Congressional Steel Caucus Chairman Tim Murphy, R-Pennsylvania, on Thursday warned America faces a real risk of losing its domestic steel industry forever and becoming entirely dependent on foreign steel, which could be a significant risk of national security.
“The American steel industry now faces the greatest import crisis in modern history,” Murphy said at the Caucus’s annual State of Steel hearing in Washington D.C. “Mills are closing their doors and companies are laying off thousands. Pittsburgh’s U.S. Steel is tightening the belt to maximum efficiency because we’re at the tipping point, with U.S. mills averaging only 70 percent of capacity utilization, a level that is unheard of in recent years and is simply just not sustainable.”
The state of steel is precarious amid a record onslaught of cheap foreign imports, Murphy said.
“And despite the abilities, talents and needs, we are in real danger of losing this industry and becoming dependent on foreign countries,” he said. “We won’t let that happen. We can’t let that happen.”
Chief executives from five of the top steel companies, including ArcelorMittal and U.S. Steel, told members of Congress that unfair trade has resulted in nearly 13,000 layoffs in the industry.
“The American people — and this caucus — have declared that we must not rely on competitors or adversaries for vital elements of our national security,” U.S. Steel Chief Executive Officer Mario Longhi said. “I contend that no element is more vital and fundamental than steel. The time for speculation and hand wringing has passed.”
Longhi said it’s now time for Democrats and Republicans, government and the private sector, management and labor to come together on the issue.
“We must join forces to preserve and defend our way of life by ensuring American industries can complete vigorously and unencumbered by harmful foreign practices,” he said.
Those testifying blamed China for operating 425 million tons of steelmaking overcapacity, which has resulted in a glut of cheap steel on the international market. They pointed to a poll that shows 82 percent of voters blame unfairly traded foreign imports for the loss of U.S. manufacturing jobs.
“The American steel industry, as we see it today, is not sustainable, under the current conditions. However, we compete against governments around the world which support an industrial strategy of exporting excess steel, leading to record levels of imports into the United States,” said ArcelorMittal North America CEO Jim Baske.
The U.S. government needs to vigorously enforce U.S. trade remedy laws, he said. And the international community must come together to make clear to China that it needs to reduce its excess capacity in steel making.
The Congressional Steel Caucus sent letters Thursday to the Obama administration and European Union to ensure China remains classified as a non-market economy that’s subject to tariffs.
“The current level of global steel overcapacity is staggering, and we must do more to prevent this unused steel from being dumped on our shores,” Congressman Pete Visclosky said. “I am pleased that Congress passed two critical pieces of legislation in the past year to improve the enforcement of our trade laws.”
Visclosky assured steel executives and labor representatives that as the current session of Congress proceeds, he will continue to work with his colleagues and the Congressional Steel Caucus to encourage the effective implementation of the new protections and ensure a level playing field.