[Page: H625]---
The SPEAKER pro tempore (Mr. KIRK). Under a previous order of the House, the gentleman from Pennsylvania (Mr. ENGLISH) is recognized for 60 minutes.
Mr. ENGLISH. Mr. Speaker, America is at a critical moment. The domestic steel in its industry and the current workforce retirees and their dependents are clearly at a vital crossroad. Without strong relief under the section 201 action that this administration has called forth utilizing that section of our trade laws, the future of the industry is clearly grim. Thousands of steelworkers already have lost their jobs, and thousands more jobs are at stake. Beyond that, pension and health care benefits are in jeopardy for hundreds of thousands of retirees. Now is the time to provide relief for this beleaguered domestic industry.
The Bush administration took the vital first step by initiating the 201 investigation, and now the results are in. The investigation demonstrated what the industry and its workers have known all along, the rest of the world is not playing by the same set of rules. Meaning, the steel score sheet has long been skewed to provide foreign competitors with an unfair handicap, making it unnecessarily difficult for U.S. producers to compete. That has to stop.
Mr. Speaker, this may be hard for people to see up here, but let me assure you that the subsidies our domestic
[Page: H626]
Looking at this graphic, this minuscule yellow bar down here represents the U.S. government subsidies, while this tower next to it represent the $90 billion in subsidies our leading competitors have received since 1980 in the steel sector. The amount of subsidies to foreign producers have outnumbered and outshone by those in the U.S. by a factor of more than 8 to 1. Substantial relief under section 201 is a move toward eliminating that handicap as well as others, putting the U.S. on a level playing field and staving off a permanent liquidation of this strategic industry.
Inaction or weak action would silence many steel plants, while destroying the livelihood, the good-paying jobs of the workers, their families and communities, and dealing a blow to our national economy and to our national security.
I applaud the Bush administration for stepping up to the plate for the American steel industry and its workers, something that previous administrations had been reluctant to do.
With that, I urge the Bush administration in the next week in making a decision on this steel 201 to knock the ball out of the park by imposing credible tariffs over the next 4 years.
There will be a number of speakers joining me tonight. The first of these is the gentleman from Illinois (Mr. SHIMKUS), and I yield to him.
Mr. SHIMKUS. Mr. Speaker, I want to thank my colleague, the gentleman from Pennsylvania (Mr. ENGLISH), for his work on this and for his work for his constituents in Pennsylvania.
We have would not be here if the President had not invoked section 201; and we would not be here if the ITC, the International Trade Commission, had not found in essence in our favor that there has been some illegal dumping.
We hear a lot on trade, and a lot of the debate stems around free and fair trade. I think it is pretty clearly evident that when trade is not fair then we need to do just what we did in this case so far. What we have done so far is asked for a section 201 hearing that has been found in our favor, and now the administration has to finish the deal. They have a deadline of March 6 in which they are going to recommend the type of penalties that this country would like to see to get our steel industry back on sound footing; and, as with every other issue, there is always a debate of what those penalties should be.
Well, the Steel Caucus, which the gentleman chairs and which we have many members of, have tried to weigh in on this. We have sent a letter to President Bush asking for a minimum of 40 percent tariff to be implemented over 4 years on all imported steel products. That is what we can do now, and I am glad to have signed that letter and sent that.
But I also had a chance to personally speak with Secretary Evans on this issue and reiterate the importance of some strong, strong penalties, not only to help our domestic steel industry, but it sends a signal to the rest of the countries that we want to trade and do business with. We can compete with them. We cannot compete with them if they have subsidized their production, and that is what they do by a term called dumping, which means foreign countries are selling steel to us at below-market prices, usually subsidized by their own government.
The International Trade Commission's ruling, they said that we in our domestic steel industry suffered serious injury due to the surge in imports. So that is why we need a substantial tariff for a maximum length of time, because the majority of steel that is making its way to America from off shore is being heavily subsidized.
The imposition of tariffs over a 4-year period will demonstrate to foreign producers and governments that this administration is serious about addressing the problem of foreign excess steel capacity. And it is kind of ironic that our European allies, from what I understand, are not supportive of our heavy tariffs because they fear that if we are successful then they will be the target for the illegal dumping of steel and then they will have to deal with this issue.
So we need to make sure that our allies and friends understand that steel is also a national security issue and it is important for us to have that domestic capability.
The administration must take this lead in developing a plan to address the critical legacy costs which are preventing the industry from restructuring. The progress of the President's comprehensive steel strategy demonstrates once again his strong, decisive leadership on behalf of America, American workers and American families. It is now time to take the next step and implement a remedy that would be advantageous to the U.S. steel industry. I am confident that this Congress working with this President will provide help for those who have lost their jobs and benefits as a result of the bankruptcy of the steel industry.
The 40 percent tariff that we suggest would bring the domestic steel industry back to a level playing field with foreign competitors and hopefully bring an end to the steel crisis in our country, not only for the factory itself, but for the workers, and not just for the current day workers but for the retirees.
I appreciate all the gentleman from Pennsylvania (Mr. ENGLISH) has done on this behalf since the day he arrived here. We have made great inroads in working it together across the party lines and the caucus. And I am really proud of what the President has done with this issue. Now we want to him finish the job and get the work done.
Mr. ENGLISH. Mr. Speaker, I want to thank the gentleman, and I want to thank him for his personal involvement, for his work with the administration, for helping to bring there issue to the fore, at a very, very critical time when we can still save our domestic steel industry. I thank him for being involved in the Steel Caucus.
