last line of defense for 
workers facing unfair trade. Strict enforcement is vital to the 
preservation of a rules-based trading system--one in which American 
workers are not forced to compete against the endless resources of a 
foreign government that props up its state-run companies. Timely 
enforcement of U.S. trade remedy laws is vital to leveling the playing 
field for U.S. companies and American workers impacted by unfair trade 
practices--like dumping and subsidies. While our trade remedy laws help 
mitigate the damage, rarely do they restore all the lost jobs or make 
an impacted community whole again. Significant time and cost--and 
injury--is required to proceed with a trade enforcement case. In some 
cases, entire plants must be shut down before relief can be delivered. 
This makes no sense. We must ensure that timely and effective relief 
from such market distortions is available before plants are forced to 
close and workers lose their jobs.

         We greatly appreciate the leadership and work of this 
committee in the passage of the Trade Facilitation and Trade 
Enforcement Act of 2015, which provided new tools to speed trade 
enforcement and to crack down on evasion of existing trade orders. It 
is simply unfair to U.S. companies and their workers for trade remedies 
to be circumvented--resulting in further harm and larger trade 
deficits.

        Global Industrial Overcapacity. Many U.S. industrial sectors 
are suffering from unprecedented challenges due to global 
overcapacity--largely fueled by China--which dampens prices and has 
forced plant closures and massive layoffs. Despite slowing demand in 
the Chinese market, Beijing continues to maintain high levels of 
production with subsidies and other state support, undermining U.S. 
companies that compete based on market considerations. In fact, a 
recent report shows that, despite China's claims of capacity closures 
in 2016, its net steelmaking capacity actually increased.\7\ China will 
only respond, and America will only benefit, if there are enforceable 
mechanisms to ensure that Beijing is living up to its commitments. For 
the past 10 years, China has delayed concrete action with lofty 
promises to cut capacity that never materialize. Despite repeated 
public pronouncements dating back to 2009 of plans to aggressively cut 
capacity, China's steelmaking capacity has increased over 400 million 
metric tons, roughly equivalent to five times the total production of 
the U.S. steel industry in 2016. The G20 Global Forum on Steel Excess 
Capacity cannot be another tool to be used by the Chinese government to 
delay meaningful change.
---------------------------------------------------------------------------
    \7\ Wong, Edward. ``Greenpeace Links Beijing's Air Pollution Surge 
to Steel Factories.'' New York Times, February 16, 2017. Web, May 10, 
2017.

        Maintain China's Non-Market Economy Status. No one can 
seriously claim that Beijing runs a market economy, but the Chinese 
government desperately wants to be treated that way. Under U.S. law, 
China is and should continue to be treated as a non-market economy 
(NME). Any change to this status would severely undermine America's 
trade remedy laws and expose U.S. companies and American workers to 
more dumped imports. Such changes can only be made if China meets six 
specific criteria demonstrating that market forces, and not the 
government's party leadership, are directing the economy. Presently, 
China fails to meet the six criteria and it should focus on reforms 
rather than its attempts to shortcut this issue by way of the World 
---------------------------------------------------------------------------
Trade Organization (WTO).

        Cyber-Theft. It is critical that the government provide 
support when foreign interests steal trade secrets to manufacture 
products abroad and send them to the United States. Theft of 
intellectual property and trade secrets has been a serious problem with 
China. U.S. companies report that Chinese interests have not only 
stolen sensitive trade secrets, but that Chinese firms are now 
commercializing that valuable intellectual property into Chinese 
products. It is outrageous that U.S. companies are being forced to 
compete against the very products that they spent years and significant 
financial resources to develop. If the available trade enforcement 
tools--including section 337 of the Tariff Act of 1930--do not work as 
intended, Congress should improve them so that our companies are not 
subjected to dishonest and criminal activity without the opportunity to 
seek effective and timely relief. And, the President should swiftly 
complete his section 301 investigation and take meaningful action to 
defend domestic companies against foreign theft of intellectual 
property and technology transfer.

