Following calls for action from Klobuchar, last week the Department of Commerce ruled that Korean companies are dumping steel into the United States and recommended imposing significant antidumping duties to help ensure the domestic industry can compete on a level playing field; now the final decision to impose penalties rests with the International Trade Commission
In her testimony, Klobuchar urged the International Trade Commission to rule in favor of the Commerce Department, U.S. steel companies and U.S. workers in the case and impose significant penalties on South Korean firms to offset any gains they have achieved through illegal practices.
WASHINGTON, D.C. – U.S. Senator Amy Klobuchar (D-MN) testified before the U.S. International Trade Commission (ITC) to press for a crackdown on Korean companies that are dumping steel into the United States. Following calls for action from Klobuchar and other senators, last week the Department of Commerce ruled that companies in Korea and eight other countries are dumping steel into the United States and recommended imposing significant antidumping duties to help ensure the domestic industry can compete on a level playing field. The final decision to impose penalties on the South Korean companies now rests with the International Trade Commission. In her testimony, Klobuchar urged the International Trade Commission to rule in favor of the Commerce Department, U.S. steel companies and U.S. workers in the case and impose significant penalties on South Korean firms to offset any gains they have achieved through illegal practices.
“Through the generations, our miners on the Range have proven they can compete with anybody in the world when it comes to providing quality steel,” Klobuchar said. “I don’t think my grandpa when he worked those 1500 feet underground in the iron ore mines ever thought of dumping practices or South Korean OCTG products coming in. He didn’t think about that. He just wanted to do a fair day’s work for a fair day’s pay. The miners of today deserve that same treatment.”
“Unfortunately, unfair trading practices by foreign companies are compromising our businesses’ ability to compete and putting steelworker jobs in jeopardy,” Klobuchar added. “Now that the investigation has found clear evidence of Korean companies dumping steel into the U.S., the ITC needs to impose penalties on these firms and continue cracking down on illegal trade practices that hurt local economies in Minnesota and across the country.”
Earlier this year, Klobuchar and a bipartisan coalition of Senators, including Senator Franken, sent a letter to Commerce Secretary Penny Pritzker urging the agency to thoroughly investigate allegations of Korean companies dumping steel in the United States and to take action against any unfair foreign competition. The Senators’ bipartisan call for further investigation came after the Department of Commerce initially determined that no dumping was occurring.
The full text of the Senator’s testimony to the International Trade Commission is below.
Testimony from U.S. Senator Amy Klobuchar:
Chairman Broadbent, Vice Chairman Pinkert, and distinguished Commissioners, I am grateful for the opportunity to appear before you today to speak about the economic impact of foreign dumping of Oil Country Tubular Goods, also known in this room as “OCTG,” on my state and the importance of supporting the Commerce Department’s antidumping determination against foreign producers.
Dumping of steel products has significant economic implications. The OCTG steel produced for the U.S. energy market accounts for approximately ten percent of domestic steel production. U.S. producers of OCTG directly employ nearly 8,000 workers across the country and every one of those jobs in turn supports another seven jobs in the supply chain, including those in my state involving the mining of iron ore.
Mining has always been a way of life in Minnesota, in Northern Minnesota, known as the Iron Range, those are my roots. Throughout our state’s history mining has not only brought jobs to the region, it has also built our country, from our roads, bridges, buildings and railways to the tanks and ships critical to our nation’s defense. Minnesota’s Iron Range boasts the largest concentration of iron ore in the world, and supplied most of the iron used in World War II.
My own family is part of this tradition. My grandpa worked in the mines in Ely, Minnesota most of his life. He went to work in the mines when he was only 15 years old. When his parents died, he had to raise many brothers and sisters along with his brother. At 15, he quit high school and went to work in the mines in Ely. He ended up being the foreman of the mine, and I’ve met many people whose relatives worked with my grandpa. They’ve told me stories about how my grandpa, when they had to explore a new and more dangerous part of the mines – this was underground mining – he never would stand at the top and radio down. He would always go first, and he would always go with the miners.
