[Congressional Record Volume 148, Number 18 (Wednesday, February 27, 2002)]
[House]
[Pages H625-H632]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AMERICAN STEEL INDUSTRY CRISIS
The SPEAKER pro tempore (Mr. Kirk). Under a previous order of the
House, the gentleman from Pennsylvania (Mr. English) is recognized for
60 minutes.
Mr. ENGLISH. Mr. Speaker, America is at a critical moment. The
domestic steel in its industry and the current workforce retirees and
their dependents are clearly at a vital crossroad. Without strong
relief under the section 201 action that this administration has called
forth utilizing that section of our trade laws, the future of the
industry is clearly grim. Thousands of steelworkers already have lost
their jobs, and thousands more jobs are at stake. Beyond that, pension
and health care benefits are in jeopardy for hundreds of thousands of
retirees. Now is the time to provide relief for this beleaguered
domestic industry.
The Bush administration took the vital first step by initiating the
201 investigation, and now the results are in. The investigation
demonstrated what the industry and its workers have known all along,
the rest of the world is not playing by the same set of rules. Meaning,
the steel score sheet has long been skewed to provide foreign
competitors with an unfair handicap, making it unnecessarily difficult
for U.S. producers to compete. That has to stop.
Mr. Speaker, this may be hard for people to see up here, but let me
assure you that the subsidies our domestic
[[Page H626]]
steel companies have received since 1980 are dwarfed by the subsidies
that foreign steel makers receive.
Looking at this graphic, this minuscule yellow bar down here
represents the U.S. government subsidies, while this tower next to it
represent the $90 billion in subsidies our leading competitors have
received since 1980 in the steel sector. The amount of subsidies to
foreign producers have outnumbered and outshone by those in the U.S. by
a factor of more than 8 to 1. Substantial relief under section 201 is a
move toward eliminating that handicap as well as others, putting the
U.S. on a level playing field and staving off a permanent liquidation
of this strategic industry.
Inaction or weak action would silence many steel plants, while
destroying the livelihood, the good-paying jobs of the workers, their
families and communities, and dealing a blow to our national economy
and to our national security.
I applaud the Bush administration for stepping up to the plate for
the American steel industry and its workers, something that previous
administrations had been reluctant to do.
With that, I urge the Bush administration in the next week in making
a decision on this steel 201 to knock the ball out of the park by
imposing credible tariffs over the next 4 years.
There will be a number of speakers joining me tonight. The first of
these is the gentleman from Illinois (Mr. Shimkus), and I yield to him.
Mr. SHIMKUS. Mr. Speaker, I want to thank my colleague, the gentleman
from Pennsylvania (Mr. English), for his work on this and for his work
for his constituents in Pennsylvania.
We have would not be here if the President had not invoked section
201; and we would not be here if the ITC, the International Trade
Commission, had not found in essence in our favor that there has been
some illegal dumping.
We hear a lot on trade, and a lot of the debate stems around free and
fair trade. I think it is pretty clearly evident that when trade is not
fair then we need to do just what we did in this case so far. What we
have done so far is asked for a section 201 hearing that has been found
in our favor, and now the administration has to finish the deal. They
have a deadline of March 6 in which they are going to recommend the
type of penalties that this country would like to see to get our steel
industry back on sound footing; and, as with every other issue, there
is always a debate of what those penalties should be.
Well, the Steel Caucus, which the gentleman chairs and which we have
many members of, have tried to weigh in on this. We have sent a letter
to President Bush asking for a minimum of 40 percent tariff to be
implemented over 4 years on all imported steel products. That is what
we can do now, and I am glad to have signed that letter and sent that.
But I also had a chance to personally speak with Secretary Evans on
this issue and reiterate the importance of some strong, strong
penalties, not only to help our domestic steel industry, but it sends a
signal to the rest of the countries that we want to trade and do
business with. We can compete with them. We cannot compete with them if
they have subsidized their production, and that is what they do by a
term called dumping, which means foreign countries are selling steel to
us at below-market prices, usually subsidized by their own government.
The International Trade Commission's ruling, they said that we in our
domestic steel industry suffered serious injury due to the surge in
imports. So that is why we need a substantial tariff for a maximum
length of time, because the majority of steel that is making its way to
America from off shore is being heavily subsidized.
The imposition of tariffs over a 4-year period will demonstrate to
foreign producers and governments that this administration is serious
about addressing the problem of foreign excess steel capacity. And it
is kind of ironic that our European allies, from what I understand, are
not supportive of our heavy tariffs because they fear that if we are
successful then they will be the target for the illegal dumping of
steel and then they will have to deal with this issue.
So we need to make sure that our allies and friends understand that
steel is also a national security issue and it is important for us to
have that domestic capability.
The administration must take this lead in developing a plan to
address the critical legacy costs which are preventing the industry
from restructuring. The progress of the President's comprehensive steel
strategy demonstrates once again his strong, decisive leadership on
behalf of America, American workers and American families. It is now
time to take the next step and implement a remedy that would be
advantageous to the U.S. steel industry. I am confident that this
Congress working with this President will provide help for those who
have lost their jobs and benefits as a result of the bankruptcy of the
steel industry.
The 40 percent tariff that we suggest would bring the domestic steel
industry back to a level playing field with foreign competitors and
hopefully bring an end to the steel crisis in our country, not only for
the factory itself, but for the workers, and not just for the current
day workers but for the retirees.
I appreciate all the gentleman from Pennsylvania (Mr. English) has
done on this behalf since the day he arrived here. We have made great
inroads in working it together across the party lines and the caucus.
And I am really proud of what the President has done with this issue.
Now we want to him finish the job and get the work done.