        State-Owned Companies. China has many state-owned and state-
directed enterprises (SOEs) that send dumped and subsidized goods into 
the U.S. market. In a disturbing trend, China's SOEs are also now 
aggressively seeking to invest here in America, putting further strain 
on U.S. firms that make decisions based on market forces. It is vital 
that we strengthen our CFIUS system of reviewing foreign acquisitions 
of strategic U.S. companies and operations so that they do not fall 
under the control of the Chinese government.

        Currency Manipulation. China, Japan, South Korea, and other 
major trading partners have a long history of currency manipulation, 
which contributed to the loss of 5 million U.S. jobs.\8\ Despite claims 
that the yuan is no longer undervalued, there is ample evidence that 
Beijing continues to play an active, daily role in setting exchange 
rates. We urge the passage of legislation to treat foreign currency 
manipulation as a subsidy under trade remedy laws. And, we support the 
inclusion of strong, enforceable rules in trade agreements to deter and 
penalize currency manipulation. We will also be closely watching as the 
administration prepares to release yet another Semiannual Report on 
International Economic and Exchange Rate Policies, due by April 15th.
---------------------------------------------------------------------------
    \8\ Peterson Institute for International Economics.

        Automobiles and Rules of Origin in Trade Agreements. A trade 
agreement's rules of origin determine the national source of a product. 
This is important because only those countries bearing the risks and 
responsibilities of signing an agreement should obtain its benefits. We 
believe the rule of origin on automobiles in NAFTA and other trade 
agreements should be strengthened, so that workers in signatory 
countries can enjoy more of the benefits, while minimizing the 
advantages of non-participating countries. In the context of the NAFTA 
negotiations, automobiles and auto parts from countries such as Japan, 
South Korea, and China, all of which heavily protect their own 
industries, should not be permitted to displace North American 
production through rules of origin that are set too low. As it relates 
to KORUS, more work must be done to open the Korean market--one of the 
most difficult for our automakers to export into despite the signing of 
a trade agreement intended to open the market.
           it's time to act on the section 232 investigation
    Last, but certainly not least, I want to focus your attention to 
the pending section 232 investigations on the impact of steel and 
aluminum imports on U.S. national security. In April 2017, President 
Trump directed the Department of Commerce to complete these self-
initiated investigations under an expedited timeline, saying, 
``Maintaining the production of American steel is extremely important 
to our national security and our defense industrial base. Steel is 
critical to both our economy and our military. This is not an area 
where we can afford to become dependent on foreign countries.'' In 
late-May 2017, the administration said the reports would be released in 
June and, just days later, the President himself publicly said the 232 
reports would be coming ``very soon'' and that ``we're going to stop 
the dumping.'' In early June, President Trump added, ``Wait until you 
see what I'm going to do for steel and for your steel companies. . . . 
We're going to stop the dumping, and stop all of these wonderful other 
countries from coming in and killing our companies and our workers. 
You'll be seeing that very soon. The steel folks are going to be very 
happy.''

    Despite those assurances, months passed without a clear 
understanding of when the investigations would be completed. American 
workers were told that the administration needed to complete tax reform 
and other legislative priorities before it could again focus on the 
section 232 investigations. All the while, the import problem has been 
worsening for American workers and U.S. companies. Steel imports soared 
21 percent in the 3 months after President Trump announced the section 
232 investigation compared to the 3 months before. Overall, total steel 
imports were up 15.4 percent in 2017.\9\
---------------------------------------------------------------------------
    \9\ ``Steel Imports Up 15 Percent in 2017.'' American Iron and 
Steel Institute, January 26, 2018. Web, February 12, 2018.

    We recently received the painful news that several steel mills in 
Pennsylvania would be reducing operations, including one that produces 
armor plate for the U.S. military and played an important role in 
supporting the production of armored vehicles to protect our service 
men and women from IED attacks in Iraq and Afghanistan.\10\ Meanwhile, 
the United States is now down to a single manufacturer of the steel 
needed for America's essential electric grid--grain-oriented electrical 
steel (GOES). Unfortunately, there are no shortage of threats--both 
natural and manmade--that could damage or destroy this critical 
infrastructure. Already reduced to just one domestic producer of GOES, 
electrical steel imports increased by 101 percent in 2017. But, it's 
not just a China problem. Electrical steel imports from Japan, China, 
and South Korea are up a staggering 156 to 269 percent. Without broad 
action to prevent the loss of this domestic production capability, the 
United States would be entirely dependent upon foreign suppliers.
---------------------------------------------------------------------------
    \10\ http://chestertontribune.com/Business/
arcelormittal_closing_part_of_pa.htm.

