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Find a job: Unfair trade puts steel jobs at risk

An oversupplied global steel industry is a growing threat to jobs and profitability of U.S. steel manufacturers such as AK Steel Holding Corp., according to a new report released May 13.

Following the Great Recession, steelmakers from other countries, subsidized by their governments, have added capacity to make more steel than what’s demanded globally, according to findings of the report by the Economic Policy Institute and Stewart and Stewart. Both are Washington, D.C.-based firms. The steel is sold at unfair prices in the U.S., which threatens the domestic industry’s ability to recover from the economic downturn, the report’s authors say.

As a result, the U.S. steel industry is facing its worst import crisis in more than a decade, researchers say.

Supporters of the American steel industry are urging legislators and the Commerce Department to enforce trade laws to remedy the problem.

“One of the chief takeaways of this report is the dramatic amount of overcapacity that exists globally in the steel industry where at the same time U.S. capacity utilization is still well below normal levels,” said Scott Paul, president of the Alliance for American Manufacturing.

“The last time we saw a dynamic like this after the Asian financial crisis at the end of the 1990s, the result was very ugly,” Paul said.

“A lot of companies were forced into bankruptcy. One of the last lines of defense that the steel industry and workers have are trade laws and unless these trade laws are effectively and aggressively enforced, America will see job loss,” he said.

The numbers

Steel imports into the U.S. have more than doubled since 2009, according to nonprofit research group Economic Policy Institute and law firm Stewart and Stewart. Imports grew to 32 million tons in 2013, an increase of 12.3 percent from 28.5 million tons imported in 2011. As of the end of February this year, steel imports are tracking 24.5 percent higher than a year ago.

More than 583,000 jobs across the country are related to steel production.

“Those jobs are imminent danger. This import surge has led to sharp declines in income in the steel industry, layoffs for thousands of workers and reduced wages for many more,” said Robert Scott, director of trade and manufacturing policy research for Economic Policy Institute. He is one of the report’s authors.

What’s at risk

Ohio ranks fourth nationally for the number of jobs in the steel industry behind Texas, California and Pennsylvania. There are 33,900 people at risk in Ohio of losing their jobs from displaced steel production.

“We have an opportunity to grow the economy by investing in manufacturing, but our producers are increasingly losing business to competitors overseas that simply don’t play by the rules,” said Sen. Sherrod Brown, D-Ohio.

Local impact

West Chester Twp.-headquartered AK Steel makes carbon, stainless and electrical steels at seven plants in Ohio, Kentucky, Indiana, Pennsylvania and Minnesota. The Fortune 500 company employs more than 6,000 workers in total, including approximately 2,400 full-time jobs in Butler County at its headquarters and its largest steel plant Middletown Works.

In 2013, AK Steel filed anti-dumping and countervailing duty petitions with the U. S. Department of Commerce and the U. S. International Trade Commission.

Anti-dumping duty petitions were filed against six countries and countervailing duty petitions were filed against three countries.

The petitions claim that unfairly low-priced imports of non-oriented electrical steel are causing material injury to AK Steel. The Butler County steelmaker also is alleging that electrical steel producers in China, Korea and Taiwan are heavily subsidized by their countries’ governments.

Non-oriented electrical steel is a type of alloy used primarily in the production of motors and generators, according to the company.

Also on May 5, Commerce announced preliminary determinations that imports of grain-oriented electrical steel from China, the Czech Republic, Germany, Japan, Poland, Russia and South Korea are being sold at less than fair value. U.S. Customs and Border Protection officials were instructed to begin requiring electrical steel importers from these seven countries to pay anti-dumping duties at the time of importation.

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