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United States International Trade Commission Good afternoon. I am Jon Jenson, Chairman of the Consuming Industries Trade Action Coalition (CITAC). CITAC is a coalition of companies and associations in the United States committed to a U.S. trade policy that meets the needs of America's consuming industries. As you will hear, we strongly oppose import restrictions on steel. We believe that they will not work and would devastate American steel-using manufacturers - particularly in this period of recession - by dramatically raising their cost of raw materials, and increasing competition from abroad for the products they make. Massive tariff protection, on the order of the Smoot-Hawley Tariffs of 1930, will not satisfy the statute's requirements that domestic producers be able to compete successfully against imports after relief is terminated. Nor would their plan result in global production cutbacks. It would, however, cause a major trade war and hurt downstream manufacturers in the U.S. - most of which are small businesses. Steel imports are essential because U.S. steel producers can supply only about 75 percent of domestic demand. Steel users need the right steel, at the right time, at a globally competitive price. Steel prices in the U.S. are already higher than in other markets. Import restrictions will make the situation much worse for American manufacturers. There are 57 times as many U.S. workers in steel consuming industries as in steel production. Based on an economic analysis by the CITAC Foundation, severe steel import restrictions would cost up to 30,000 jobs in steel consuming industries. Laura Baughman, a co-author of the study, is available to answer your questions. We cannot allow our steel using manufacturers to be sacrificed in a vain effort to prop up a few ailing steel producers. In the next few minutes we'll briefly review the real issues from the steel-using manufacturer's point of view - and why trade restraints are not the answer.
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