    Our national security rests on a healthy industrial base. Domestic 
production of steel and aluminum are vital in the manufacture of 
America's military and critical infrastructure, including everything 
from ships and tanks to bridges and energy infrastructure. If domestic 
manufacturing capabilities deteriorate further, we may be forced to 
rely on countries like China and Russia to supply steel for our 
---------------------------------------------------------------------------
military and critical infrastructure needs. We cannot let that happen.

    The President now has up to 90 days to determine what precise 
action to take. But, there's absolutely no reason to take that long. He 
should take bold action today to protect our national security and 
American jobs.
                american-made infrastructure investment
    Federal investment in infrastructure is critical to a well-
functioning economy and our national competitiveness. U.S. 
manufacturers benefit from infrastructure investments not just because 
they generate new demand for steel, but also because an efficient 
infrastructure network improves their ability to bring goods to market. 
We desperately need to identify solutions to the funding challenges 
that stand in the way of addressing the backlog of repairs to our 
Nation's highways, water systems, and other critical infrastructure. 
According to a Duke University report entitled Infrastructure 
Investment Creates American Jobs, America has 156,000 deficient 
bridges, an investment backlog of $85.9 billion for our Nation's roads, 
and $200 billion in lost economic activity annually from inefficient 
rail transportation.

    Too often the focus of infrastructure has been on ``shovel ready'' 
projects, which unfortunately has meant that larger projects that are 
essential to our steel sector have not moved forward. A prime example 
is the Soo Locks system that allows ships to move between Lake Superior 
and the rest of the Great Lakes. The larger of the two locks, the Poe 
Lock, is nearly 50 years old and the only lock that can accommodate 
larger vessels that make up almost 70 percent of the potential capacity 
of the Great Lakes fleet. A recent report by the Department of Homeland 
Security found that if the Poe lock were to shut down for 6 months, the 
Nation would experience economic hardship as mines and steel mills 
experienced supply chain disruptions, causing a ripple effect 
throughout the manufacturing sector that could impact as many as 11 
million workers. Depending on when such a failure occurred, as much as 
75 percent of U.S. steel output could go offline in a matter of weeks. 
Building a second Poe-sized lock would cost $580 million, but would 
spur $1.7 billion in economic activity.
          strong buy america policies create jobs here at home
    Buy America policies are procurement preferences for iron, steel, 
and manufactured goods that are ``produced in the United States.'' 
These preferences apply to Federal infrastructure programs, ensuring 
that U.S. companies and American workers have the first opportunity to 
supply the materials used to build our highways, rail, airports, water 
systems, and other critical infrastructure. Strong Buy America laws 
maximize the return on the Nation's investment in our infrastructure 
and are consistent with our international obligations.

    I want to offer several recommendations as Congress moves closer to 
a debate on infrastructure:

        Include Buy America in the infrastructure package. As Congress 
looks to funding solutions, it is necessary to ensure that new funding 
mechanisms--including public-private partnerships or other new 
innovative financing tools--are covered with strong Buy America rules. 
Despite his frequent campaign rhetoric on the issue, we were 
disappointed to see that President Trump's recently released 
infrastructure plan made no mention of Buy America. In fact, it goes in 
the completely opposite direction, proposing to weaken existing 
applications, resulting in tax dollars going overseas to purchase 
foreign steel for our infrastructure needs.

        Apply Buy America where it doesn't exist. There are many 
infrastructure spending programs that are not covered by a Buy America 
preference. We support a top-to-bottom review of all infrastructure 
spending programs and enacting Buy America laws where they are absent. 
An example of this is the Drinking Water State Revolving Fund (DWSRF), 
which is covered by a temporary Buy America provision. Without action 
to make this provision permanent, our Nation's drinking water 
infrastructure investments will be open to steel and iron from China 
and other countries. We cannot let this happen.

