Today, U.S. Senators Charles E. Schumer and Kirsten Gillibrand announced that they are urging the U.S. International Trade Commission (ITC) to keep in place import duties on unfairly-traded, foreign-manufactured steel plate that threatens to undercut domestic steel plate producers, including Nucor Steel in Auburn. Currently, the U.S. imposes duties, ranging from 1 to 59 percent, on imports of dumped and subsidized steel plate from India, Indonesia, Italy, Japan and Korea. These duties help level the playing field for U.S. manufacturers and are intended to counter the economic harm caused by predatory pricing and foreign government subsidies. However, by law, these duties will expire effective December 2010 unless reauthorized by the ITC. If these duties are lifted, it would seriously weaken U.S. efforts to fight unfair trade practices, and put companies like Nucor Corporation at a significant disadvantage at home and abroad. In a letter sent to ITC Chairman Okun, Schumer and Gillibrand urge the ITC to keep existing duties on foreign imports in place, so as to not undercut American manufacturers. A final decision by the ITC is expected before the end of the year.
"Once again, foreign manufacturers and foreign governments are engaged in market-distorting, unfair trade practices that undermine U.S manufacturers," said Schumer. "The good news this time is that we have protections in place to level the playing field, and it's vital we keep them that way. For years, Nucor Steel in Auburn has provided Central New York families with good paying jobs and benefits, and we can't afford to put that all at risk because foreign producers will stop at nothing to gain U.S. market share."
"If we're going to have a thriving economy with made-in-America manufacturing right here in Auburn and all across New York, we need to keep fair trade practices like these in place," Senator Gillibrand said. "These protections keep the competition fair, and keep good-paying jobs in New York. We can't afford to let them fall by the wayside."
"Strong enforcement of our antidumping and countervailing duty laws is critical to ensuring that Nucor Steel Auburn and manufacturers across New York are not injured by unfairly traded imports," said MaryEmily Slate, General Manager of Nucor Steel Auburn, Inc. "Senator Schumer gets it -- a healthy manufacturing base is essential to a lasting economic recovery. We commend the Senator's tireless commitment to promoting a level playing field and encourage all elected officials to join him in supporting U.S. industry and workers."
Nucor Corporation is the largest domestic steel-maker in the United States. In 2001, Nucor invested $115 million to acquire what was then a failing steel-making facility in Auburn. In the decade since that acquisition, Nucor has invested an additional $40 million to modernize or upgrade the core components of the steel melting, casting and rolling operations. Nucor's Auburn facility produces a range of carbon steel products including plate and employs close to 300 people.
Antidumping and countervailing duties on imports of steel plate from India, Indonesia, Italy, Japan and Korea have been in place since 2000 to protect U.S. producers of cut-to-length carbon steel plate. These duties help level the playing field for U.S. manufacturers and are intended to counter the economic harm caused by predatory pricing and foreign government subsidies. The duties currently in place range from 1 to 59 percent. The duties have gone a long way towards protecting the remaining U.S. steel manufacturers, including Nucor, from further harm, and in keeping manufacturing jobs in this industry in the United States and in the state of New York.
In November 2010, the Commerce Department and the International Trade Commission initiated a so-called "sunset review" of the antidumping and countervailing duty orders on steel plate from the five countries. In the first stage of this review, completed in March 2011, Commerce determined that the termination of the duties would be likely to lead to continuation or recurrence of dumping and subsidization. Next, the ITC will consider whether terminating these duties would likely lead to continuation or recurrence of economic harm to the U.S. industry. The ITC plans to hold a hearing on this issue today, October 19th, and Schumer and Gillibrand are urging the ITC to keep the antidumping and countervailing duties on imports of steel plate in place, so that Nucor can compete on a level playing field. A final decision by the ITC is expected before the end of the year. If the ITC concludes that termination of the duties would be likely to lead to continuation or recurrence of injury to the U.S. industry, the antidumping and countervailing duties on imports of steel plate will remain in place.
Dumping occurs when a foreign producer sells a product in the United States at a price that is below that producer's sales price in its home market, or at a price that is lower than the cost of production. The difference between the price (or cost) in the foreign market and the price in the U.S. market is called the dumping margin. The dumping margin is used to determine the amount of antidumping duties to be collected on imports of a product found to be dumped and causing economic harm to the domestic industry. Countervailing duties are collected on imports of a product found to be subsidized by a foreign government and causing economic harm to the domestic industry. The duties are intended to offset ("countervail") the benefit conferred on foreign producers and exporters by the government subsidies.
A copy of the letter to U.S. ITC Chairman Okun, signed by Senators Schumer, Gillibrand, Hagan, Casey, Harkin, Burr, Coats, Shelby, Sessions, Graham and Wyden, appears below:
October 19, 2011
The Honorable Deanna Tanner Okun
U.S. International Trade Commission
500 E Street, S.W.
Washington, D.C. 20436
Dear Chairman Okun:
We are writing to urge you to maintain the existing antidumping and countervailing duty orders against unfairly traded imports of cut-to-length carbon steel plate from India, Indonesia, Italy, Japan, and Korea. The continuation of these trade orders is necessary to prevent further injury to an already vulnerable domestic plate industry.
As Senators from steel producing states, we have all witnessed firsthand the degree to which the economic recession has harmed the domestic steel industry. Following one of the worst financial crises in history, demand for steel plate declined by more than 50 percent, causing the commercial and financial condition of the domestic plate industry to deteriorate. Plate is used in a variety of applications that are of critical importance to the U.S. economy, including non-residential construction and the manufacture of heavy equipment, rail cars, ships, barges, refinery tanks, and wind towers. However, demand for plate remains 20 percent below pre-recession levels and the domestic industry's recovery remains slow and uneven.
At the same time, plate producers in India, Indonesia, Italy, Japan, and Korea continue to increase their production well in excess of demand, and continue to add new capacity. For example, producers in Korea are projected to increase plate production by more than 35 percent in the next several years despite slowing demand growth. Plate producers in these countries are export-oriented and have an established ability to send significant quantities of plate to the United States and will undoubtedly do so if the orders are revoked. Any increase in unfairly traded imports will deal a devastating blow to an industry struggling to recover from the prolonged economic recession.
On behalf of the domestic plate industry, its employees, and the communities that we represent, we strongly urge you to maintain the existing orders against unfairly traded imports of cut-to-length plate. The health and survival of the U.S. steel industry depend on nothing short of the full and fair enforcement of the trade laws of the United States.
Thank you in advance for your time and consideration of this critical issue.