Schumer Recently Called On Feds To Ramp Up Laws To Protect NY Steel Companies From Unfair Foreign Competition

U.S. Senator Charles E. Schumer today announced that, following his push, the International Trade Commission (ITC) has voted unanimously to protect American steel making jobs that were being put at risk by unfair trade practices. The ITC’s decision puts in place duties on foreign companies that were unfairly undercutting Nucor. These duties will prevent unfairly subsidized and artificially cheap steal from entering into the US market, putting Nucor Vulcraft and their workers on a level playing field. The duties are on corrosion-resistant and cold-rolled steel.

“This unanimous ruling is great news for Nucor Vulcraft, its workers and the Southern Tier– which has a long and storied past as a steel making region. We could not afford to let our steel manufacturing base melt away because China refuses to play by the rules,” said Senator Schumer. “That’s why I went to bat for our New York steel industry and pushed the ITC and the Department of Commerce to implement new duties to guard against this unfair foreign competition.”

"These final determinations by the International Trade Commission confirm that the U.S. steel industry has suffered harmful effects from imports of dumped and subsidized corrosion-resistant steel," said John Ferriola, Chairman, CEO and President of Nucor Corporation.  "Today's decision and the decision earlier this week in two of the cold-rolled steel cases are important steps in returning fair trade to the U.S. flat rolled steel market. Our government is sending a clear message that all countries must play by the rules of international trade and will be held accountable for failure to do so."

Nucor employs 579 workers in New York. Nucor’s Chemung facility produces steel floors and joists and employs 320 workers. A massive amount of Chinese steel has entered global markets, including the U.S., harming American steel producers and the communities that rely on these manufacturers, like those in the Southern Tier where Nucor Vulcraft is located. According to the American Iron and Steel Institute, steel facilities averaged roughly 70 percent capacity utilization in 2015, well below the levels necessary to be profitable, invest in plant and equipment, or be positioned to hire new workers. Bureau of Labor Statistics data indicates that employment in the steel industry has declined by over 12,000 jobs over the last twelvemonths for which data are available.

In 2015, imports of corrosion-resistant steel from China, India, Italy, Korea, and Taiwan were valued at an estimated $500.3 million, $219.6 million, $110 million, $509.1 million, and $534.4 million, respectively. The duties put in place on this steel are as high as 450% for China, 34% for India, 92% for Italy, 47% for Korea and 3.7% for Taiwan.  

Schumer explained that China’s government, especially, is providing massive subsidies to its steel and aluminum sectors, which are primarily state-owned, in order to export high volumes of steel and aluminum. These steel and aluminum products are sold at artificially low prices in the U.S. markets and foreign market where U.S. producers export, putting jobs at local companies at risk. In addition, Schumer urged the USTR and Dept. of Commerce to implement and enforce previous laws that he has already supported, like the Level The Playing Field Act, which strengthens Commerce’s ability to defend American workers and producers against predatory trade practices.

According to the Organization for Economic Cooperation and Development, global crude steelmaking capacity more than doubled between 2000 and 2014, with growth during this period led principally by China. However, global demand for steel, including U.S. demand and Chinese demand, has decreased overall. Schumer said this discrepancy is due to the fact that Chinese companies have continued to produce these products at high rates, mainly through the aid of government subsidies and other market-distorting measures. Estimates of global excess steel production capacity range as high as 700 million tons, with as much as 425 million tons coming from China alone. China exported a record 123 million net tons of steel last year, up 350 percent from 2009. Many Chinese mills continue operating at a loss.

A copy of the letter Schumer sent with members of the Senate Finance Committee to the USTR and Dept. of Commerce appears below:


Dear Ambassador Froman and Secretary Pritzker,


Global overcapacities in steel, aluminum, and other basic commodities are significantly impacting global production, consumption, and trade flows of those products.  Much of this global overcapacity stems from foreign government subsidies and other market-distorting policies that are creating challenges for companies and workers across the United States and abroad.  In anticipation of the public hearing on the global steel industry that the Office of the United States Trade Representative and the U.S. Department of Commerce (DOC) are convening on April 12, 2016, we are writing to express our interest in these issues and to urge the Administration to take all appropriate action to address global overcapacity and related challenges.  In particular, we urge you to accelerate efforts to address global overcapacity through multilateral and bilateral fora.  We also urge you to enforce U.S. trade laws, including the recently enactedTrade Facilitation and Trade Enforcement Act of 2016 and theAmerican Trade Enforcement Effectiveness Act.

As the Organization for Economic Cooperation and Development (OECD) has noted, global crude steelmaking capacity more than doubled between 2000 and 2014, with growth during this period led principally by China.  Certain Chinese industrial policies to encourage capacity expansion, including through subsidies and other market distorting-measures, were an important contributor to this growth.  Meanwhile, global demand for steel, including U.S. demand and Chinese demand, has decreased.  As a result, significant increases in exports of Chinese steel have entered global markets, including the United States, impacting U.S. steel producers, steel consumers, steel industry suppliers, steel industry workers, and communities across the United States.

The current global steel situation highlights the reality of China’s economic system, which involves significant market-distorting policies and government intervention.  In a variety of industries, including steel and aluminum, Chinese firms (including state-owned or controlled enterprises) make investments in capacity that are commercially unjustified.  U.S. trade laws provide the Administration with opportunities to address several of these concerns.  Moreover, the recently enacted Trade Facilitation and Trade Enforcement Act of 2015 helps to ensure that granted relief effectively addresses unfair trade and that U.S. Customs and Border Protection is properly equipped to collect duties lawfully owed.  In addition, the recently enacted American Trade Enforcement Effectiveness Act modifies U.S. antidumping and countervailing duty laws to address aspects of the methodologies used by the DOC and the U.S. International Trade Commission to analyze petitions by companies and workers for relief from unfair trade practices.  However, effective utilization of U.S. trade laws requires that the Administration fully implement and enforce them, including by providing necessary resources for those purposes.  To this end, we will continue to monitor closely the Administration’s implementation and enforcement efforts.

Coupled with effective trade enforcement in the United States, global overcapacity concerns, as well as issues related to global market-distorting policies and government intervention generally, ultimately should be addressed through global solutions.  Therefore, we encourage the Administration to engage immediately with similarly situated trading partners to ensure durable, transparent, enforceable, and verifiable solutions to address global overcapacities in steel, aluminum, and other basic commodities.

We appreciate your careful consideration of these important issues and look forward to further discussions in the months ahead.


Charles E. Schumer

United States Senate


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