        Close loopholes and improve existing laws. We should also work 
to close loopholes, strengthen weak agency enforcement, and reduce the 
number of unnecessary waivers granted. Bipartisan support in recent 
transportation bills resulted in language to prevent project 
segmentation and increase transparency of the waiver process.

        Reject efforts to weaken Buy America by supporting the 
``Melted and Poured'' standard. For 35 years, the foundation of our Buy 
America laws has been the requirement that all steel manufacturing 
processes occur in the United States for a product to be Buy America 
compliant--from the actual steel production to the finishing processes. 
Regrettably, a few companies whose business model focuses on importing 
foreign steel are aggressively lobbying to create a massive Buy America 
loophole that would allow steel from Russia, China, or other foreign 
sources to qualify as ``produced in the United States.'' This massive 
outsourcing loophole should be rejected outright. Steel is made here 
only if it is melted here.
               no more outsourced infrastructure projects
    I want to highlight several high-profile infrastructure projects 
that have found ways to evade Federal Buy America laws. In each case, 
public resources bypassed U.S. companies and American workers and, 
instead, supported jobs in China and other foreign countries.

        San Francisco-Oakland Bay Bridge. Completed in 2013, 
California State officials used clever accounting gimmicks to bypass 
Federal Buy America laws for the construction of the Bay Bridge. They 
thought that using Chinese steel would net them $400 million in savings 
to the overall project. Rather, the project was plagued with quality 
issues and cost overruns, all while thousands of jobs were created in 
China instead of here in the United States. The project was a decade 
behind schedule and nearly $4 billion over budget.

        Verrazano-Narrows Bridge. In 2013, New York State officials 
decided to source 15,000 tons of steel, including the fabrication work, 
from China for the bridge deck replacement at the Verrazano-Narrows 
Bridge. In shocking fashion, the Metropolitan Transportation Authority 
(MTA) awarded the contract to a Chinese state-owned company that had 
never done such work. MTA used a very specific fabrication design, 
called orthotropic decking, and used it as an excuse to bypass U.S. 
companies and workers ready to rebuild the bridge.

        LaGuardia Airport. Early last year, it was reported that 
Chinese and other foreign-origin steel is being used in the $4-billion 
LaGuardia Airport renovation. While the project does not appear to be 
covered by a Federal Buy America law, it is notable that the Port 
Authority of NY and NJ has received $76 million in Federal FAA grants 
for improvements at LaGuardia in just the last 10 years. These funds 
require U.S.-melted steel to be used. And, the Port Authority will 
finance the LaGuardia project with $1 billion in Passenger Facility 
Charges (PFCs).
                               conclusion
    Thank you for the opportunity to testify today. We look forward to 
working with you to advance policies that will revitalize America's 
manufacturing sector--a major economic driver, foundation of U.S. 
national security, and source for millions of 
family-sustaining jobs. Together, we can Keep It Made in America.

                                 ______
                                 
         Prepared Statement of Todd Young, Managing Director, 
          Government Affairs, United States Steel Corporation
    Thank you for conducting today's hearing in western Pennsylvania 
and inviting testimony from United States Steel Corporation, which is 
proudly headquartered in Pittsburgh, still known far and wide as The 
Steel City. Senator Casey's leadership in convening this forum on trade 
law enforcement and improving America's infrastructure is very much 
appreciated. Both of these topics are public policy priorities for 
America's steelmakers.

    U.S. Steel was founded in 1901 and is the largest integrated steel 
producer headquartered in the United States, with domestic annual raw 
steelmaking capability of 17 million net tons. U.S. Steel manufactures 
semi-finished steel as well as a wide range of value-added flat-rolled 
and tubular products for the automotive, appliance, container, 
industrial machinery, construction, and oil and gas industries. Our 
major domestic steel operations are located in the Commonwealth of 
Pennsylvania, home to our Mon Valley Works, compromised of the Edgar 
Thomson, Irvin and Clairton plants east of Pittsburgh, and the Fairless 
Plant near Philadelphia; in the State of Indiana, with our Gary Works 
in Gary, our Midwest Plant in Portage, and tin operations in East 
Chicago; in the State of Michigan, with our Great Lakes Works located 
in Ecorse and River Rouge near Detroit; and in the State of Illinois, 
at our Granite City Works east of St. Louis, MO. Our tubular operations 
are located in: Fairfield, AL; Lorain, OH; Pine Bluff, AR; and multiple 
locations near Houston, TX. Our two iron ore operations in Minnesota 
are located in Mt. Iron and Keewatin. These mines supply iron ore 
pellets to all our steelmaking operations, as well as to third parties. 
U.S. Steel is also involved in several steel finishing joint ventures 
in the United States.