Mr. Speaker, I yield to another gentleman from Illinois (Mr. PHELPS), who is also a member of the Steel Caucus.
Mr. PHELPS. Mr. Speaker, I thank the gentleman from Pennsylvania (Mr. ENGLISH).
I first want to commend the gentleman on his firm leadership in bringing this issue to the forefront of the American people. Those who are not associated with the steel industry may not be aware just how serious this situation is, and I want to associate my remarks with my friend and colleague, the gentleman from Illinois (Mr. SHIMKUS). We are fighting the same battle.
Let me state, Mr. Speaker, I rise to discuss the crisis the steel industry faces. The American steel industry and the steelworkers are in the midst of possibly the worst crisis ever due to the continued illegal dumping into this country of foreign-made steel.
Thousands of steelworkers have lost their jobs, and countless more are in jeopardy. In my congressional district in Central and Southern Illinois the effects
have been devastating. Yesterday, I attended a steel rally in Greenwich City, Illinois, and was able to hear firsthand the effects this has had on the local economy.
Now is the time to institute the highest tariff levels of at least 40 percent if the steel industry is to recover.
Last year, the President directed the International Trade Commission to undertake one of the most extensive and complex investigations into the section 201 history. I applaud the President for this leadership, very much needed assistance for an ailing industry. The International Trade Commission ruled unanimously that nearly 80 percent of the product lines of the American steel industry have been seriously damaged by surges of low-priced foreign imports. The most severe violations of U.S. trade laws have taken place since 1998.
The devastating impact that low-priced steel imports have had on American steel companies is amply evident; and, as a result of foreign dumped steel since 1998, 31 steel companies have filed for bankruptcy nationwide. Of these, four are located in my home State, Illinois, which has caused over 5,000 Illinois steelworkers to lose their jobs.
The International Trade Commission has recommended the President impose tariffs of up to 40 percent on a broad variety of steel products over a 4-year period. I strongly urge the President to impose the highest tariff rate for 4 years on all subject steel categories as the first step in saving our American steel industry and the jobs and the health insurance of Illinois steel makers and over 50,000 retirees in Illinois.
The domestic steel industry has invested billions of dollars in upgrading
[Page: H627]
In this body last year we have deliberated several trades issues and even this year. Some are disagreed upon and some have total agreement, and it is not even by party lines. Unfortunately, it is by geographical, cultural differences, many times, rather than party line.
And we have a healthy debate. One was such as permanent normal trade relations with China. The reason I resisted that proposition and opposed it is that in my 19th District in Illinois we are exporting jobs because of trade policies such as free trade and the P.N.T.R. motion that we looked at and debated on this floor.
[Time: 19:45]
I know that many people have stock in the fact that this will help us, our country; but I say right now, in the 19th district, that is just the opposite case.
We had 10 years of China breaking their word, violating their contracts with this country on items that left us $82 billion in trade deficit. Now, the reason I mention that is in this context. One blow after another to the American worker is adding to a serious situation not only of our economy but the quality of products that we produce even for our defense system; and that borders on compromising our national security.
I yield back to the gentleman and thank him for his courtesy.
Mr. ENGLISH. I thank the gentleman, and I will resume making some of the points I had been making; and then, in a few minutes, I will recognize another member of the steel caucus, the gentleman from Ohio (Mr. BROWN), who has been a leading advocate of this cause.
Summarizing the last two speakers, it is clear that the International Trade Commission has given the Bush administration the tool that it needs to get action. Tariffs in the range of 40 percent are clearly needed if the industry is to recover. But, Mr. Speaker, we recognize the March 6 decision is only the first inning; 201 action must be followed by a concrete commitment from our trading partners to reduce inefficient global overcapacity.
Again, I have to congratulate the President for his understanding of the issue and his foresight in initiating the OECD talks. Beyond that, we must look at ways to address the industry's legacy costs, clearing the way for a domestic steel renaissance. Continued cooperation between Congress and the Bush administration is the only way of ensuring the viability of the domestic steel industry.
Let us think a minute about the fundamental causes of this crisis. In my view, one of the underlying causes is a massive foreign inefficient overcapacity. Looking at this graphic, as my colleagues can see, from 1998 to 2000 the United States consumed 131 million metric tons of steel, while the former Soviet Union, which is NIS on that graphic, alone produced 114 million metric tons. The entire foreign excess raw steelmaking capacity averaged 268 metric tons, which is more than twice the level of average U.S. steel consumption. Massive foreign steel overcapacity, created and sustained by abusive government subsidies, protected markets and anticompetitive practices, resulting in a diversion of excess steel products into the U.S. market.
Going to the next graphic, it is obvious that raw steelmaking capacity has greatly exceeded steel consumption in many areas of the world during the last 3 years. Again, the former Soviet Union is producing more than 120 million metric tons of steel than it needs. Even Brazil is producing almost 20 million more metric tons of steel than it needs for domestic consumption. And make no mistake, the excess production is being dumped in our domestic market. And they say it is our fault.