Mr. ENGLISH. Mr. Speaker, I want to thank the gentleman, and I want
to thank him for his personal involvement, for his work with the
administration, for helping to bring there issue to the fore, at a
very, very critical time when we can still save our domestic steel
industry. I thank him for being involved in the Steel Caucus.
Mr. Speaker, I yield to another gentleman from Illinois (Mr. Phelps),
who is also a member of the Steel Caucus.
Mr. PHELPS. Mr. Speaker, I thank the gentleman from Pennsylvania (Mr.
English).
I first want to commend the gentleman on his firm leadership in
bringing this issue to the forefront of the American people. Those who
are not associated with the steel industry may not be aware just how
serious this situation is, and I want to associate my remarks with my
friend and colleague, the gentleman from Illinois (Mr. Shimkus). We are
fighting the same battle.
Let me state, Mr. Speaker, I rise to discuss the crisis the steel
industry faces. The American steel industry and the steelworkers are in
the midst of possibly the worst crisis ever due to the continued
illegal dumping into this country of foreign-made steel.
Thousands of steelworkers have lost their jobs, and countless more
are in jeopardy. In my congressional district in Central and Southern
Illinois the effects have been devastating. Yesterday, I attended a
steel rally in Greenwich City, Illinois, and was able to hear firsthand
the effects this has had on the local economy.
Now is the time to institute the highest tariff levels of at least 40
percent if the steel industry is to recover.
Last year, the President directed the International Trade Commission
to undertake one of the most extensive and complex investigations into
the section 201 history. I applaud the President for this leadership,
very much needed assistance for an ailing industry. The International
Trade Commission ruled unanimously that nearly 80 percent of the
product lines of the American steel industry have been seriously
damaged by surges of low-priced foreign imports. The most severe
violations of U.S. trade laws have taken place since 1998.
The devastating impact that low-priced steel imports have had on
American steel companies is amply evident; and, as a result of foreign
dumped steel since 1998, 31 steel companies have filed for bankruptcy
nationwide. Of these, four are located in my home State, Illinois,
which has caused over 5,000 Illinois steelworkers to lose their jobs.
The International Trade Commission has recommended the President
impose tariffs of up to 40 percent on a broad variety of steel products
over a 4-year period. I strongly urge the President to impose the
highest tariff rate for 4 years on all subject steel categories as the
first step in saving our American steel industry and the jobs and the
health insurance of Illinois steel makers and over 50,000 retirees in
Illinois.
The domestic steel industry has invested billions of dollars in
upgrading
[[Page H627]]
and modernizing its facilities and, as a result, is among the most
productive makers of high-quality steel in the world. No industry, no
matter how productive, however, can compete against the onslaught of
low-priced and often unfairly traded steel imports. It is imperative we
send the strongest possible message to deter our trading partners from
further illegal dumping and to give the domestic steel industry the
time it needs to recover from its injury. Anything less would be a
disservice to those working men and women who are counting on
government to stand up for them.
In this body last year we have deliberated several trades issues and
even this year. Some are disagreed upon and some have total agreement,
and it is not even by party lines. Unfortunately, it is by
geographical, cultural differences, many times, rather than party line.
And we have a healthy debate. One was such as permanent normal trade
relations with China. The reason I resisted that proposition and
opposed it is that in my 19th District in Illinois we are exporting
jobs because of trade policies such as free trade and the P.N.T.R.
motion that we looked at and debated on this floor.
{time} 1945
I know that many people have stock in the fact that this will help
us, our country; but I say right now, in the 19th district, that is
just the opposite case.
We had 10 years of China breaking their word, violating their
contracts with this country on items that left us $82 billion in trade
deficit. Now, the reason I mention that is in this context. One blow
after another to the American worker is adding to a serious situation
not only of our economy but the quality of products that we produce
even for our defense system; and that borders on compromising our
national security.
I yield back to the gentleman and thank him for his courtesy.
Mr. ENGLISH. I thank the gentleman, and I will resume making some of
the points I had been making; and then, in a few minutes, I will
recognize another member of the steel caucus, the gentleman from Ohio
(Mr. Brown), who has been a leading advocate of this cause.
Summarizing the last two speakers, it is clear that the International
Trade Commission has given the Bush administration the tool that it
needs to get action. Tariffs in the range of 40 percent are clearly
needed if the industry is to recover. But, Mr. Speaker, we recognize
the March 6 decision is only the first inning; 201 action must be
followed by a concrete commitment from our trading partners to reduce
inefficient global overcapacity.
Again, I have to congratulate the President for his understanding of
the issue and his foresight in initiating the OECD talks. Beyond that,
we must look at ways to address the industry's legacy costs, clearing
the way for a domestic steel renaissance. Continued cooperation between
Congress and the Bush administration is the only way of ensuring the
viability of the domestic steel industry.
Let us think a minute about the fundamental causes of this crisis. In
my view, one of the underlying causes is a massive foreign inefficient
overcapacity. Looking at this graphic, as my colleagues can see, from
1998 to 2000 the United States consumed 131 million metric tons of
steel, while the former Soviet Union, which is NIS on that graphic,
alone produced 114 million metric tons. The entire foreign excess raw
steelmaking capacity averaged 268 metric tons, which is more than twice
the level of average U.S. steel consumption. Massive foreign steel
overcapacity, created and sustained by abusive government subsidies,
protected markets and anticompetitive practices, resulting in a
diversion of excess steel products into the U.S. market.
Going to the next graphic, it is obvious that raw steelmaking
capacity has greatly exceeded steel consumption in many areas of the
world during the last 3 years. Again, the former Soviet Union is
producing more than 120 million metric tons of steel than it needs.
Even Brazil is producing almost 20 million more metric tons of steel
than it needs for domestic consumption. And make no mistake, the excess
production is being dumped in our domestic market. And they say it is
our fault.
