Janesville, WI - Wisconsin members of the Consuming Industries Trade Action Coalition (CITAC) Steel Task Force met yesterday with Congressman Paul Ryan (R-WI-1) to detail the serious and growing crisis they are facing as a result of both the 201 tariffs on steel imports imposed by the Bush Administration and anti-dumping suits filed by steel producers.
Steel-consuming company representatives of CITAC and the Precision Metalforming Association (PMA) met with Rep. Ryan in his district office to discuss the problems they are experiencing with inadequate steel supplies, price gouging by domestic steel producers and competitive threats they are facing from overseas manufacturers.
Most of these problems are a result of the 30 percent tariffs imposed by President Bush on steel imports and/or the onslaught of anti-dumping cases brought by domestic U.S. steel producers. Together, these actions isolate the domestic steel industry from competition, driving up steel prices and causing supply shortages for American steel users. These American steel users in turn must compete with imports of finished products produced overseas with locally priced steel and therefore, are unable to pass on price increases to their customers, who are also under market pressures to contain prices.
"I wanted the Congressman to know that the future of our company looks bleak," said John Janes of Wisconsin Metal Products Company in Racine, Wisconsin. Janes' company, which employees sixty people, produces metal stampings used primarily in the automotive industry.
"Since the imposition of the tariffs, we have been struggling with shortages of material, skyrocketing prices and poor quality steel&it's putting us further and further behind." When shipments arrive late, Janes has had to send employees home, and then pay overtime when material finally does arrive - a "tremendous burden," he states.
Additionally, Janes remarks that "we have seen virtually all of our contracts broken this year. Our customers are going to take their business overseas."
In Wisconsin, there are approximately 366,000 steel-consuming jobs and 2,300 steel-producing jobs, or 162 steel-consuming jobs for every one steel-producing job. In Rep. Ryan's district, there are nearly 40,000 steel-consuming jobs and barely any steel-producing jobs.
Another participant in yesterday's meeting was Michael Hohman, the President of Spindustries, LLC in Lake Geneva, Wisconsin, a contract manufacturer of metal spinnings used in industries ranging from agriculture to x-ray. The company has already been forced to eliminate roughly thirty percent of its work force due, in large part, to the impact of the steel price increases.
"The tariffs are one of the largest factors hurting our company," says Hohman. "Because of the Bush Administration's decision, a third of our purchased material has been affected. Hohman worries that his customers will move their business to Canada for more competitive prices. "The tariffs are making it harder for us to compete globally, he states, "if something is not resolved soon, we won't get to a level playing field and our industry will be permanently damaged."
The meeting with Rep. Ryan is one of a series of Congressional meetings held by consumers to inform their representatives of the unintended negative effects of the steel tariffs. Friday's visit follows the July 23rd House of Representatives Small Business Committee Hearing held by Chairman Donald Manzullo (R-IL) in which CITAC member companies testified about steel shortages and massive price increases caused by the 201 steel tariffs and anti-dumping duties. Chairman Manzullo invited the steel users to testify before the Committee after receiving more than a hundred letters from downstream users suffering serious dislocations from the Bush Administration's decision to impose up to 30% tariffs on imported steel.
Similarly, on September 3, the House Small Business Committee held a field hearing near Los Angeles to hear from area businesses about the government's efforts to meet the needs of small businesses, including local steel consumers who have been impacted by the 201 tariffs.
CITAC is a coalition of companies and organizations committed to promoting a trade arena where U.S. consuming industries and their workers have access to global markets for imports that enhance the international competitiveness of American firms.