Mr. Speaker, a key point to understand is that American steel companies and their workers have already done their part to create a world-class competitive industry during recent years. They have invested more than $60 billion in steel plant modernization since 1980 to become among the most productive steel producers in the world with as few as 1 1/2 man hours needed per ton of steel produced. To achieve these advances in productivity, the U.S. steel industry reduced capacity by more than 23 million tons, closed numerous inefficient mills, and significantly cut jobs. The workers have endured their fair share of economic pain and sacrifice as the workforce was reduced by hundreds of thousands of workers in an effort to become the most efficient producers of steel.
As this graphic reflects, U.S. productivity measured as output-per-worker has nearly tripled since 1980, according to the U.S. Commerce Department. These are the official statistics. The industry average has gone from using 10 man-hours to produce a ton of steel to just 4, all the while the net shipments of steel have grown from just over 90 million tons to 110 million tons. That is extraordinary. But when competing with the unfair trading practices of our foreign competitors, it is simply not enough. Much of the world's major steel markets have formal steel import barriers to foreign steel or are subject to international market-sharing arrangements by foreign steel exporters. These cartels are aimed at us.
Obviously, Mr. Speaker, the steel industry is the victim of predatory trade practices, and we desperately need strong relief under section 201 of the U.S. trade laws. This is allowable under the WTO rules. In this case, the International Trade Commission determined damage has occurred and made recommendations for tariffs to the President. The March 6 deadline for the Bush administration to make a decision is fast approaching. I call upon the President to recognize the needs of our domestic industry. Significant relief is necessary in order to return steel prices to their normal precrisis levels and allow American steel companies to make the necessary investments to remain viable and competitive in the future while providing good paying jobs.
Tariff rates must be substantial in order to ensure that import prices return to market-based levels. The section 201 remedy must be enforced for at least 4 years to allow the domestic steel industry to make the necessary adjustments to be competitive. A shorter duration, I feel, will simply be ineffective.
Section 201 relief must not replace existing orders under the antidumping and countervailing duty laws. If these orders are set aside, hard won as they are, any remedy will be perversely rewarding those foreign producers that engage in unfair trade. That is something that I would think we all would agree we do not want.
To further these remarks, I would like to yield to the gentleman from Ohio (Mr. BROWN), a member of our caucus, a gentleman who has been very involved in the steel issue from the get-go.
Mr. BROWN of Ohio. Mr. Speaker, I thank the gentleman for yielding to me and for his leadership on steel issues as American workers and corporations try to fight back against this terrible situation that we have seen coming for the last 3 or 4 years.
The U.S., as we know, has become the world's steel dumping ground, costing U.S. jobs, hurting U.S. families, and damaging the U.S. economy. During the 1998 steel crisis, the trade deficit in steel was almost $12 billion, accounting for nearly 7 percent of our overall trade imbalance. We have known from other Special Orders in this body and from other debates in this body that legislation like NAFTA, GATT, which formed the World Trade Organization, PNTR, giving special trading privileges to China, and Fast Track legislation, which passed this body by one vote last year, that this body of trade law that this Congress in my mind has wrongly passed, has damaged this country and that has put us in this situation where we have these huge trade deficits. And our steel deficit is one of the major parts of that.
That means that we are buying a lot more steel in this country than we are exporting, $11.7 billion worth. The bulk
[Page: H628]
Today, we import 39 million tons of steel, more than double the amount we imported in 1991, and steel prices are below 1998 levels. The surge in illegally dumped steel has obviously been incredibly damaging to the domestic steel industry. Since 1998, 26 steel companies have filed for bankruptcy, 17 in the last year. That includes three in my State, including LTV in Cleveland, including RTI in Lorain, where there is a major plant in Lorain and the community which I call home.
Steelworkers from LTV and RTI are learning firsthand how unfair competition is destroying America's ability to make steel. The White House and the Congress must respond. Congress must pass H.R. 808, the Steel Revitalization Act. It has bipartisan cosponsors, the gentleman from Pennsylvania (Mr. ENGLISH), the gentleman from Illinois (Mr. PHELPS), who was here earlier, and 200-plus Members of this body who have cosponsored that bill.
The Republican leadership, the gentleman from Texas (Mr. DELAY), and others, have refused to schedule it for a floor vote. It would make all the difference in the world in revitalizing this Nation's steel industry. Because this Congress has failed to act, because the Republican leadership in this Congress has not given the means to even allow us to have a vote on these very crucial issues to protect American steel, it is up to the President.
On March 6, the President will announce his decision on the recommendation of the International Trade Commission for tariffs on illegally dumped steel. We need a strong response. As the gentleman from Illinois (Mr. PHELPS) and others have said, we need a 40 percent tariff, which is what the ITC has recommended, if the President goes along.
A year and a half ago we heard Vice President Cheney, while in Weirton, West Virginia, say we will never lie to you. If our trading partners violate trade laws, he told steelworkers, we will respond swiftly and firmly. We need the administration's swift response; we need their firm response on steel dumping now more than ever.
If they are sincere about helping steel, and I take them at their word, although there has been a pretty big delay in the President acting, he was originally supposed to act in mid-February, and every day the President fails to act, every day of delay causes more duress to the American steel industry, more layoffs, more bankruptcies, and more likely failed steel companies; but taking the President at his word, we call for him to do the 40 percent tariffs for 4 years. Anything less simply will not cut it.
It does not mean 40 percent with hundreds of exceptions, as steelworker president Mr. Leo Gerard told the gentleman from Pennsylvania (Mr. ENGLISH) and me and some others this afternoon. We must protect the 700,000 hard-working families who rely on this industry for their salary, for their pensions, for their health benefits, and all of us who rely on this industry for our national security.
