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Steel industry, union herald talks on overcapacity
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Steel industry, union herald talks on overcapacity

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Steel tariffs created 3,200 steel jobs, reduced imports by 27%

The steel industry and United Steelworkers union are supporting international talks to address global steel overcapacity. The Cleveland-Cliffs' Indiana Harbor steel mill is shown.

The U.S. steel industry and the United Steelworkers union heralded upcoming talks between the federal government and Europe to address ongoing problems with steel and aluminum overcapacity.

The U.S. Trade Representative and Secretary of Commerce announced the start of bilateral talks with the European Union about a systemic issue that's dogged steel producers in the United States and around the world for decades. A glut of steelmaking capacity has affected steel prices, profitability, mills and job security.

“We appreciate the announcement today that USTR and the Department of Commerce will be working with their EU counterparts to address the issue of global steel excess capacity, which has adversely impacted the American steel industry for many years," American Iron and Steel Institute President and CEO Kevin Dempsey said. “We are grateful for the administration’s commitment to addressing this crisis, to preserving and improving measures to address unfair trade and to recognizing that the American steel industry is critical to our national and economic security."

The world is estimated to have around 650 million tons of excess steel capacity, according to the Organization for Economic Co-operation and Development. Many in the steel industry have pointed to China's state-run steel companies, which are not subject to the same market forces as steelmakers in other countries.

Great Lakes steel production rose by 5,000 tons last week, while U.S. steel mills remained close to 80% of capacity, according to the American Iron and Steel Institute. But national steel output is up more than 44% year over year after steel mills sunk to half capacity early on in the coronavirus pandemic around this time in 2020.

“To be successful, the bilateral discussions must take into account that, while China is the single largest source of global steel oversupply, subsidies and other market-distorting policies in many countries are contributing to the overcapacity crisis — and that injurious surges in imports have come from every region of the world," Dempsey said. “Achieving an agreement that produces real results for our industry will take time and will not be easy. However, I am hopeful that the U.S. government can work with the EU toward substantive solutions to the global overcapacity crisis in steel while maintaining the necessary trade measures to prevent surges in steel imports that could quickly undermine the U.S. industry and our national security."

United Steelworkers International President Tom Conway said any trade agreements must benefit American steelworkers.

“It’s no secret that the U.S. steel and aluminum sectors have been victimized by foreign unfair trade practices and global overcapacity. While China is the principal driver of the problems facing producers here in the United States, others also contributed to this injury," Conway said. “As the United States and European Union engage in bilateral consultations, we are supportive of efforts to resolve the threats to our producers and our members. However, we cannot support any approaches that do not provide measurable positive results. The EU is an important ally, but in the past, it has been part of the problem, not part of the solution."

The USW will continue to discuss long-term solutions to ongoing trade programs with the federal government.

“We have more than 40 unfair trade relief measures in place against EU steel and aluminum products that resulted from their dumping and subsidies targeted at our market. The USW supported addressing global overcapacity through the OECD and in the Global Steel Forum, but the EU did little to advance those talks," Conway said. “Bilateral discussions provide the opportunity to resolve the challenges in these sectors and align U.S. and EU actions on trade."

Coming Sunday, ride along with Specialist Dyer as he patrols LaPorte.

Conway stressed the importance of preserving a U.S. steel industry at a time when American businesses have suffered from multiple pandemic-induced shortages, including of semiconductors, bicycles and flowers now produced almost entirely abroad. 

“Steel and aluminum are crucial products for our national and economic security and our critical infrastructure. We are hopeful about reaching a solution, but we are equally determined to avoid any approaches that undermine the strength of our industry and the opportunities provided to U.S. workers.”

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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.

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