In a letter to U.S. Trade Representative Susan Schwab, Visclosky and 57 other members of the Congressional Steel Caucus called for the U.S. to address a recent announcement by the Chinese government that they will not reduce subsidies on pipe and tube steel products, making it the only sector in the finished steel industry that would not see an elimination or reduction in Chinese rebates. Visclosky and the Steel Caucus Members urged the USTR to address this issue at the U.S.-China Strategic Economic Dialogue summit which will be held on May 23rd and 24th in Washington DC.
“This sector of the U.S. steel industry has worked hard to reinvest, retool, and redirect its energies in recent years as competition for market share has escalated. It is an efficient industry and an integral component of the U.S. economy. In addition to the customers they serve, this industry is also an important customer to U.S. steel producers,” wrote Visclosky and the Steel Caucus Members to Trade Rep. Schwab. “While we respect the rights of all nations to conduct trade in an open and fair manner, the Steel Caucus is deeply concerned that these Chinese actions are explicitly targeting the critical downstream producers and workers of the pipe, tube, and fittings industry. We cannot allow these tactics to adversely affect this highest value-added segment of the domestic steel industry.”
China is a leading exporter of an array of steel pipe, tube, and fittings products. In fact, import data shows that Chinese imports increased 81 percent, from 350,000 to 631,000 tons, in the first quarter of 2007 over the first quarter of 2006. It is estimated that imports from China in 2007 will be approximately 3.9 million tons, or approximately 30 percent of the U.S. market. As illustrated on the enclosed chart, overall imports have consistently increased.
By not addressing this unfair advantage held by the Chinese steel industry, Northwest Indiana steelworkers could suffer. According to the Committee on Pipe and Tube Imports (CPTI), Allied Tube and Conduit, located in Harvey, Illinois, is one of the nation’s largest pipe and tube producers and has over 500 employees that live in Northwest Indiana. Allied is an important customer of the area steel mills because it purchases hot-rolled steel to make pipe and tube products.
“If we allow the Chinese steel industry to continue down the path they are on, we will see more outsourcing of American steel jobs, and the domestic steel industry will be weakened,” said Visclosky. “We must not let our own trade policies hurt our economic security, and I urge to Trade Rep. Schwab to immediately address these critical issues with the Chinese.”
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[COMPLETE LETTER TO U.S. TRADE REP.]
The Honorable Susan Schwab
United States Trade Representative
600 17th Street Northwest
Washington, DC 20508
Dear Ambassador Schwab:
We write today as members of the Congressional Steel Caucus on behalf of the domestic steel pipe, tube, and fittings industry and its 30,000 workers on a trade matter of the utmost importance to this industry.
We are very concerned that U.S. pipe, tube, and fittings producers are in danger of being forced out of their own market. On April 10, 2007, the Chinese government announced that they would reduce or eliminate a number of export rebates on steel products, including a rebate on 75 percent of their steel exports. However, the Chinese government did not agree to reduce or eliminate the export rebate on pipe and tube products. Instead, the export rebate of 13 percent remains in place, which will continue to give a direct incentive to the Chinese pipe and tube industry to export its products.
The ramifications of this decision for the U.S. pipe and tube industry and its workers are troubling. The Steel Caucus believes it is an appropriate time for the U.S. government to communicate with the Chinese government about this export rebate announcement. You will have an opportunity to do so at the upcoming U.S.-China Strategic Economic Dialogue summit, which will be held on May 23 to May 24, 2007, in Washington, DC. We request that you make this a prominent topic of discussion during the Dialogue.
China is a leading exporter of an array of steel pipe, tube, and fittings products. In fact, import data shows that Chinese imports increased 81 percent, from 350,000 to 631,000 tons, in the first quarter of 2007 over the first quarter of 2006. It is estimated that imports from China in 2007 will be approximately 3.9 million tons, or approximately 30 percent of the U.S. market. As illustrated on the enclosed chart, overall imports have consistently increased.
Industry observers agree that Chinese producers are targeting the U.S. pipe, tube, and fittings sector. For those in the standard pipe sector, who were deluged by a surge of imports from China and were denied Section 421 relief in 2005, the effects of this import swell have already begun. Several companies have closed facilities, and even more have furloughed workers. After recent meetings between Steel Caucus Members and domestic producers and workers, it is clear to us that this trend cannot be allowed to continue.
This sector of the U.S. steel industry has worked hard to reinvest, retool, and redirect its energies in recent years as competition for market share has escalated. It is an efficient industry and an integral component of the U.S. economy. In addition to the customers they serve, this industry is also an important customer to U.S. steel producers.
While we respect the rights of all nations to conduct trade in an open and fair manner, the Steel Caucus is deeply concerned that these Chinese actions are explicitly targeting the critical downstream producers and workers of the pipe, tube, and fittings industry. We cannot allow these tactics to adversely affect this highest value-added segment of the domestic steel industry.
Thank you for your serious consideration of our request. On behalf of these companies and their workers, we ask for your assistance and look forward to your response.
Sincerely,
