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Schumer: Federal Regs Should Level the Playing Field for Central NY Manufacturers, Not Harm Them

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Today, U.S. Senator Charles E. Schumer called on the Department of Commerce (DOC) to reverse course in their consideration of a new antidumping policy that could have a negative impact on Upstate New York's manufacturing industry, including companies like the Nucor Steel Auburn, Inc. Specifically, this potential change would restrict the effectiveness of trade laws that protect domestic manufacturers from an influx of artificially cheap goods in the marketplace.

Schumer noted that Nucor, among hundreds of other companies in New York, would have to compete with artificially low-cost foreign steel and other products if this federal policy goes into effect. Nucor and others are playing by the rules, but this "targeted dumping" hamstrings numerous American companies from competing against cheaper foreign imports. Nucor estimates that if the methodology is changed it could negatively impact the company and could be detrimental to production and sales in Central New York.

"Federal regulations should support, not harm, Upstate New York manufacturers like Nucor in Central New York, which are upstanding companies forced to compete with artificially-cheap foreign imports," said Schumer. "American manufacturers can compete with any competition, but when they play by the rules it is essential that we ensure other are doing the same. I have urged the Department of Commerce to strongly consider the devastating impact a proposed antidumping policy would have on Central New York's steel industry, including Nucor in Auburn, in addition to other domestic companies. Nucor employs 300 people in Auburn who rely on the federal government to protect them from illegal importing practices such as targeted dumping, and I will continue to fight on their behalf."

"We are being hammered by a surge of steel imports into the United States because of a global economic downturn, foreign government subsidies and increased trade barriers worldwide," said Mary Emily Slate, vice president and general manager of Nucor Steel Auburn, Inc. "The trade laws are one of our only tools to combat unfair trade practices and weakening them would have an enormous negative impact on Nucor and other U.S. manufacturers. We urge the U.S. government to strengthen, not weaken, our trade laws."

Dumping is when a foreign company imports their goods into the United States below fair market value. To correct for dumping, the Commerce Department calculates the difference between the domestic price of a product and the price in the exporter's home country, and then levies a duty at import to bring the price of the imported good up to fair value.

Targeted dumping occurs when foreign producers, like those in China, try to mask its dumping or artificially cheap goods into the United States by "targeting" the dumping, based on selected customers, regions, or seasons. The producer sells at much lower prices to these targeted buyers, regions or time periods and at higher prices to others in order to hide their dumping of cheap goods into the U.S. market. Both U.S. law and the WTO Antidumping Agreement allow the Department of Commerce to identify and correct for targeted dumping.

Antidumping duties on imports of steel reinforcing bar or "rebar" from seven countries including China are in place to help level the playing field for U.S. manufacturers and are intended to counter the economic harm caused by predatory pricing. The duties have gone a long way towards protecting U.S. steel manufacturers, including Nucor Steel Auburn, from further harm, and in keeping manufacturing jobs in this industry in the United States and in the state of New York. Schumer is urging DOC to consider the possible grave impact on domestic producers before implementing any changes to the Commerce Department's current targeted dumping methodology.

Nucor Corporation is the largest domestic steel manufacturer 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 reinforcing bars and employs over 300 people.

However, now Commerce is considering changing the process for determining damages to make the test for targeting more difficult, and narrowing its application by making the adjustment only to the targeted sales, and not to all sales. This would fail to unmask the dumping, and greatly reduce the effectiveness of the dumping laws for U.S. producers. If such changes were implemented, they would result in a serious weakening of the law's ability to address injurious dumping, by permitting significant instances of dumping to be hidden by higher priced sales.

A copy of Sen. Schumer's letter appears below:

Dear Dr. Blank,

I write today with serious concern that the Commerce Department will soon be issuing a new antidumping policy that will restrict the use and effectiveness of our trade laws. The proposed policy, which I understand would significantly weaken the Commerce Department's methodology for identifying and countering targeted dumping, would dramatically inhibit the ability of domestic producers, such as copper and brass bills like Nucor in Central New York, to compete with unfairly priced foreign imports.

As you know, targeted dumping occurs when foreign producers try to mask their dumping of artificially cheap goods into the United States by "targeting" the dumping, based on selected customers, regions, or seasons. The foreign producer sells at lower prices to these targeted buyers, regions or time periods and at higher prices to others in order to hide their dumping of cheap goods into the U.S. market. Both U.S. law and the WTO's Antidumping Agreement allow the Department of Commerce to identify and correct for targeted dumping -- as the European Union does. There is no reason that the United States should voluntarily weaken its targeted dumping methodology, and thereby reduce the remedies available to our domestic producers under the U.S. unfair trade laws.

Such a change would seriously hurt many companies across the State of New York, such as the steel manufacturer Nucor, which employs over 300 people in Auburn, New York. Nucor estimates that if the methodology is changed it could cost the company a large number of jobs. They also predict that allowing unscrupulous foreign producers to effectively avoid American antidumping laws altogether could easily put their entire company, as well as many others across my state and the nation, at risk.

I urge you to consider the possible grave impact on domestic producers before implementing any changes to the Commerce Department's current targeted dumping methodology. Without these vital and WTO-consistent protections, domestic production in the U.S. copper and brass industry and others could be gravely endangered by a flood of artificially cheap imports. Thank you for your consideration and I look forward to hearing from you.


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