The steelworkers at Weirton Steel, where then Vice Presidential candidate Cheney made, I hope, a genuine promise, and to the workers at RTI in Lorain, in Canton, in Madison, Ohio, the workers at LTV in Cleveland, and all over this country, are absolutely counting on the President to do the right thing to stop these unfair trade practices. Since this President took office, we have lost a million industrial jobs in this country. I wonder how many workers must file for unemployment before President Bush and Vice President Cheney honor their campaign pledge, not to do this half-baked, but to do the full 40 percent. More and more Americans are joining the ranks calling for Washington to assist this industry.
Again, we ask for Republican leadership here to move on H.R. 808. It clearly will pass this Congress. It has plenty of cosponsors. We ask the President to move on section 201 on implementing it and calling in these tariffs.
Now, in addition, it is important that this Congress do something about so-called legacy costs. Legacy costs are what is left for those workers who are retired; who, when these companies go out of business, lose at least 20 percent, sometimes as much as 40 or 50 percent of their pensions, and who lose all of their health care benefits. In virtually every other steel producing country in the world, especially Western Europe, we are seeing companies, as President Leo Gerard told us today, we are seeing more and more companies joining together in larger companies; and we are seeing government help with these legacy costs, with social costs, with health care benefits, with retirement. And we have to compete with those companies.
The only way for Congress to do that is for us to deal with these legacy costs for these workers who simply do not have anywhere to turn at the age of 58 or 62 or 64, or even before they are eligible for Medicare. And there are hundreds of thousands of American steelworkers whose companies have gone bankrupt, who are about to lose their medical care, who are about to lose up to half, at least a quarter, a fifth or a quarter of their pensions.
It is important the President do the right thing on or before March 6. We need the 40 percent tariff. We need that tariff in effect for 4 years until this industry gets back on its feet and American steel can have a level playing field from which to compete. It is important that Congress move on section H.R. 808 and override the Republican leadership to stop it. It is important that Congress stop passing legislation like Fast Track and NAFTA and the World Trade Organization, the way it was created, and PNTR for China, and all the trade agreements that have put us behind the 8-ball.
It is important that this Congress and this President finally do the right thing for American workers. I thank my friend from Pennsylvania for his good work and I yield back to him.
[Time: 20:00]
Mr. ENGLISH. Mr. Speaker, I congratulate the gentleman for his great advocacy for the cause of steel.
Mr. Speaker, this administration has done more than the last administration did so far; and that is very, very encouraging. Also, a bill like H.R. 808 was brought up by this House Republican leadership, passed the House overwhelmingly, and was killed in the Senate. This is not so much a partisan issue. The importance is that we need to move now the strong remedies necessary to put this critical, strategic industry back on an even keel.
We also know an effective remedy is the only way to stimulate foreign governments and steel producers to make the difficult decisions that U.S. producers have already made to modernize, eliminate inefficient capacity and rationalize, bringing stability and balance to the global steel market.
Looking at this next graphic, we know that a 40 percent tariff would provide more than $1.4 billion of operating revenue for our domestic producers. A substantial tariff-based remedy is the only way to prevent the loss of thousands of additional steel-related jobs and will send a clear message to foreign producers that the United States is not a dumping ground for excess steel product.
Going to the next graphic, even with the 40 percent tariff, people need to understand prices would still be well below the 20-year average on hot-rolled, cold-rolled, hot-dipped galvanized steel and coil plated.
Even with the 40 percent tariff, prices would still be below the 20-year average. So much for the dramatic price increase as a result of tariffs that some opponents of relief for the domestic industry have been arguing; and comparing the pricing trends of steel to other industries, going to the next graphic, according to the Bureau of Labor Statistics, the price of construction machinery and equipment has increased about 60 percent during the last 20 years. I realize that this graphic is confusing and looks like something that Washington would conceive of, but if Members look at the actual details, if Members know that the price of products such as motor vehicles have risen by about 45 percent since 1981, paper has risen 55 percent, food has risen 40 percent, steel prices during
[Page: H629]
Tariff-based remedies will not harm U.S. consumers. Increases in steel prices have minimal effect on the price of end products because steel constitutes only a small share of the total cost of most products that contain steel. Think about it. For a typical family car, the increase caused by the imposition of a 40 percent tariff would be about $60, $60 on the cost of an automobile. For a refrigerator, the increase would be a cost of about $3. That is not enough to affect consumer decisions.
On this graphic, as measured by the Department of Commerce, steel's share of total costs is 0.8 percent for construction, 3.4 percent for motor vehicles and parts, 5.4 percent for other transport equipment, 6.8 percent for household appliances, 4.6 percent for electrical industrial apparatus, and for the highest of Commerce's categories, fabricated metal products, steel's share of total cost is less than 16 percent.
That clearly indicates that by seeking this remedy, we are not going to create a problem for the domestic economy. Since 1995, the price of finished goods has risen 11 percent while the cost of steel mill products has declined 16 percent. The steel-consuming industries have been running around Washington suggesting that relief under section 201 will not return profitability to the domestic steel industry by raising prices while at the same time arguing that relief will raise consumer prices to prohibitive levels.
According to a study by Professor Jerry Hausman, an economist at the prestigious Massachusetts Institute of Technology, MIT, the tariffs would actually have a minimal effect on prices, costing the average consumer $2 a year, and having no negative effect on the U.S. economy.
