Time for America to Join the Fight and Revive Vital Industries

The American steel industry has been one of the hardest hit sectors in the economy over the past two decades.  It has shed thousands of jobs and has largely been pushed out of open market competition by overseas firms.  Making matters worse is the fact that one-fifth of the remaining U.S. steel mills are foreign owned.  They could either sell to overseas investors or close their doors forever. 

American companies are more than capable of competing with foreign mills; firms like Nucor Corp. produce steel using state of the art methods which reduce waste, pollution and energy demand. 

This firm has been given the misfortune of being improperly labeled as “protectionist” when all it is doing is demanding that other nations adhere to the agreements and commitments that they signed.  The United States does not violate its WTO accords, yet other countries around the world are allowed to do so without any repercussions. 

The simple fact is that nations around the world, particularly China, India, and Russia, illegally subsidize their steel industries and dump material into the market.  American producers – following the letter of the law – are unable to compete with prices and are driven from the market.   

Chinese steel should cost much more than it currently does, as the industry in that country is brand new and its logistical infrastructure is not in place.  China has very few of the resources needed to be a low cost producer of steel, and in fact, China is one of the world's highest cost steel makers.

The region imports virtually all of its iron ore, for instance, which is the basic virgin raw material used to make steel. The capital base of the region is very mixed; while many of China's newer steel mills are truly world class in their production, more are "backwards and polluting."

The Chinese have iron ore resources of their own, but accessing those materials is costly.  Nonetheless, their steel is somehow sold for half the price of its American equivalent. 

This is a blatant example of market dumping, price manipulation, and illegal subsidization.  Many leading experts, including Fed chairman Timothy Geithner, have pointed out China’s incessant manipulation of international currency, commodity, and export markets, yet nothing has been done to stop it.  Other countries use protective measures to save themselves from outside market forces, particularly hostile ones like China.  It is time for the United States to join the fight.

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