Mr. Speaker, a key point to understand is that American steel
companies and their workers have already done their part to create a
world-class competitive industry during recent years. They have
invested more than $60 billion in steel plant modernization since 1980
to become among the most productive steel producers in the world with
as few as 1\1/2\ man hours needed per ton of steel produced. To achieve
these advances in productivity, the U.S. steel industry reduced
capacity by more than 23 million tons, closed numerous inefficient
mills, and significantly cut jobs. The workers have endured their fair
share of economic pain and sacrifice as the workforce was reduced by
hundreds of thousands of workers in an effort to become the most
efficient producers of steel.
As this graphic reflects, U.S. productivity measured as output-per-
worker has nearly tripled since 1980, according to the U.S. Commerce
Department. These are the official statistics. The industry average has
gone from using 10 man-hours to produce a ton of steel to just 4, all
the while the net shipments of steel have grown from just over 90
million tons to 110 million tons. That is extraordinary. But when
competing with the unfair trading practices of our foreign competitors,
it is simply not enough. Much of the world's major steel markets have
formal steel import barriers to foreign steel or are subject to
international market-sharing arrangements by foreign steel exporters.
These cartels are aimed at us.
Obviously, Mr. Speaker, the steel industry is the victim of predatory
trade practices, and we desperately need strong relief under section
201 of the U.S. trade laws. This is allowable under the WTO rules. In
this case, the International Trade Commission determined damage has
occurred and made recommendations for tariffs to the President. The
March 6 deadline for the Bush administration to make a decision is fast
approaching. I call upon the President to recognize the needs of our
domestic industry. Significant relief is necessary in order to return
steel prices to their normal precrisis levels and allow American steel
companies to make the necessary investments to remain viable and
competitive in the future while providing good paying jobs.
Tariff rates must be substantial in order to ensure that import
prices return to market-based levels. The section 201 remedy must be
enforced for at least 4 years to allow the domestic steel industry to
make the necessary adjustments to be competitive. A shorter duration, I
feel, will simply be ineffective.
Section 201 relief must not replace existing orders under the
antidumping and countervailing duty laws. If these orders are set
aside, hard won as they are, any remedy will be perversely rewarding
those foreign producers that engage in unfair trade. That is something
that I would think we all would agree we do not want.
To further these remarks, I would like to yield to the gentleman from
Ohio (Mr. Brown), a member of our caucus, a gentleman who has been very
involved in the steel issue from the get-go.
Mr. BROWN of Ohio. Mr. Speaker, I thank the gentleman for yielding to
me and for his leadership on steel issues as American workers and
corporations try to fight back against this terrible situation that we
have seen coming for the last 3 or 4 years.
The U.S., as we know, has become the world's steel dumping ground,
costing U.S. jobs, hurting U.S. families, and damaging the U.S.
economy. During the 1998 steel crisis, the trade deficit in steel was
almost $12 billion, accounting for nearly 7 percent of our overall
trade imbalance. We have known from other Special Orders in this body
and from other debates in this body that legislation like NAFTA, GATT,
which formed the World Trade Organization, PNTR, giving special trading
privileges to China, and Fast Track legislation, which passed this body
by one vote last year, that this body of trade law that this Congress
in my mind has wrongly passed, has damaged this country and that has
put us in this situation where we have these huge trade deficits. And
our steel deficit is one of the major parts of that.
That means that we are buying a lot more steel in this country than
we are exporting, $11.7 billion worth. The bulk
[[Page H628]]
of these imports in steel were subsidized by foreign governments and
illegally dumped below market prices in the United States. Under
Federal trade law, and international trade law too, it is illegal to
subsidize a product through a variety of different means that
governments do and then sell it under cost into another country,
thereby undercutting that domestic industry's products.
Today, we import 39 million tons of steel, more than double the
amount we imported in 1991, and steel prices are below 1998 levels. The
surge in illegally dumped steel has obviously been incredibly damaging
to the domestic steel industry. Since 1998, 26 steel companies have
filed for bankruptcy, 17 in the last year. That includes three in my
State, including LTV in Cleveland, including RTI in Lorain, where there
is a major plant in Lorain and the community which I call home.
Steelworkers from LTV and RTI are learning firsthand how unfair
competition is destroying America's ability to make steel. The White
House and the Congress must respond. Congress must pass H.R. 808, the
Steel Revitalization Act. It has bipartisan cosponsors, the gentleman
from Pennsylvania (Mr. English), the gentleman from Illinois (Mr.
Phelps), who was here earlier, and 200-plus Members of this body who
have cosponsored that bill.
The Republican leadership, the gentleman from Texas (Mr. DeLay), and
others, have refused to schedule it for a floor vote. It would make all
the difference in the world in revitalizing this Nation's steel
industry. Because this Congress has failed to act, because the
Republican leadership in this Congress has not given the means to even
allow us to have a vote on these very crucial issues to protect
American steel, it is up to the President.
On March 6, the President will announce his decision on the
recommendation of the International Trade Commission for tariffs on
illegally dumped steel. We need a strong response. As the gentleman
from Illinois (Mr. Phelps) and others have said, we need a 40 percent
tariff, which is what the ITC has recommended, if the President goes
along.
A year and a half ago we heard Vice President Cheney, while in
Weirton, West Virginia, say we will never lie to you. If our trading
partners violate trade laws, he told steelworkers, we will respond
swiftly and firmly. We need the administration's swift response; we
need their firm response on steel dumping now more than ever.
If they are sincere about helping steel, and I take them at their
word, although there has been a pretty big delay in the President
acting, he was originally supposed to act in mid-February, and every
day the President fails to act, every day of delay causes more duress
to the American steel industry, more layoffs, more bankruptcies, and
more likely failed steel companies; but taking the President at his
word, we call for him to do the 40 percent tariffs for 4 years.