We can reach out and successfully impose 40 percent tariffs, and it will have a minimum impact on consumer prices. Hausman said the assumptions from the consuming industry's trade action coalition are fundamentally flawed. Using the same model, but with accurate assumptions that truly reflect the current steel market, the studies show that the section 201 remedies would provide a net benefit of about $9 billion to the U.S. economy. The same consuming industries that are saying that they will be placed at a severe disadvantage because of these tariffs on steel have not had to endure the same stagnated prices on their products during the last 20 years. My previous graphic, those steel-intensive industries such as construction machinery, equipment and motor vehicles, have seen the price of their product increase 60 and 40 percent respectively since 1981. I will say it again: steel prices have increased less than 5 percent.
Entire American communities have been devastated by this import crisis, and I would like my colleagues to consider that regions already experiencing hardship as a result of the current recession are being dealt a devastating blow by the massive levels of low-priced imports. The loss of good-paying steel industry jobs directly impacts thousands of workers in other sectors that depend on the steel industry.
The U.S. manufacturing sector, including the steel industry, has one of the highest multiplier effects. For every $1 of a manufactured product sold to an end user, an additional $1.19 of intermediate activity is generated. The steel industry is a major consumer of computers and other high-tech equipment. It is also a major user of transportation industries such as rail, trucking, and shipping.
Steel-generated demand for key raw materials, coal, coke, iron ore and limestone provides employment in a number of regions where, frankly, other jobs are scarce.
The steel industry is also a major contributor to the U.S. tax base, including the tax base of State and local governments.
There is another dimension that I would encourage my colleagues to think about, and that is a healthy domestic steel industry is a cornerstone of our national defense. Steel is an indispensable component of many weapons and weapon systems, as well as the ships, tanks and other vehicles that carry these systems and our dedicated troops. In my district, Erie Forge and Steel is the sole producer of propeller shafts that are used in Navy ships, and they are just coming out of Chapter 11 bankruptcy with a new buyer.
The President and many other U.S. government leaders recognize that steel and national security go hand in hand. At a time when we are trying to enhance our national security and we are thinking anew about the need to have a strong defense, defending the steel industry should be a top priority. It is vital to U.S. national economic security and to our homeland security that America does not become dangerously dependent on offshore sources of supply for, among other things, the steel that goes into our transportation security infrastructure such as highways, bridges, railroads and airports; the steel, that goes into our health and public safety infrastructure, such as waste and sewage treatment facilities and the public water supply; the steel that goes into our commercial, industrial and institutional complexes such as schools, hospitals, retail stores, hotels, churches and government buildings. We must maintain a viable domestic steel industry if our country and our economy is truly to be secure.
The gentleman from Ohio brought up the issue of legacy costs, and we need to recognize that 2 decades of downsizing have created a domestic steel industry that is highly efficient with modern facilities; but the downsizing that has occurred to achieve this goal has placed an enormous burden on the industry, and that burden is these legacy costs: health and pension liabilities for steelworkers who lost their jobs as a result of the massive industry downsizing which occurred especially during the period of the 1980s through the present as a result of injurious, unfair trade.
Legacy costs have put the industry overall at a significant competitive disadvantage versus foreign competitors whose governments have assumed these same costs. Congress, the administration, and the industry must continue to work together to address these costs that serve as a critical barrier to industry consolidation. While this is a time of enormous crisis for the industry, we need to recognize it is also a time of unique opportunity. This is a chance to facilitate an important, long-term restructuring to allow for significant capacity reduction and help create an industry poised to compete over the long run with any competitor in the world.
Mr. Speaker, we have reached a pivotal point in stabilizing the American steel industry and ensuring good-paying jobs for its workers. The Bush administration took a monumental first step. I encourage the administration to follow through by enacting tough tariffs that will truly provide relief for a besieged industry and its struggling employees.
Many of our manufacturers face growing and cumulative competitive disadvantages in the international market. While the European Union may loudly voice their objections to strong tariffs as not necessary to fix America's problem, the percentage of steel dumped into their market is significantly lower than that dumped on our shores, and I would like to demonstrate that with another graphic.
As Members can see, not since 1960 have we been on a relatively even keel with the Europeans when it comes to receiving excess foreign steel. The foreign excess steel dumped in the United States has steadily grown since then, topping off at 30 percent while the EU hovers at 15 percent. The EU's argument simply does not hold water.
Mr. Speaker, the plight of the steel industry is grim, but both Congress and the administration are working hard to give employers the tools that they need to be competitive in the global market. Nothing will solve today's steel crisis in this sense: the damage is already done. Instead, we must seek to apply the lessons learned in today's crisis, put reforms into place so nothing like this will happen again.
We need to have substantial tariffs to begin this process. We must do this in order to provide some security for the 62,000 American steelworkers as well as 600,000 retirees and their dependents. Without this action, the future of our domestic steel industry as well as our economy and our national security will remain very much in question.
[Time: 20:15]
With that, I would like to yield to another of my colleagues, a great member of the Steel Caucus, the gentleman from West Virginia (Mr. MOLLOHAN).
Mr. MOLLOHAN. I thank the gentleman for his leadership in this area and for yielding.
Madam Speaker, I rise today in support of America's steel industry, steelworkers and steel communities.
