Bayh Urges Trade Commission to Protect U.S. Steel Industry Jobs

Press Release

Bayh Urges Trade Commission to Protect U.S. Steel Industry Jobs

Says unfairly traded Chinese imports are harming Indiana producers

Senator Evan Bayh today called on the International Trade Commission (ITC) to continue to take steps to protect American jobs and the U.S. steel industry from imports of unfairly traded steel pipe from China.

During his testimony, Bayh pointed out that American steel producers, including hot-rolled steel and pipe and tube manufacturers in Indiana, are being undercut by circular welded steel pipe sold in the United States at as much as 85 percent below fair market value. In November, the U.S. Department of Commerce determined that Chinese companies producing circular welded steel pipe are subsidized by their government, giving them an unfair advantage in the world market over U.S. producers.

Below is the full transcript of Bayh's testimony:

"I've spoken before you on several occasions. The most recent occasion was last July, during the hot-rolled steel dispute. I want to thank you for the action the Commission took in that regard. It was, in my opinion, the right thing to do. You are one of the few entities in our government that actually acts to address to some of these problems, and I'm most appreciative for that.

"Frankly, I wish I didn't have to appear before you on such a frequent basis. I wish I could say that some the activities of our trading partners that lead to these disputes had abated, but they have not. I wish I could say that some of the harm that this has caused to our producers, and our workers, and our communities had abated, but regrettably, it has not. I wish I could say that other parts of our government, other than this commission, had acted more aggressively to address some of these problems, but unfortunately, we have not.

"The result of all this has been to undermine the faith and confidence of the American people in our system of global trade. The Chinese, in this particular case, cheat because they can. It's profitable for them, and until we take more vigorous action to address that calculus, they will continue doing what they are doing.

"They seek rapid rates of growth at artificially high levels to offset the potential for instability in their country as people move from the land into the cities. That is a fine decision for them to make, but if we are going to have a conscious practice in this country favoring cheap consumer goods at the expense of producers, that is a decision for the United States government to make rather than for a foreign government to make and impose upon us. Hence the dispute we have here today and others like it.

"As I understand, the question before the Commission today is whether the welded steel pipe industry has suffered a material injury, and if so, what is the extent of the that injury. My own view, and you'll hear from many learned people this morning, is that the only result that can be reached in this determination is that they absolutely have, that the injury has been material.

"The subsidies, as I understand it, have been determined by the Department of Commerce to be as high as 265 percent in some cases. The product is being sold in our markets at below the market price, in some cases as high as 85 percent below market price. This has led to a dramatic increase in a market share of Chinese competitors from, I believe, about 16 or 17 percent to 29 percent in a very short period of time.

"Profit margins in the industry have sunk from about a 10 percent profit margin to about a 3.4 percent profit margin. Roughly 120 people have been laid off because of this predatory activity. The state of Indiana is among the largest producers of circular welded pipe. One hundred and twenty people may not sound like a lot in the context of the national economy, but for some of our communities, it is a material injury and it has a cascading effect, indirect employment effects, other activities in the communities are harmed because of the loss of business and employment.

"As I said at the beginning, this is a microcosm that reflects some of the challenges that we face as a country. I saw just today on the front page of the Washington Post, about 82 percent of the American people feel that our country has gotten significantly off on the wrong track. The president's approval rating is at an all-time low, and I don't mean to criticize him; Congress' approval rating is about 14 or 15 percent. If it weren't so serious, it would have been funny. In the course of the presidential debates, apparently one of the commentators noted that more Americans feel that they've seen an unidentified flying object than gave Congress a higher approval rating. Unfortunately, it is systemic across the executive branch and the legislative branch.

"If you look at the figures in terms of whether the American people feel the global trading system is operating in a fair and objective manner; or that there is true competition taking place; or that there are winners and losers chosen on the basis of merit and market forces, as opposed to government policy; the American people's feelings about all that are at an all-time low. And, while the dispute here today certainly is not the cause of all that, it is a microcosm, a problem that contributes to all of that.

"If people don't feel that economic outcomes are brought out of hard work, ingenuity and competition; if instead they believe, and have a right to believe based on the facts, that it is a product of other governments' economic policies and economic engineering rather than true forces in the marketplace, their faith in the whole process and in the system collapses. Then you can lead to some unfortunate outcomes, including protectionism.

"So, I would encourage you to take a careful look at the facts. I know you will because you've done that previously. This is just another example of what we've seen over and over and over again.

"I would like to conclude by thanking you for the action you've taken previously to redress some of this. The behavior won't stop until we do. The American public's confidence won't be restored until we do. You have been one of the few entities that has proven to be prescient enough and strong enough to look at the facts, and when they warrant, take the kind of action you have before. I urge you to do that again. And I hope that we'll have an opportunity to see one another in the future in a social setting or in other settings rather than in these constant disputes because it shows that the underlying behavior has not changed. And it really needs to.

"Thank you."

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