In her testimony, Klobuchar urged the International Trade Commission to hold Turkish and Mexican firms accountable for unfair trading practices that are damaging the American rebar industry
After a major push from Klobuchar this summer, the ITC voted in August to impose penalties on Korean companies dumping steel products into the U.S.
WASHINGTON, D.C. – U.S. Senator Amy Klobuchar (D-MN) today testified before the U.S. International Trade Commission (ITC) to press for a crackdown on Mexican and Turkish companies that are dumping steel in the U.S. In her testimony, Klobuchar urged the International Trade Commission to hold Turkish and Mexican firms accountable for unfair trading practices that are damaging the American steel reinforcing bar (“rebar”) industry. Klobuchar also sent a bipartisan letter today with 24 other senators calling on the ITC to prevent these foreign subsidies and dumping from further weakening the rebar industry.
“When foreign producers dump their rebar here, they deprive our own domestic steel industry the benefits of economic growth,” Klobuchar said. “Their unfairly priced rebar displaces the rebar produced by the mills in our country that employ American workers. That hurts the Americans who make our steel, and every American who is connected to them. It is critical that our trade laws are strongly enforced on behalf of American companies and workers.”
After a major push from Klobuchar this summer, the ITC voted in August to impose penalties on Korean companies dumping steel products into the U.S. In July, Klobuchar testified before the ITC to urge the agency to impose penalties on Korean firms to offset any gains they have achieved through illegal practices. The ITC’s ruling will impose antidumping duties on steel Oil Country Tubular Goods (OCTG) from South Korea, as well as India, Taiwan, Turkey, Ukraine, and Vietnam.
The full text of the Senator’s testimony to the International Trade Commission is below.
Testimony from U.S. Senator Amy Klobuchar:
Thank you so much for having me here. I was here just over a month ago and I am grateful for the opportunity to be able to speak about the economic impact of foreign dumping and subsidization of rebar production on my state and the really, really, major importance of enforcing our laws against unfair foreign trade practices.
I will admit sometimes I have come before you and spoken about things that I don’t always know what they are. Rebar? Any candidate for office knows what rebar is, because we use versions of them for our lawn signs. This was something that really hit home when I heard this.
I have argued before you about the major implications of steel dumping. I have often said that America needs to get back to the business of making things, and not just moving money around. American steel, including the rebar that goes into our buildings and our infrastructure, is essential to that goal.
But when foreign producers dump their rebar here, they deprive our own domestic steel industry of the benefits of economic growth. Their unfairly priced rebar displaces the rebar produced by the mills in our country that employ American workers. That hurts our workers who make steel, and every American who is connected to them.
Over 580,000 people are employed nationwide in the steel industry. This includes 30,000 rebar-related jobs in 33 states across our country, including the 379 employees in Minnesota at the Gerdau Long Steel mills in St. Paul and in Duluth. And I’m glad that three of those important jobs are represented here today by the leaders of United Steelworkers Local 7263. I’d like to recognize Chuck Nippoldt, Jason George, and Mike Wodaszewski who are here with us today. Especially Mike’s last name rings true for me being a Klobuchar with names that are hard to pronounce.
Chuck, Jason, and Mike work at the Gerdau mill in St. Paul. They can tell you that foreign dumping has an impact. Today, the mill in St. Paul employs 330 people, but last year 31 employees were laid off.
Today, the mill is only operating at about 70 percent of its capacity. Nationwide, our steel mills are only operating at about 60 percent of their capacity, and that is a historic low. So while manufacturing is coming back in our country, anyone that questions whether this matters or not or whether we’re to a point where we don’t need enforcement of these laws, I think that answers that for you when we are at the lowest rate of capacity that we’ve been at. This means of course reduced hours for our employees as the cost of everything from college to houses is going up, and also the threat of layoffs for our workers.
This isn’t the way it is supposed to be. The rebar produced in Minnesota goes directly into buildings, bridges, and mines. Steel production, from the miners in the Iron Range to the machinists in St. Paul, has a long and proud history in our state—it has supported our way of life for generations. When I was here last time I told you about my grandpa who worked 1,500 feet underground in the mines in Ely. I don’t think he would’ve ever imagined that his industry would have been competing with places in Mexico and Turkey. But that is what is happening today and we have to adjust just as those workers in those mines have adjusted over the years. We know our steelworkers can compete with anybody in the world when we have a level playing field.
The flood of foreign rebar into the United States is causing our domestic industry to lose sales and market share to underpriced foreign competitors. Between 2010 and 2012, Mexican and Turkish rebar imports into the United States increased by over 97 percent and expanded their market share from 7 percent to 17 percent.
And I think it’s important to note that these foreign competitors don’t necessarily have lower production costs than U.S. rebar producers. Turkey, for example, must import the raw materials in order to make rebar, has higher energy costs than the United States, and then has to transport its products here. Exporting rebar to the United States should not make economic sense for Turkey—but those exports continue anyway.
Mexico, meanwhile, has a severely restricted rebar market in which its own domestic consumers are charged prices that are 20 percent higher because of the lack of competition. Last year Mexico exported 300,000 tons of rebar to the U.S. while only allowing 13,000 tons of U.S.-produced rebar to enter into their country.
I am encouraged that the Commerce Department’s investigation has recommended significant dumping margins against Mexican rebar of between 20.58 and 66.7 percent. I hope you will support these findings and ensure that Mexican firms are held accountable for their unfair practices.
But I am concerned that the Department’s findings hold harmless Turkish firms for dumping and only minimal subsidization amounting to a 1.25 percent margin. The domestic industry has raised serious concerns about the methods the Department used in its investigation of Turkey, including how it calculated benchmark prices for energy subsidies and how prices of Turkish and American rebar were compared. I urge you to seriously consider these issues, as well as the overall harm to the domestic industry and the workers, as you review this case.
I do want to thank you for your good work on the steel dumping case. I can’t tell you how positive a lot of that work was, I know you take this seriously. And it is critical that our trade laws are strongly enforced on behalf of American companies and workers.
The rebar industry is vital to the economic prosperity of my state and to the country as a whole. And I just always think about those workers. A few of them are here today, so they can go back to tell the workers exactly what was going on here. But as we know, this is so far removed from the everyday lives of people who are struggling. You are their voice. You have to think about their concerns, because appearing before the ITC is not something they can imagine doing in their everyday life. This is something that is your job, and I really appreciate your willingness to do it and I hope you think through this carefully and I hope you think of those workers everyday who are just trying to do their jobs. Thank you very much.
Photo 1: Sen. Klobuchar testifies before the International Trade Commission (ITC) to press for a crackdown on Mexican and Turkish companies dumping steel into the United States.
Photo 2: Sen. Klobuchar meets with members of the United Steelworkers from Minnesota at the ITC hearing.