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Congress cracks down on tariff-ducking steel dumpers

Multiple-ton coils of steel are unloaded in July from the cargo ship Selinda by workers at the Logistec USA terminal at the state pier in New London, Conn. The U.S. Senate just passed a new law that will crack down on steel dumpers who evade tariffs. 

Days after Congressman Pete Visclosky told the Gary Chamber of Commerce that Congress was finally acting to save U.S. manufacturing jobs, the U.S. Senate passed a bill that will crack down on the cheap imports that have led to thousands of steel layoffs nationwide.

The Senate voted 75-20 on Thursday to approve what Sen. Dan Coats' office heralded as "the largest legislative reform in customs and enforcement policy in nearly 20 years."

The U.S. House had approved the measure last year.

U.S. steelmakers hailed the legislation as necessary at a time when cheap and often illegally subsidized imports captured a record 29 percent of market share. That's worse than it was when long-standing steelmakers like LTV and Bethlehem disappeared in the late 1990s and early 2000s.

The new bill, the Trade Facilitation and Trade Enforcement Act, will empower U.S. Customs and Border Protection to initiate steel dumping investigations when foreign steelmakers are suspected of evading anti-dumping and countervailing tariffs. And it will ensure the investigations don't drag on.

"By approving the customs bill today a majority of U.S. Senators voted to ensure strong enforcement of our trade remedy laws," American Iron and Steel Institute President and Chief Executive Officer Thomas Gibson said. "This is an important piece of legislation that gives U.S. manufacturing industries and their workers new tools to fight back against unfair trade."

The new law lets the federal government take action right at the ports if customs agents see that foreign steelmakers are ducking the tariffs that create a level playing field. Foreign steelmakers often get big government subsidies that U.S. steelmakers don't.

"Steel imports are decimating the American steel industry and it is imperative that we have the strongest tools and resources to fight back," Gibson said. "The ENFORCE Act would create new procedures at Customs and Border Protection to address the evasion of anti-dumping and countervailing duties within set deadlines."

Cheap imports ravaged the international steel industry last year, leading to the closure of century-old steel mills in Scotland and more than 12,000 layoffs in the Midwest. Most in the industry point a finger at China, which saw its own domestic demand for steel slow and flooded the international market with 120 tons of steel at an average cost of $60 per ton less than fair value.

Northwest Indiana's two largest steelmakers, ArcelorMittal and U.S. Steel, lost a combined $9.4 billion last year.

"Countless U.S. jobs have been lost because of predatory trade practices like foreign dumping, subsidies, and other unfair practices," Alliance for American Manufacturing spokesman Jet Moody said. "This bill gives U.S. companies and American workers the tools to fight back, making it easier to address trade cheating with reforms to the processes of handling allegations of trade law evasion."

Steel tariffs haven't been as effective in protecting the ailing domestic steel industry because they're being skirted, Steel Manufacturing Association President Philip Bell said. Foreign steelmakers have been getting around by transshipping products through third country or misclassifying the actual country of origin. 

"Rampant duty evasion undermines the impact of trade cases, thereby harming the domestic industry and its workforce," Bell said. "The passage of this legislation is an important step in ensuring that duties are collected and our nation’s trade laws are enforced."

President Barack Obama is expected to sign the bill, which includes an act from Sen. Coats that eliminates red tape for empty freight containers coming back to the United States, to make it easier for American manufacturers and farmers to export goods.

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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.