Anything less simply will not cut it.
It does not mean 40 percent with hundreds of exceptions, as
steelworker president Mr. Leo Gerard told the gentleman from
Pennsylvania (Mr. English) and me and some others this afternoon. We
must protect the 700,000 hard-working families who rely on this
industry for their salary, for their pensions, for their health
benefits, and all of us who rely on this industry for our national
security.
The steelworkers at Weirton Steel, where then Vice Presidential
candidate Cheney made, I hope, a genuine promise, and to the workers at
RTI in Lorain, in Canton, in Madison, Ohio, the workers at LTV in
Cleveland, and all over this country, are absolutely counting on the
President to do the right thing to stop these unfair trade practices.
Since this President took office, we have lost a million industrial
jobs in this country. I wonder how many workers must file for
unemployment before President Bush and Vice President Cheney honor
their campaign pledge, not to do this half-baked, but to do the full 40
percent. More and more Americans are joining the ranks calling for
Washington to assist this industry.
Again, we ask for Republican leadership here to move on H.R. 808. It
clearly will pass this Congress. It has plenty of cosponsors. We ask
the President to move on section 201 on implementing it and calling in
these tariffs.
Now, in addition, it is important that this Congress do something
about so-called legacy costs. Legacy costs are what is left for those
workers who are retired; who, when these companies go out of business,
lose at least 20 percent, sometimes as much as 40 or 50 percent of
their pensions, and who lose all of their health care benefits. In
virtually every other steel producing country in the world, especially
Western Europe, we are seeing companies, as President Leo Gerard told
us today, we are seeing more and more companies joining together in
larger companies; and we are seeing government help with these legacy
costs, with social costs, with health care benefits, with retirement.
And we have to compete with those companies.
The only way for Congress to do that is for us to deal with these
legacy costs for these workers who simply do not have anywhere to turn
at the age of 58 or 62 or 64, or even before they are eligible for
Medicare. And there are hundreds of thousands of American steelworkers
whose companies have gone bankrupt, who are about to lose their medical
care, who are about to lose up to half, at least a quarter, a fifth or
a quarter of their pensions.
It is important the President do the right thing on or before March
6. We need the 40 percent tariff. We need that tariff in effect for 4
years until this industry gets back on its feet and American steel can
have a level playing field from which to compete. It is important that
Congress move on section H.R. 808 and override the Republican
leadership to stop it. It is important that Congress stop passing
legislation like Fast Track and NAFTA and the World Trade Organization,
the way it was created, and PNTR for China, and all the trade
agreements that have put us behind the 8-ball.
It is important that this Congress and this President finally do the
right thing for American workers. I thank my friend from Pennsylvania
for his good work and I yield back to him.
{time} 2000
Mr. ENGLISH. Mr. Speaker, I congratulate the gentleman for his great
advocacy for the cause of steel.
Mr. Speaker, this administration has done more than the last
administration did so far; and that is very, very encouraging. Also, a
bill like H.R. 808 was brought up by this House Republican leadership,
passed the House overwhelmingly, and was killed in the Senate. This is
not so much a partisan issue. The importance is that we need to move
now the strong remedies necessary to put this critical, strategic
industry back on an even keel.
We also know an effective remedy is the only way to stimulate foreign
governments and steel producers to make the difficult decisions that
U.S. producers have already made to modernize, eliminate inefficient
capacity and rationalize, bringing stability and balance to the global
steel market.
Looking at this next graphic, we know that a 40 percent tariff would
provide more than $1.4 billion of operating revenue for our domestic
producers. A substantial tariff-based remedy is the only way to prevent
the loss of thousands of additional steel-related jobs and will send a
clear message to foreign producers that the United States is not a
dumping ground for excess steel product.
Going to the next graphic, even with the 40 percent tariff, people
need to understand prices would still be well below the 20-year average
on hot-rolled, cold-rolled, hot-dipped galvanized steel and coil
plated.
Even with the 40 percent tariff, prices would still be below the 20-
year average. So much for the dramatic price increase as a result of
tariffs that some opponents of relief for the domestic industry have
been arguing; and comparing the pricing trends of steel to other
industries, going to the next graphic, according to the Bureau of Labor
Statistics, the price of construction machinery and equipment has
increased about 60 percent during the last 20 years. I realize that
this graphic is confusing and looks like something that Washington
would conceive of, but if Members look at the actual details, if
Members know that the price of products such as motor vehicles have
risen by about 45 percent since 1981, paper has risen 55 percent, food
has risen 40 percent, steel prices during
[[Page H629]]
that same time have increased less than 5 percent. That shows that
steel has managed to maintain a relatively low cost and has actually
declined as a cost in relative terms. Anything that we do as part of
this remedy is not going to create a problem with the relative price of
steel.
Tariff-based remedies will not harm U.S. consumers. Increases in
steel prices have minimal effect on the price of end products because
steel constitutes only a small share of the total cost of most products
that contain steel. Think about it. For a typical family car, the
increase caused by the imposition of a 40 percent tariff would be about
$60, $60 on the cost of an automobile. For a refrigerator, the increase
would be a cost of about $3. That is not enough to affect consumer
decisions.
On this graphic, as measured by the Department of Commerce, steel's
share of total costs is 0.8 percent for construction, 3.4 percent for
motor vehicles and parts, 5.4 percent for other transport equipment,
6.8 percent for household appliances, 4.6 percent for electrical
industrial apparatus, and for the highest of Commerce's categories,
fabricated metal products, steel's share of total cost is less than 16
percent.
That clearly indicates that by seeking this remedy, we are not going
to create a problem for the domestic economy. Since 1995, the price of
finished goods has risen 11 percent while the cost of steel mill
products has declined 16 percent. The steel-consuming industries have
been running around Washington suggesting that relief under section 201
will not return profitability to the domestic steel industry by raising
prices while at the same time arguing that relief will raise consumer
prices to prohibitive levels.
