A major investigation has been launched into whether foreign steelmakers are dumping subsidized steel in the United States at cut-rate prices.
The U.S. International Trade Commission ruled Friday that India, South Korea and seven other counties are harming domestic steelmakers by flooding the U.S. with cheap steel for gas and oil pipelines.
The preliminary finding means the U.S. Department of Commerce will continue forward with an investigation into whether the imports are below fair market value, and if tariffs should be imposed to raise prices.
U.S. Steel and several other major steelmakers filed a complaint alleging the violation of trade laws that prohibit exporting subsidized steel products. The Pittsburgh-based steelmaker has local operations in East Chicago, Gary and Portage.
"This is an extremely important case for our company," said John Surma, chairman of U.S. Steel.
Northwest Indiana's other steel giant, ArcelorMittal, makes steel products for the pipe and tube industries at its Indiana Harbor mill in East Chicago.
Domestic steelmakers protested that India, Korea, the Philippines, Saudi Arabia, Taiwan, Thailand, Turkey, Ukraine, and Vietnam have been dumping steel to take advantage of the explosive growth in shale gas-drilling. Imports from those countries have soared by 111 percent over the last few years, according to the American Iron and Steel Institute.
U.S. Rep. Pete Visclosky and other members of the bipartisan Congressional Steel Caucus backed the petition, and lobbied for tariffs that would raise the price of imports.
"I am pleased that the U.S. International Trade Commission took a step toward affirming the concerns of the steel caucus today and acknowledged that unfair trade puts American steelworkers and our manufacturing base out of work," Visclosky said.
"As this case proceeds, I will not stop fighting to level the playing field for American workers."
The U.S. Department of Commerce will determine in September whether to impose countervailing duties that would offset the foreign subsidies, and would rule in December on whether to impose tariffs designed to discourage dumping.
"The U.S. laws against unfair trade exist to counter market-distorting practices -– like dumping and subsidies -– and to restore conditions of fair trade," said Thomas Gibson, president and chief executive officer of the American Iron and Steel Institute. "U.S. companies and their workers deserve to have a fair shake."
Rival industry association The American Institute for International Steel, which advocates for free trade, decried the commission's vote as overkill.
Domestic steelmakers are still operating profitable pipeline businesses, because the demand is booming, President David Phelps said. Both domestic and foreign steel products are needed to keep up with the growth in gas and oil distribution.
"While AIIS acknowledges that some overly aggressive suppliers had created an inventory overhang in the U.S. market, the domestic industry is profitable, investing and growing its capacity in response to increased oil and gas drilling in the United States," Phelps said.