    U.S. Steel is a leader in both process and product technology and 
has three domestic research and development facilities dedicated to 
advancing the boundaries of steelmaking: the Research and Technology 
Center in Munhall, PA; the Automotive Center, a research and sales 
facility in Troy, MI; and the U.S. Steel Tubular Products Innovation 
and Technology Center in Houston, TX.
                           trade enforcement
    Over the past several years, America's steel companies and workers 
have been challenged by significant, persistent unfairly traded imports 
flooding our markets. Steel at dumped prices and subsidized by foreign 
governments targets our open markets. As a result, many American steel-
making facilities have been forced to shutdown temporarily or even 
permanently causing thousands of hard-working, highly skilled Americans 
to lose their jobs. American steel companies can compete and win 
against any other producers around the world on a level playing field--
yet that requires fair enforcement of our trade laws and strong, prompt 
action by the Federal Government.

    We commend Congress on passing the 2015 Leveling the Playing Field 
Act, which significantly strengthened U.S. trade remedy law by 
clarifying the injury standard for the International Trade Commission 
in antidumping and countervailing duty--or AD/CVD--cases and providing 
the Commerce Department with additional tools to address dumped and 
subsidized imports. This strengthening of the trade law was the result 
of forceful, bipartisan leadership by steel champions in both the House 
and Senate.

    Passed by Congress a few months later yet effectively in tandem 
with the Level the Playing Field Act, we applauded enactment of the 
2016 Trade Facilitation and Trade Enforcement Act, especially the 
Enforce and Protect Act contained therein which provided U.S. Customs 
with new tools and directives to aggressively enforce U.S. trade remedy 
orders and crack down on duty evasion and customs fraud. It was 
critical that this second law followed as AD/CVD orders only level the 
playing field if they are strictly and effectively enforced.

    U.S. Steel and other domestic producers moved swiftly in utilizing 
these new laws by filing a series of new AD/CVD petitions on a flood of 
unfairly traded imports of hot-rolled, cold-rolled, and corrosion-
resistant steel from 12 countries in the summer of 2015. Solely through 
subsidies and rock-bottom prices--many times below the cost of 
production--these imports captured significant U.S. market share at the 
direct expense of American steel mills and workers. As a result of 
those investigations, however, and due in large part to the new laws, 
the domestic steel industry was able to obtain 28 new AD/CVD orders on 
11 countries,\1\ many with commercially meaningful duties. This 
provided U.S. Steel and American producers with critical relief.
---------------------------------------------------------------------------
    \1\ Hot rolled--Australia, Brazil, Japan, Korea, Netherlands, 
Turkey, and UK; cold-rolled--Brazil, China, India, Korea, Netherlands, 
and UK (*negative on Russia); and corrosion-
resistant--China, India, Italy, Korea, and Taiwan.

    Though these recent flat-rolled orders stemmed the tide of unfairly 
traded imports from the targeted countries, an all-too-familiar story 
unfolded--low-priced imports surged in from other countries not covered 
---------------------------------------------------------------------------
by U.S. AD/CVD orders.

    For example, even before the orders were in place, imports of cold-
rolled and 
corrosion-resistant steel from Vietnam replaced imports from China 
nearly ton-for-ton. As a result, U.S. Steel and other domestic 
producers filed circumvention petitions with the Commerce Department in 
September 2016, arguing that U.S. imports of Chinese steel finished in 
Vietnam should be covered by the AD/CVD orders on imports from China. 
The Commerce Department's December 2017 preliminary affirmative 
circumvention finding represents a critical step toward shutting down 
one of the many paths used to flood the U.S. with dumped and subsidized 
steel. This decision is an encouraging sign for the steel industry and 
should put other countries and foreign producers on notice that 
circumvention will no longer be tolerated.