According to a study by Professor Jerry Hausman, an economist at the
prestigious Massachusetts Institute of Technology, MIT, the tariffs
would actually have a minimal effect on prices, costing the average
consumer $2 a year, and having no negative effect on the U.S. economy.
We can reach out and successfully impose 40 percent tariffs, and it
will have a minimum impact on consumer prices. Hausman said the
assumptions from the consuming industry's trade action coalition are
fundamentally flawed. Using the same model, but with accurate
assumptions that truly reflect the current steel market, the studies
show that the section 201 remedies would provide a net benefit of about
$9 billion to the U.S. economy. The same consuming industries that are
saying that they will be placed at a severe disadvantage because of
these tariffs on steel have not had to endure the same stagnated prices
on their products during the last 20 years. My previous graphic, those
steel-intensive industries such as construction machinery, equipment
and motor vehicles, have seen the price of their product increase 60
and 40 percent respectively since 1981. I will say it again: steel
prices have increased less than 5 percent.
Entire American communities have been devastated by this import
crisis, and I would like my colleagues to consider that regions already
experiencing hardship as a result of the current recession are being
dealt a devastating blow by the massive levels of low-priced imports.
The loss of good-paying steel industry jobs directly impacts thousands
of workers in other sectors that depend on the steel industry.
The U.S. manufacturing sector, including the steel industry, has one
of the highest multiplier effects. For every $1 of a manufactured
product sold to an end user, an additional $1.19 of intermediate
activity is generated. The steel industry is a major consumer of
computers and other high-tech equipment. It is also a major user of
transportation industries such as rail, trucking, and shipping.
Steel-generated demand for key raw materials, coal, coke, iron ore
and limestone provides employment in a number of regions where,
frankly, other jobs are scarce. The steel industry is also a major
contributor to the U.S. tax base, including the tax base of State and
local governments.
There is another dimension that I would encourage my colleagues to
think about, and that is a healthy domestic steel industry is a
cornerstone of our national defense. Steel is an indispensable
component of many weapons and weapon systems, as well as the ships,
tanks and other vehicles that carry these systems and our dedicated
troops. In my district, Erie Forge and Steel is the sole producer of
propeller shafts that are used in Navy ships, and they are just coming
out of Chapter 11 bankruptcy with a new buyer.
The President and many other U.S. government leaders recognize that
steel and national security go hand in hand. At a time when we are
trying to enhance our national security and we are thinking anew about
the need to have a strong defense, defending the steel industry should
be a top priority. It is vital to U.S. national economic security and
to our homeland security that America does not become dangerously
dependent on offshore sources of supply for, among other things, the
steel that goes into our transportation security infrastructure such as
highways, bridges, railroads and airports; the steel, that goes into
our health and public safety infrastructure, such as waste and sewage
treatment facilities and the public water supply; the steel that goes
into our commercial, industrial and institutional complexes such as
schools, hospitals, retail stores, hotels, churches and government
buildings. We must maintain a viable domestic steel industry if our
country and our economy is truly to be secure.
The gentleman from Ohio brought up the issue of legacy costs, and we
need to recognize that 2 decades of downsizing have created a domestic
steel industry that is highly efficient with modern facilities; but the
downsizing that has occurred to achieve this goal has placed an
enormous burden on the industry, and that burden is these legacy costs:
health and pension liabilities for steelworkers who lost their jobs as
a result of the massive industry downsizing which occurred especially
during the period of the 1980s through the present as a result of
injurious, unfair trade.
Legacy costs have put the industry overall at a significant
competitive disadvantage versus foreign competitors whose governments
have assumed these same costs. Congress, the administration, and the
industry must continue to work together to address these costs that
serve as a critical barrier to industry consolidation. While this is a
time of enormous crisis for the industry, we need to recognize it is
also a time of unique opportunity. This is a chance to facilitate an
important, long-term restructuring to allow for significant capacity
reduction and help create an industry poised to compete over the long
run with any competitor in the world.
Mr. Speaker, we have reached a pivotal point in stabilizing the
American steel industry and ensuring good-paying jobs for its workers.
The Bush administration took a monumental first step. I encourage the
administration to follow through by enacting tough tariffs that will
truly provide relief for a besieged industry and its struggling
employees.
Many of our manufacturers face growing and cumulative competitive
disadvantages in the international market. While the European Union may
loudly voice their objections to strong tariffs as not necessary to fix
America's problem, the percentage of steel dumped into their market is
significantly lower than that dumped on our shores, and I would like to
demonstrate that with another graphic.
As Members can see, not since 1960 have we been on a relatively even
keel with the Europeans when it comes to receiving excess foreign
steel. The foreign excess steel dumped in the United States has
steadily grown since then, topping off at 30 percent while the EU
hovers at 15 percent. The EU's argument simply does not hold water.
Mr. Speaker, the plight of the steel industry is grim, but both
Congress and the administration are working hard to give employers the
tools that they need to be competitive in the global market. Nothing
will solve today's steel crisis in this sense: the damage is already
done. Instead, we must seek to apply the lessons learned in today's
crisis, put reforms into place so nothing like this will happen again.
We need to have substantial tariffs to begin this process. We must do
this in order to provide some security for the 62,000 American
steelworkers as well as 600,000 retirees and their dependents. Without
this action, the future of our domestic steel industry as well as our
economy and our national security will remain very much in question.
[[Page H630]]
{time} 2015
With that, I would like to yield to another of my colleagues, a great
member of the Steel Caucus, the gentleman from West Virginia (Mr.
Mollohan).
Mr. MOLLOHAN. I thank the gentleman for his leadership in this area
and for yielding.