All that time, he saved money in a coffee can in the basement, while he worked 1500 feet underground, to send my dad to college. My dad went to a two-year community college in Ely. He went on to the University of Minnesota. He graduated with a journalism degree, and he went on to become a journalist, and interview everyone from Ronald Reagan to Mike Ditka to Ginger Rogers. All starting at that hard-scrabble mine in the Iron Range region of Minnesota. I learned values of hard work from my grandpa and from my dad, and I learned perseverance from them, and that is why I feel so strongly about making sure that we give these workers on the Iron Range and these American companies a fair shot.
This region is no stranger to tough times. Throughout its history there have been booms and busts. There is nothing harder on the workers than when a mine closes down. That’s what happened to my grandpa. He went on then to become a logger. It happened to so many workers on the Iron Range. But he never gave up, and the people of Northern Minnesota have never given up.
Right now we are first in the nation in the movement of iron ore. Our state is with more than 10,000 high-quality steel-related jobs. We boast companies like U.S. Steel and Cliffs Natural Resources, and that’s why this issue is so important in our state.
Through the generations, our miners have earned a reputation for possessing a very strong work ethic. They have proven that they can compete with anybody in the world when the playing field is level. Unfortunately, that fairness is being compromised by the foreign trading practices that are putting all steel-related jobs, including those in mining, in jeopardy.
The flood of foreign steel into the United States is causing our domestic steel industry to lose sales and market share to underpriced foreign competitors. That is simply what is going on. While the U.S. demand for steel products is increasing, which is a great thing, American producers are not seeing the benefits that they should.
In fact, imports of these steel products have doubled since 2008. This year alone we have seen a 61 percent increase over last year. This is already having an impact in American facilities with reduced hours and the threat of layoffs for our workers.
One of the most significant examples of the growth of foreign OCTG exporters is South Korea, which has a large steel industry but has virtually no domestic market. South Korean firms produce OCTG for export, and their exports to the United States have greatly increased over the past five years. In May 2014 alone, South Korean exports of these steel products to the U.S. reached 213,000 net tons. That exceeds total South Korean OCTG exports to the United States in all of 2009.
I am very concerned that this vast expansion of South Korean OCTG exports to the U.S. was facilitated through efforts by South Korean firms to circumvent our trade laws, including by providing misleading data to the Commerce Department investigators. Since South Korea has no domestic OCTG market, it is easier to hide whether they export steel product being sold below market value.
The Commerce Department’s investigators had to make this determination based on information provided by the very same South Korean firms being investigated for undervaluing the OCTG in the first place. And some of the data received by the Commerce Department from these South Korean firms apparently pertained to steel goods that cost less than OCTG.
Because of these troubling allegations, 57 senators, Democrats and Republicans including Senator Sherrod Brown and Senator Casey and Senator Franken from my state, sent a letter to the Commerce Secretary expressing concern that the antidumping investigation may not have been receiving accurate information from Korean producers.
I am glad that this letter helped encourage the investigators to more closely examine these imports for any misrepresentations in origin and in how they fix the categories. The final determination by the Commerce Department found clear evidence of OCTG dumping by South Korean firms, as well as eight other countries dumping these products into the U.S. market.
Now that the investigation is complete, it is time to impose these duties to offset any gains of these foreign exporters that have been achieved through illegal practices. It is critical that our trade laws are adequately enforced on behalf of American companies and workers in this important area. And that is why your actions are so important today. The steel industry is vital to the economic prosperity of my state and the country as a whole, and it must remain competitive – and the miners of the Iron Range are nothing if not competitive. But they also need to be allowed to compete on fair terms.
I don’t think my grandpa when he worked those 1500 feet underground in the iron ore mines ever thought of dumping practices or South Korean OCTG products coming in. He didn’t think about that. He just wanted to do a fair day’s work for a fair day’s pay. The miners of today deserve that same treatment.
I strongly urge you to make an affirmative determination in this case and support the Commerce Department’s final determination.
Thank you for the opportunity to testify today.