Just 7 days remain for the President to issue his decision on the future of our domestic steel industry. To his credit, the President requested that the International Trade Commission conduct a section 201 investigation to determine if steel imports injured the domestic steel industry. Last year, the ITC held a lengthy hearing process in which it heard testimony about, and concluded that, serious injury had been caused to the steel industry by imports. The ITC ruled that sharp increases in 16 product categories have injured, or could seriously injure, U.S. steel companies. Various tariff levels were recommended by the ITC. Now we await the President's response and the President's action.
For 4 years now, our domestic steel industry has been engaged in a brutal fight for survival. Foreign steelmakers have flooded our markets with their products, much of it illegally subsidized. These imports have pushed 31 of our steelmakers into bankruptcy and forced our workers into the unemployment lines. We desperately need relief that restores prices to reasonable levels. This decision that we await from the President is our domestic steel industry's last chance for survival.
As my colleagues know, the overwhelming majority of commissioners at the ITC recognized that substantial tariffs of 20 to 40 percent must be imposed in order to address the steel import problem and return prices to their normal, pre-crisis levels. In this market environment, however, 20 percent tariffs simply will not be enough. I join my colleagues in asking the President to impose the highest level of tariffs, 40 percent, because it is the only way to ensure the future of our steel industry. And, further, any section 201 remedy must be enforced for at least 4 years to demonstrate the seriousness of the administration in addressing excess capacity.
Lastly, a tariff-based remedy must be applied across all flat products, including slab. If the remedy is different for different products, the imports will just shift to the product with the lowest tariff, and the remedy will be gutted.
I would like to take a moment to address one particular problem, tinplate. The district that I serve is home to Weirton Steel and Wheeling-Pittsburgh Steel. Both have a significant stake in tinplate production. In fact, probably no district in the Nation has a higher concentration of tin mill production than the First District of West Virginia. Unfortunately, it is one of the many segments that has been staggered by rising imports and falling prices.
Imports of tin mill products have increased by 200,000 tons. Prices have fallen by $65 per ton. Imported tin mill products jumped 50 percent from December, 2001, to January, 2002, a monthly record.
The ITC's vote on tin mill products was a three-to-three tie. Of the three who voted that the domestic industry was injured by imported tin mill products, two voted for tariffs of 40 percent, 38 percent, 36 percent and 31 percent; and one voted for tariffs of 20 percent, 17 percent, 14 percent and 11 percent. Because of the tie, the law states that no remedy recommendation can be made to the President.
However, even without a tin mill products recommendation, the President can still enact a remedy if he so chooses. If the President provides tariff relief on other products but not on tin mill products, other nations will likely offset their losses and flood the U.S. tin mill products market. This is called product shifting. I urge the President, in the strongest terms, to include tariff remedies for tin mill products in his remedy decision.
We are truly at a crossroads in the steel industry. The cause of our steel crisis is, simply put, massive foreign overcapacity. The ITC's section 201 investigation provided overwhelming evidence that the industry is seriously injured. Six commissioners unanimously agreed that the increase in imports was a substantial cause of serious injury. In fact, last Tuesday, the U.S. Bureau of Census released preliminary data showing that all steel imports rose from 2 million net tons in December to 2.5 million tons in January. So even in the face of possible tariffs, foreign countries continue to dump steel in our market.
More than 325,000 American jobs are at risk if serious, swift and decisive action is not taken. According to calculations based on measurements by the Bureau of Labor Statistics, the U.S. Department of Labor and independent economic analysts, every job in the basic steel industry supports at least three other jobs in
other industries.
Without significant tariff remedies, our steel industry, our steelworkers, and our steel communities will be decimated. I join my colleagues in asking the President to issue strong tariff remedies for our steel industry.
Mr. ENGLISH. I want to thank the gentleman for his involvement in our Steel Caucus. One of the things that has made being chairman of the Steel Caucus such an extraordinary pleasure is the involvement of people like him and like you, Madam Speaker, both of you from West Virginia, and also from our last, final speaker of the evening, the gentlewoman from Pennsylvania (Ms. HART), to whom I will yield.
Ms. HART. I thank the chairman of the Steel Caucus, the gentleman from Pennsylvania (Mr. ENGLISH), for his great leadership on this issue and for actually having this administration be so well educated to actually file the 201 investigation and really to have gotten us to the point where we are today.
It is an honor for me to speak here on behalf of those in my district and throughout this Nation who have made the steel industry what it was and what it should be today, very strong and a very highly mechanized, very technical and very much improved industry over the last many years.
Unfortunately, we have not been reaping the benefits that that industry has earned over the last several years. As I know has been discussed by several other Members earlier this evening, we have not reaped the benefits because of foreign nations subsidizing their steel and dumping it at below market costs here in this country.
I had the opportunity to speak with the President, as I know many of my colleagues have, about this issue. We were instrumental in making the decision to file that 201 investigation. I am pleased that once the ITC had the opportunity to review the issue that they did agree with us that foreign steel dumping, in a 6-0 decision, in fact, that those products being imported into the United States are being imported below cost and also in increased quantities, that they are the substantial cause of the injury to the United States steel industry, not the lack of mechanization and modernization of our industry.
I want to say, I represent a part of western Pennsylvania that has been known for being very strong in the steel industry. Unfortunately, we have lost many, many jobs over the last several years. Not only did we have a very difficult time in the 1970s and 1980s, but once again, since 1986, for example, we have lost over 20,000 steelworker jobs and five major plants in Beaver County alone, Babcock & Wilcox, Crucible, LTV, Armco and American Bridge.