Madam Speaker, I rise today in support of America's steel industry,
steelworkers and steel communities.
Just 7 days remain for the President to issue his decision on the
future of our domestic steel industry. To his credit, the President
requested that the International Trade Commission conduct a section 201
investigation to determine if steel imports injured the domestic steel
industry. Last year, the ITC held a lengthy hearing process in which it
heard testimony about, and concluded that, serious injury had been
caused to the steel industry by imports. The ITC ruled that sharp
increases in 16 product categories have injured, or could seriously
injure, U.S. steel companies. Various tariff levels were recommended by
the ITC. Now we await the President's response and the President's
action.
For 4 years now, our domestic steel industry has been engaged in a
brutal fight for survival. Foreign steelmakers have flooded our markets
with their products, much of it illegally subsidized. These imports
have pushed 31 of our steelmakers into bankruptcy and forced our
workers into the unemployment lines. We desperately need relief that
restores prices to reasonable levels. This decision that we await from
the President is our domestic steel industry's last chance for
survival.
As my colleagues know, the overwhelming majority of commissioners at
the ITC recognized that substantial tariffs of 20 to 40 percent must be
imposed in order to address the steel import problem and return prices
to their normal, pre-crisis levels. In this market environment,
however, 20 percent tariffs simply will not be enough. I join my
colleagues in asking the President to impose the highest level of
tariffs, 40 percent, because it is the only way to ensure the future of
our steel industry. And, further, any section 201 remedy must be
enforced for at least 4 years to demonstrate the seriousness of the
administration in addressing excess capacity.
Lastly, a tariff-based remedy must be applied across all flat
products, including slab. If the remedy is different for different
products, the imports will just shift to the product with the lowest
tariff, and the remedy will be gutted.
I would like to take a moment to address one particular problem,
tinplate. The district that I serve is home to Weirton Steel and
Wheeling-Pittsburgh Steel. Both have a significant stake in tinplate
production. In fact, probably no district in the Nation has a higher
concentration of tin mill production than the First District of West
Virginia. Unfortunately, it is one of the many segments that has been
staggered by rising imports and falling prices.
Imports of tin mill products have increased by 200,000 tons. Prices
have fallen by $65 per ton. Imported tin mill products jumped 50
percent from December, 2001, to January, 2002, a monthly record.
The ITC's vote on tin mill products was a three-to-three tie. Of the
three who voted that the domestic industry was injured by imported tin
mill products, two voted for tariffs of 40 percent, 38 percent, 36
percent and 31 percent; and one voted for tariffs of 20 percent, 17
percent, 14 percent and 11 percent. Because of the tie, the law states
that no remedy recommendation can be made to the President.
However, even without a tin mill products recommendation, the
President can still enact a remedy if he so chooses. If the President
provides tariff relief on other products but not on tin mill products,
other nations will likely offset their losses and flood the U.S. tin
mill products market. This is called product shifting. I urge the
President, in the strongest terms, to include tariff remedies for tin
mill products in his remedy decision.
We are truly at a crossroads in the steel industry. The cause of our
steel crisis is, simply put, massive foreign overcapacity. The ITC's
section 201 investigation provided overwhelming evidence that the
industry is seriously injured. Six commissioners unanimously agreed
that the increase in imports was a substantial cause of serious injury.
In fact, last Tuesday, the U.S. Bureau of Census released preliminary
data showing that all steel imports rose from 2 million net tons in
December to 2.5 million tons in January. So even in the face of
possible tariffs, foreign countries continue to dump steel in our
market.
More than 325,000 American jobs are at risk if serious, swift and
decisive action is not taken. According to calculations based on
measurements by the Bureau of Labor Statistics, the U.S. Department of
Labor and independent economic analysts, every job in the basic steel
industry supports at least three other jobs in other industries.
Without significant tariff remedies, our steel industry, our
steelworkers, and our steel communities will be decimated. I join my
colleagues in asking the President to issue strong tariff remedies for
our steel industry.
Mr. ENGLISH. I want to thank the gentleman for his involvement in our
Steel Caucus. One of the things that has made being chairman of the
Steel Caucus such an extraordinary pleasure is the involvement of
people like him and like you, Madam Speaker, both of you from West
Virginia, and also from our last, final speaker of the evening, the
gentlewoman from Pennsylvania (Ms. Hart), to whom I will yield.
Ms. HART. I thank the chairman of the Steel Caucus, the gentleman
from Pennsylvania (Mr. English), for his great leadership on this issue
and for actually having this administration be so well educated to
actually file the 201 investigation and really to have gotten us to the
point where we are today.
It is an honor for me to speak here on behalf of those in my district
and throughout this Nation who have made the steel industry what it was
and what it should be today, very strong and a very highly mechanized,
very technical and very much improved industry over the last many
years.
Unfortunately, we have not been reaping the benefits that that
industry has earned over the last several years. As I know has been
discussed by several other Members earlier this evening, we have not
reaped the benefits because of foreign nations subsidizing their steel
and dumping it at below market costs here in this country.
I had the opportunity to speak with the President, as I know many of
my colleagues have, about this issue. We were instrumental in making
the decision to file that 201 investigation. I am pleased that once the
ITC had the opportunity to review the issue that they did agree with us
that foreign steel dumping, in a 6-0 decision, in fact, that those
products being imported into the United States are being imported below
cost and also in increased quantities, that they are the substantial
cause of the injury to the United States steel industry, not the lack
of mechanization and modernization of our industry.
I want to say, I represent a part of western Pennsylvania that has
been known for being very strong in the steel industry. Unfortunately,
we have lost many, many jobs over the last several years. Not only did
we have a very difficult time in the 1970s and 1980s, but once again,
since 1986, for example, we have lost over 20,000 steelworker jobs and
five major plants in Beaver County alone, Babcock & Wilcox, Crucible,
LTV, Armco and American Bridge.
