Home

"STEEL ACT" WILL KILL U.S. COMPETITIVENESS:
CONSUMING INDUSTRIES GO ON THE OFFENSIVE
AGAINST DANGEROUS LEGISLATION

Washington, DC: Consuming Industries Trade Action Coalition (CITAC) Chairman Jon Jenson reacted strongly today to the introduction of a bill designed by the U.S. steel unions and their allies in the U.S. Congress to protect domestic steel.

"We are disappointed in this legislation, which could cause irreparable harm to the U.S. economy," said Jon Jenson. "Consuming industries in this country employ 50 Americans for every one steelworker. We, along with American consumers, investors and workers, have paid to support the steel industry for 30 years, despite its inefficiencies. The time has come to find positive solutions, rather than provide yet another round of trade protection, to help this weak and structurally failing industry."

"We should be looking for common-sense ways to improve the competitiveness of U.S. steelmakers rather than artificially restricting their competition," said William E. Sopko, president of Stamco Industries, a Cleveland-area manufacturer of steel products and a member of CITAC. "My employees and my business, along with millions of others, are threatened by steel import quotas."

Rep. Peter Visclosky (D-IN) and Rep. Jack Quinn (R-NY) introduced the bill yesterday. Among the proposed protectionist measures, the bill would establish a WTO-violative quota on steel imports, a $10-per-ton surcharge on steel shipments and a government handout of $10 billion to the domestic steel industry in the form of loan guarantees.

Steel consuming industries include heavy equipment, industrial machinery, construction and transportation equipment manufacturers, the metalforming industry and the domestic steel industry itself, which imported approximately 10 million tons of semifinished steel in 2000. Even competitive U.S steel companies have declined to put their full support behind the bill, noting they do not wish to subsidize inefficient competitors.

Jenson said that major U.S. steel-using manufacturers will lose market share and jobs if they cannot obtain the products they need from competitive domestic and international suppliers.

"How many times do legitimately competitive, productive firms have to fight this battle? It's absurd to introduce legislation that will put in jeopardy the livelihoods of more than 8 million American workers to save the jobs of 160,000 in an industry that has failed to modernize and take the steps necessary to compete globally," stated Jenson. "The harm to consuming industries and to the American consumer would far outweigh any short-term benefit to steel companies or workers."

The introduction of the bill comes only days after a WTO arbitrator gave the United States until July 26 to repeal the Anti-Dumping Act of 1916, a long-dormant law reactivated by the steel industry to halt low-priced imports. The WTO ruled in a separate case that U.S. measures taken against Japanese steel imports violated world trade rules.

Jenson concluded, "The United States has been a leader in building our global free trade system. Creating artificial barriers is not the long-term solution for the internal structural problems of the domestic steel industry. These barriers promise to create many new equally burdensome problems for American companies trying to compete globally."

CITAC is a coalition of companies and organizations committed to promoting a trade arena in which U.S. consuming industries and their workers have access to global markets for raw materials and other imports that enhance the international competitiveness of U.S. firms.