The problems, though, did not get better once the industry did modernize and consolidate. It has gotten worse. Allegheny County, where I live, Butler County, Fayette County, Washington County in western Pennsylvania and Westmoreland County where I represent have all lost jobs, not again because of their lack of technology but because of steel dumping. It is the unfair trade that has caused these problems.
I would urge everyone involved who has the opportunity to have some input now with the administration to encourage them to stand along with my colleagues in the Steel Caucus and our chairman, the gentleman from Pennsylvania (Mr. ENGLISH), and push for a very effective remedy. It appears that that will happen next week. We have the opportunity to actually help our steel industry survive. We need to have a serious and effective remedy. What we are asking for, what the industry
[Page: H631]
Unfortunately, for too long, the administrations that ran this country did not pay attention to the steel industry. It was completely ignored, in fact, under the previous administration. I must credit President Bush, I must credit his trade ambassador and some of the folks who work with him who have listened to us, who have discussed with us the issue and I believe understand that it is important for us to take this step now so that we will continue to have a steel industry in this country at all. Because otherwise I think we are in jeopardy of losing it completely.
Between 1997 and 2000, steel imports from China increased by 212 percent. From the former Soviet Union area, they increased by 167 percent. That is mostly from the Ukraine. From Taiwan, by 558 percent. I do not think anybody could say with a straight face that the quality of the steel or the process that they used was that much better than ours, and in fact it probably was not better at all.
So I stand here along with my colleagues and I ask that we together, and I ask the administration, to work with us together to make sure that our steel industry and those who have worked in it and built it and built a large part of this Nation be rewarded for their hard work, be given the opportunity to continue to be a strong industry, that they can rebuild themselves, that they only ask that they be given a level playing field with other countries that are steel producers, and that we make sure that given this opportunity now, that the ITC has given us a decision showing that they have been injured by dumping, that they get the opportunity again to get back on their feet.
Because not only is it important to my region, the regions that many of my colleagues represent, it is important to our entire Nation that we have a strong steel industry, not only for the automobile industry, not only for the appliance industry, but for the defense industry, for the defense of this Nation, and for our future.
I thank the gentleman from Pennsylvania for his leadership.
Mr. ENGLISH. I thank the gentlewoman. I congratulate her particularly on serving within the Steel Caucus, already as a member of the executive committee and one of the effective leadership, helping us shape the strategy to bring this issue to the point where it has arrived today, where there is an opportunity for the President, through his action, to put this steel industry on a much more level playing field.
It is worth noting, since he initiated the 201, already it has had a substantial effect on imports and already it is having some effect on steel prices, forcing foreign competitors to rethink their strategies and rethink their dumping.
I also want to congratulate the steelworkers unions, the United Steelworkers Union, the Independent Steelworkers Union, and the industry which is so diverse yet has come together behind the notion that this 201, coupled with a 40 percent tariff through the President's initiative, is ultimately going to lead to a strong, competitive, world-class American steel industry for the future.
Mr. STUPAK. Madam Speaker, the health of the domestic steel industry is vital to our nation, and it is the lifeblood of my district of northern Michigan. Without meaningful comprehensive relief, 40% tariffs over 4 years for all segments of the steel industry, including slab steel we will not recover from the current crisis.
Only the strongest of remedies can offer any hope for our nation's steel and iron ore industries to survive. Over 30 steel companies are in bankruptcy, including the LTV Corporation, a part owner and customer of the Empire Mine in northern Michigan. Michigan's iron ore mines have felt the impact of these bankruptcies as the steel companies that have been their customers go out of business one by one. Most recently as a result of LTV's bankruptcy, the Empire Mine has been shut down, and over 800 employees are currently out of work.
With the Empire Mine shut down, Michigan has only one remaining iron ore mine, the Tilden Mine which is located in Marquette County. The Empire and the Tilden Mines have been a vital part of the economies of the Upper Peninsula and the state of Michigan. In addition to the 2,000 employees of these mines, our citizens have been employed in the transportation of ore from the mines, to the ports, to the steel mills along the Great Lakes, as well as in the power plants that supply these mines, and many other related industries.
I was very pleased by the unanimous finding of injury by the U.S. International Trade Commission. However, I was troubled by the relief recommended by a majority of the board in the form of a tariff-rate quota on slabs, beginning in the first year with a 20% tariff on slab imports over 7 million tons. This will be insufficient relief to the iron ore industry and to the steel companies whose blast furnance operations must compete with the cheap slab steel that is flooding our country.
Rather, the relief for semi-finished steel slab must be equivalent to that recommended for the other covered industry products: there must be a tariff on each and every ton that enters this country. We need tariffs of at least 40% on steel slabs. Without such a tariff, millions of tons of slab steel will continue to enter the U.S. market at artificially low prices, and will continue to harm our domestic industry.
Now is the time to act to save the steel industry. Our national security, our manufacturing base, our workers, our communities depend upon a strong domestic steel industry. Now is the time to stand up for steel!
Ms. DELAURO. Madam Speaker, I want to thank Representatives VISCLOSKY and ENGLISH for organizing tonight's special order on the crisis facing the hardworking men and women in the U.S. steel industry, and for their dedication and leadership on this crucial issue.