The problems, though, did not get better once the industry did
modernize and consolidate. It has gotten worse. Allegheny County, where
I live, Butler County, Fayette County, Washington County in western
Pennsylvania and Westmoreland County where I represent have all lost
jobs, not again because of their lack of technology but because of
steel dumping. It is the unfair trade that has caused these problems.
I would urge everyone involved who has the opportunity to have some
input now with the administration to encourage them to stand along with
my colleagues in the Steel Caucus and our chairman, the gentleman from
Pennsylvania (Mr. English), and push for a very effective remedy. It
appears that that will happen next week. We have the opportunity to
actually help our steel industry survive. We need to have a serious and
effective remedy. What we are asking for, what the industry
[[Page H631]]
has been asking for, is a strong remedy, 40 percent tariffs, something
along that line, for a period of time that will allow our industry to
recover, something that they have earned because of the good faith they
have shown in modernizing and moving the industry forward.
Unfortunately, for too long, the administrations that ran this
country did not pay attention to the steel industry. It was completely
ignored, in fact, under the previous administration. I must credit
President Bush, I must credit his trade ambassador and some of the
folks who work with him who have listened to us, who have discussed
with us the issue and I believe understand that it is important for us
to take this step now so that we will continue to have a steel industry
in this country at all. Because otherwise I think we are in jeopardy of
losing it completely.
Between 1997 and 2000, steel imports from China increased by 212
percent. From the former Soviet Union area, they increased by 167
percent. That is mostly from the Ukraine. From Taiwan, by 558 percent.
I do not think anybody could say with a straight face that the quality
of the steel or the process that they used was that much better than
ours, and in fact it probably was not better at all.
So I stand here along with my colleagues and I ask that we together,
and I ask the administration, to work with us together to make sure
that our steel industry and those who have worked in it and built it
and built a large part of this Nation be rewarded for their hard work,
be given the opportunity to continue to be a strong industry, that they
can rebuild themselves, that they only ask that they be given a level
playing field with other countries that are steel producers, and that
we make sure that given this opportunity now, that the ITC has given us
a decision showing that they have been injured by dumping, that they
get the opportunity again to get back on their feet.
Because not only is it important to my region, the regions that many
of my colleagues represent, it is important to our entire Nation that
we have a strong steel industry, not only for the automobile industry,
not only for the appliance industry, but for the defense industry, for
the defense of this Nation, and for our future.
I thank the gentleman from Pennsylvania for his leadership.
Mr. ENGLISH. I thank the gentlewoman. I congratulate her particularly
on serving within the Steel Caucus, already as a member of the
executive committee and one of the effective leadership, helping us
shape the strategy to bring this issue to the point where it has
arrived today, where there is an opportunity for the President, through
his action, to put this steel industry on a much more level playing
field.
It is worth noting, since he initiated the 201, already it has had a
substantial effect on imports and already it is having some effect on
steel prices, forcing foreign competitors to rethink their strategies
and rethink their dumping.
I also want to congratulate the steelworkers unions, the United
Steelworkers Union, the Independent Steelworkers Union, and the
industry which is so diverse yet has come together behind the notion
that this 201, coupled with a 40 percent tariff through the President's
initiative, is ultimately going to lead to a strong, competitive,
world-class American steel industry for the future.
Mr. STUPAK. Madam Speaker, the health of the domestic steel industry
is vital to our nation, and it is the lifeblood of my district of
northern Michigan. Without meaningful comprehensive relief, 40% tariffs
over 4 years for all segments of the steel industry, including slab
steel we will not recover from the current crisis.
Only the strongest of remedies can offer any hope for our nation's
steel and iron ore industries to survive. Over 30 steel companies are
in bankruptcy, including the LTV Corporation, a part owner and customer
of the Empire Mine in northern Michigan. Michigan's iron ore mines have
felt the impact of these bankruptcies as the steel companies that have
been their customers go out of business one by one. Most recently as a
result of LTV's bankruptcy, the Empire Mine has been shut down, and
over 800 employees are currently out of work.
With the Empire Mine shut down, Michigan has only one remaining iron
ore mine, the Tilden Mine which is located in Marquette County. The
Empire and the Tilden Mines have been a vital part of the economies of
the Upper Peninsula and the state of Michigan. In addition to the 2,000
employees of these mines, our citizens have been employed in the
transportation of ore from the mines, to the ports, to the steel mills
along the Great Lakes, as well as in the power plants that supply these
mines, and many other related industries.
I was very pleased by the unanimous finding of injury by the U.S.
International Trade Commission. However, I was troubled by the relief
recommended by a majority of the board in the form of a tariff-rate
quota on slabs, beginning in the first year with a 20% tariff on slab
imports over 7 million tons. This will be insufficient relief to the
iron ore industry and to the steel companies whose blast furnance
operations must compete with the cheap slab steel that is flooding our
country.
Rather, the relief for semi-finished steel slab must be equivalent to
that recommended for the other covered industry products: there must be
a tariff on each and every ton that enters this country. We need
tariffs of at least 40% on steel slabs. Without such a tariff, millions
of tons of slab steel will continue to enter the U.S. market at
artificially low prices, and will continue to harm our domestic
industry.
Now is the time to act to save the steel industry. Our national
security, our manufacturing base, our workers, our communities depend
upon a strong domestic steel industry. Now is the time to stand up for
steel!
Ms. DeLAURO. Madam Speaker, I want to thank Representatives Visclosky
and English for organizing tonight's special order on the crisis facing
the hardworking men and women in the U.S. steel industry, and for their
dedication and leadership on this crucial issue.
