13,000 Alabama jobs are at risk, but the problem has gotten relatively little attention, possibly because it is somewhat complex and not in an area that typically gets a lot of headlines — international trade law.
So what is going on?
In short, the Obama Administration’s refusal to vigorously and fairly enforce trade laws is straining the U.S. steel industry, which directly and indirectly employs 13,000 individuals in the Yellowhammer State.
In an effort to squeeze out U.S. manufacturers, nine countries (especially South Korea) are currently flooding the United States with steel pipe that they appear to be selling at a price below the cost of production. That practice is commonly referred to as “dumping,” which many economists say constitutes unfair competition.
This is not the first time this has happened.
During the Bush Administration, “Chinese companies aggressively dumped (steel pipe) product(s) into the U.S. market,” Alabama Senate President Pro Tem Del Marsh explained in a recent op-ed. “Pipe mills across the country, including those in Alabama, closed or significantly reduced their operations. The American (steel pipe) market was essentially shut down and thousands of steelworkers were left without jobs.”
International trade law gives countries the option of taking action against dumping to protect their domestic manufacturers. The U.S. Commerce Department is tasked with intervening in such situations to make sure the playing field is level for American companies.
The American steel industry fought against the illegally dumped Chinese imports and won.
In July of 2013, U.S. steel producers filed another trade case, this time against the nine countries currently engaged in dumping — India, Philippines, Saudi Arabia, Taiwan, Thailand, Turkey, Ukraine, Vietnam, and South Korea.
But when the Dept. of Commerce announced their preliminary findings earlier this year, they chose not to impose anti-dumping duties on South Korea to protect domestic industries from unfair competition.
Shares of U.S. Steel, which has a large operation in Alabama, plummeted in the wake of the Commerce Department’s preliminary ruling, but the final determination on the case is expected this week, possibly as soon as Tuesday.
Federal elected officials from both sides of the aisle have recently called on the Obama Administration’s Department of Commerce to support the domestic manufacturers.
In a letter to U.S. Dept. of Commerce Secretary Penny Pritzker, five Alabama congressmen — including the delegation’s lone Democrat — and both Alabama senators urged the Commerce Department to “take action against any unfair dumping to the fullest extent of the law.”
“Strict and full enforcement of our trade laws is essential for the future of the U.S. steel industry, its workers, and steel communities throughout the country,” they wrote.
In addition to U.S. Steel, Nucor, the largest steel producer in the United States, has five Alabama facilities and over 2,000 employees, and ACIPCO of Birmingham is the world’s largest, single-site manufacturer of ductile iron pipe.
With 16,000 Alabama coal jobs already in the Obama Administration’s crosshairs, Alabamians should pay especially close attention to what the Department of Commerce does — or doesn’t do — to protect our steel jobs.
Follow Cliff on Twitter @Cliff_Sims