Since the late 1990's, the steady increase in imported steel into our country has put the U.S. steel industry and the future of U.S. steelworkers and their families in serious jeopardy. To date, 28,000 steelworkers across the country have lost their jobs.
These losses have ripple effects throughout their communities. When steel mills close, businesses around them close, people leave their towns and neighborhoods. Bonds and traditions built over years are broken.
We must take action immediately. Now, more than ever, we must unite in defense of meaningful protection. It is time to stand firm against illegal dumping by foreign competitors.
In December, the International Trade Commission called on the President to impose tariffs on foreign steel--to protect American families. Since then, three steel companies have collapsed, leaving hundreds of steelworkers without jobs--men and women who have dedicated years to making the highest quality steel available.
By March 6th--just a week away--the deadline arrives for the President to act. He will have to decide whether to protect steelworkers and their families or to protect foreign interests. I strongly urge him to do the right thing and stand with our nation's steelworkers.
I am proud to stand shoulder-to-shoulder with the men and women who are coming to the Capitol tomorrow to rally for meaningful relief, for their jobs, for the highest quality steel in the world, for a safe future for their families.
Mr. DINGELL. Madam Speaker, the crisis facing the American steel industry not only jeopardizes thousands of jobs in Michigan and the industrial Midwest, but also threatens the long-term stability and strength of the American economy. We must commit ourselves as Americans to making sure our trade laws have teeth and our country never becomes dependent on foreign steel.
The events of the last few months should also remind us that the steel crisis also jeopardizes our national defense capabilities. If we no longer have the mills and workers to produce steel, the strength of our armed forces--which today are the world's most powerful--will be dependent upon our ability to import foreign steel. This is an unnecessary gamble and a grave concern. During World War II it was our ability to out-produce our foes in the factory that led to our victory on the battlefield.
Twenty steel makers have filed chapter 11 bankruptcy protection since 1998. Steel prices are at their lowest point in 20 years. Some 20,000 steelworkers have lost their jobs since 1998. Since 1980, the number of American steelworkers has fallen from 460,000 to 140,000. Statistics have not measured the job and economic losses that have been absorbed by those whose work is tied to the steel industry.
Great Lakes Steel once operated with nearly 12,000 employees; today they employ less than a third that number. During the second quarter of 2001 alone, their parent company lost over $110 million. Rouge Steel is also struggling to survive; Rouge finished 1999 and 2000 with net losses.
These plants, like many across the nation, have been periodically hit by hard times and have survived. The industry has always gritted its teeth and survived by relying on what
[Page: H632]
For the last few decades, we have world economies becoming more interdependent. Some job losses in the industry could not be avoided, but American steel regrouped and made itself competitive on the world marketplace. All the industry and workers asked in return was for a level playing field with foreign competitors, and that trade laws be enforced.
We all know this has not happened, particularly over the last five years. Subsidized foreign steel from Russia, China, Japan, and Brazil has been dumped into the United States at prices so low that there is no way the unsubsidized American steel industry can compete. Last year, steel import levels were 83 percent higher than the annual import average for the last eight years.
Hopefully the playing field will soon be leveled, as it must be. On October 22, the International Trade Commission voted that imports have been a substantial cause of serious injury to the U.S. steel industry in affirmative decisions covering nearly 80 percent of total import tonnage. The decision was a significant step that set the stage to provide a temporary period of strong, effective steel import relief. Such relief would provide a period of time to allow U.S. steel producers to recover and to address long-term structural problems in the U.S. and global steel sector.
It is now up to the President to determine what measures will be taken. The Congressional Steel Caucus, of which I am a proud member, has pressed the President to implement real, meaningful sanctions. On December 7, the ITC voted remedy recommendations; 5 of 6 Commissioners voted for four years of tariffs ranging from 20% to 40% on major categories of finished carbon and alloy steel imports. The President will make his decision March 6. Words alone will not suffice. I have already weighed in with the White House on this matter, and have sent the President--along with my colleagues in the steel caucus--three letters in the past week alone.
High tariffs for four years--at or near the 40 percent advocated by the industry and proposed by two Republican ITC Commissioners--are essential if the industry is to recover. Experts have projected that the industry needs to invest $7-9 billion over the next four years to stay competitive and adjust to import competition. This can only happen with the near-term price relief and market stabilization that would come from significant tariffs. Substantial tariffs will do the following: have immediate but modest price effects; allow domestic producers to significantly increase sales quantities; provide certainty in the market; will distort trade less than quantitative measures; and, allow the industry to generate the revenue needed for investments.
Inadequate tariffs, such as the 20 percent recommended by the ITC plurality, will likely be absorbed and will have little or no effect in the market. So-called ``tariff rate quotas,'' which apply an additional duty only after a certain volume of imports comes in at low or zero duty rates, will provide no benefits and might well be worse than nothing at all. Relief on slab is also critical. Without an effective remedy on slab, the pressure for domestic producers to shut down their hot-ends and stop making steel will be unstoppable.
Regardless of the President's decision, Congress' job is not finished. We must examine other ways to assist the steel industry, including addressing the problem associated with legacy costs. If nothing is done, and the federal government does not intervene, 600,000 retirees will lose their hard-earned health care benefits.
I implore my colleagues to join me in urging the President to enforce our trade laws, follow the recommendations of the ITC, and stand up for American industry and American workers. Now is the time to level the playing field and end illegal foreign steel dumping, and save the American steel industry.
END