    The job is far from done, however. Our trade laws simply take too 
long to provide relief from unfairly traded imports, and by the time 
relief often comes, foreign steel companies have moved locations and/or 
devised sophisticated plans to evade or circumvent any relief.

    For example, in 2014 we obtained AD/CVD orders on oil country 
tubular goods--or OCTG--from Korea and have obtained higher and higher 
AD duty rates in each administrative review. Dumped OCTG imports from 
Korea, however, have continued to surge into our market due to, among 
other things, subsidized steel and electricity and Korean government-
directed reimbursement of AD duties. These practices not only thwart 
the remedial purpose of U.S. antidumping law, but they also threaten 
the U.S. OCTG industry, which is integral for the development of U.S. 
energy resources and infrastructure (including petroleum refineries, 
oil and gas pipelines, off-short rigs, and storage tanks). America 
cannot achieve national energy security and independence if our ability 
to harness our own abundant resources becomes reliant on foreign steel 
from unstable regions of the world.

    In addition to the reliance on American steel of critical 
infrastructure and energy independence, the U.S. military relies on 
steel to protect our troops in conventional and unconventional wars, 
from armor for tanks, ships, and submarines to engines, gears, 
bearings, and bodies of the F-35 Joint Strike Fighter and other 
aircraft. When called upon during World War II, U.S. Steel produced, 
among other things, 90 percent of the steel used to make over 21 
million helmets. And we invented the landing mat, to project our 
airpower wherever and whenever required. Today, U.S. Steel produces the 
hot-rolled steel that Stupp Corporation uses to produce Mk82, Mk83, and 
Mk84 bomb bodies for the Department of Defense.

    Our national security is only as strong as our country's ability to 
produce steel from beginning to end within our Nation. That is why we 
urge President Trump to complete the section 232 national security 
investigation of steel imports initiated last April. The unrelenting 
and growing barrage of unfairly traded steel entering our market leaves 
no doubt that imports are threatening our national security. The law 
provides the President with broad power to implement remedies under 
section 232, and we believe the threat posed to America's steelmaking 
capacity merits aggressive action by President Trump. The needed remedy 
must be comprehensive and broad-based, covering the full range of steel 
products--including semi-finished products such as slab--and all 
producing countries, with only limited exceptions for products not 
currently available in the United States. Comprehensive section 232 
remedies would allow American steel producers to restart idled 
capacity, rehire thousands of steelworkers, and significantly 
strengthen our economy, steel industrial base, and national security.

    Significant progress has been made on strengthening trade 
enforcement and utilizing new and little-used enforcement tools. We 
look forward to continuing to work with Congress and the administration 
to further strengthen U.S. trade law enforcement so that no more 
American steel mills are shuttered, no more American steelworkers are 
laid off, and the American steel industrial base and national security 
are no longer threatened by unfairly traded imports or foreign 
governments.
                             infrastructure
    For a steel maker, investment in infrastructure is both a necessity 
and an opportunity. Efficient, reliable transportation directly impacts 
both our ability to move millions of tons of raw materials and finished 
product, and our overall competitiveness as a company and industry. 
Long-term investment to improve our transportation, water, energy, and 
other critical infrastructure also creates direct demand for steel and 
enables broad economic growth and job creation that further drives 
steel demand in more consumer-oriented markets like appliances, cars 
and trucks, and more.

    As the national discussion on how best to invest in infrastructure 
advances, we encourage a focus on three priorities: increased, long-
term investment; project streamlining; and maintaining the commitment 
to Buy America. Long-term funding is essential to undertaking the 
large-scale projects needed to modernize and expand our transportation 
infrastructure. In addition, responsible regulatory reform that 
significantly shortens the permitting and approval process for project 
delivery will lower costs and deliver results sooner to system users. 
As we invest in America, there must also be an expanded commitment to 
the long-standing principle that the iron and steel used to rebuild our 
Nation's infrastructure should be produced--melted and poured--in the 
United States.

    We sincerely appreciate the opportunity to join today's hearing and 
to provide perspective to the subcommittee on two priorities of 
fundamental importance to U.S. Steel and our country. We stand ready to 
support and assist your important work.