Since the late 1990's, the steady increase in imported steel into our
country has put the U.S. steel industry and the future of U.S.
steelworkers and their families in serious jeopardy. To date, 28,000
steelworkers across the country have lost their jobs.
These losses have ripple effects throughout their communities. When
steel mills close, businesses around them close, people leave their
towns and neighborhoods. Bonds and traditions built over years are
broken.
We must take action immediately. Now, more than ever, we must unite
in defense of meaningful protection. It is time to stand firm against
illegal dumping by foreign competitors.
In December, the International Trade Commission called on the
President to impose tariffs on foreign steel--to protect American
families. Since then, three steel companies have collapsed, leaving
hundreds of steelworkers without jobs--men and women who have dedicated
years to making the highest quality steel available.
By March 6th--just a week away--the deadline arrives for the
President to act. He will have to decide whether to protect
steelworkers and their families or to protect foreign interests. I
strongly urge him to do the right thing and stand with our nation's
steelworkers.
I am proud to stand shoulder-to-shoulder with the men and women who
are coming to the Capitol tomorrow to rally for meaningful relief, for
their jobs, for the highest quality steel in the world, for a safe
future for their families.
Mr. DINGELL. Madam Speaker, the crisis facing the American steel
industry not only jeopardizes thousands of jobs in Michigan and the
industrial Midwest, but also threatens the long-term stability and
strength of the American economy. We must commit ourselves as Americans
to making sure our trade laws have teeth and our country never becomes
dependent on foreign steel.
The events of the last few months should also remind us that the
steel crisis also jeopardizes our national defense capabilities. If we
no longer have the mills and workers to produce steel, the strength of
our armed forces--which today are the world's most powerful--will be
dependent upon our ability to import foreign steel. This is an
unnecessary gamble and a grave concern. During World War II it was our
ability to out-produce our foes in the factory that led to our victory
on the battlefield.
Twenty steel makers have filed chapter 11 bankruptcy protection since
1998. Steel prices are at their lowest point in 20 years. Some 20,000
steelworkers have lost their jobs since 1998. Since 1980, the number of
American steelworkers has fallen from 460,000 to 140,000. Statistics
have not measured the job and economic losses that have been absorbed
by those whose work is tied to the steel industry.
Great Lakes Steel once operated with nearly 12,000 employees; today
they employ less than a third that number. During the second quarter of
2001 alone, their parent company lost over $110 million. Rouge Steel is
also struggling to survive; Rouge finished 1999 and 2000 with net
losses.
These plants, like many across the nation, have been periodically hit
by hard times and have survived. The industry has always gritted its
teeth and survived by relying on what
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makes it competitive in the world market: quality. It has continually
improved productivity and product. In fact, the steel industry has
invested nearly $35 billion in steel plant modernization since 1995.
The productivity of the American steel industry has improved 180
percent since 1980.
For the last few decades, we have world economies becoming more
interdependent. Some job losses in the industry could not be avoided,
but American steel regrouped and made itself competitive on the world
marketplace. All the industry and workers asked in return was for a
level playing field with foreign competitors, and that trade laws be
enforced.
We all know this has not happened, particularly over the last five
years. Subsidized foreign steel from Russia, China, Japan, and Brazil
has been dumped into the United States at prices so low that there is
no way the unsubsidized American steel industry can compete. Last year,
steel import levels were 83 percent higher than the annual import
average for the last eight years.
Hopefully the playing field will soon be leveled, as it must be. On
October 22, the International Trade Commission voted that imports have
been a substantial cause of serious injury to the U.S. steel industry
in affirmative decisions covering nearly 80 percent of total import
tonnage. The decision was a significant step that set the stage to
provide a temporary period of strong, effective steel import relief.
Such relief would provide a period of time to allow U.S. steel
producers to recover and to address long-term structural problems in
the U.S. and global steel sector.
It is now up to the President to determine what measures will be
taken. The Congressional Steel Caucus, of which I am a proud member,
has pressed the President to implement real, meaningful sanctions. On
December 7, the ITC voted remedy recommendations; 5 of 6 Commissioners
voted for four years of tariffs ranging from 20% to 40% on major
categories of finished carbon and alloy steel imports. The President
will make his decision March 6. Words alone will not suffice. I have
already weighed in with the White House on this matter, and have sent
the President--along with my colleagues in the steel caucus--three
letters in the past week alone.
High tariffs for four years--at or near the 40 percent advocated by
the industry and proposed by two Republican ITC Commissioners--are
essential if the industry is to recover. Experts have projected that
the industry needs to invest $7-9 billion over the next four years to
stay competitive and adjust to import competition. This can only happen
with the near-term price relief and market stabilization that would
come from significant tariffs. Substantial tariffs will do the
following: have immediate but modest price effects; allow domestic
producers to significantly increase sales quantities; provide certainty
in the market; will distort trade less than quantitative measures; and,
allow the industry to generate the revenue needed for investments.
Inadequate tariffs, such as the 20 percent recommended by the ITC
plurality, will likely be absorbed and will have little or no effect in
the market. So-called ``tariff rate quotas,'' which apply an additional
duty only after a certain volume of imports comes in at low or zero
duty rates, will provide no benefits and might well be worse than
nothing at all. Relief on slab is also critical. Without an effective
remedy on slab, the pressure for domestic producers to shut down their
hot-ends and stop making steel will be unstoppable.
Regardless of the President's decision, Congress' job is not
finished. We must examine other ways to assist the steel industry,
including addressing the problem associated with legacy costs. If
nothing is done, and the federal government does not intervene, 600,000
retirees will lose their hard-earned health care benefits.
I implore my colleagues to join me in urging the President to enforce
our trade laws, follow the recommendations of the ITC, and stand up for
American industry and American workers. Now is the time to level the
playing field and end illegal foreign steel dumping, and save the
American steel industry.
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