October 06, 2014

Schumer, Gillibrand Step Up Push To Protect Klein Steel, A Company In Rochester, Buffalo & Albany, Against Dumping Of Cheap Foreign Steel – Urge International Trade Commission To Level Playing Field For Ny Manufacturers Once And For All

In March, Senators Urged Dept. of Commerce to Protect NY Companies, like Klein Steel—Which Has Plants in Buffalo, Rochester & Albany - Against Dumping of Artificially Cheap Foreign Steel Rebar - Commerce Issued Final Ruling in September That Found Mexico’s Producers to be Dumping Goods, But Said Turkey’s Producers Were Not Dumping

U.S. Senators Charles E. Schumer and Kirsten Gillibrand have called on the International Trade Commission (ITC) to carefully consider evidence that Mexico’s and Turkey's steel producers have injured the U.S steel reinforcing bar – or “rebar” – industry by dumping unfairly priced rebar into the U.S. market, threatening companies like Klein Steel, which has a large presence in Upstate New York. Klein Steel is headquartered in Rochester and has locations in Buffalo and Albany. The ITC is currently considering whether there is evidence that the domestic industry has been materially injured by unfairly priced steel rebar from Mexico and Turkey. The Senators noted that the domestic rebar industry is operating at only 60 percent capacity utilization, a historic low, and has been forced to close facilities and lay off workers due to foreign dumping.

Klein Steel, and rebar producers and sellers across the country brought up their case in September of last year. Senators Schumer and Gillibrand wrote a letter to the Department of Commerce in March regarding this case, urging a level playing field for Klein and its over 200 workers. The Department of Commerce determined that Mexico’s rebar producers are dumping rebar into the U.S., but that companies from Turkey implicated in the case are not dumping. Commerce also found that at least one of Turkey’s major producers is receiving unfair government subsidies. The ITC will make the final decision on October 23 to determine if duties should be ordered on steel rebar entering the U.S. from Mexico and Turkey, which would effectively level the playing field for U.S. producers.  If the ITC makes an affirmative final determinations that imports of rebar from Mexico and/or Turkey materially injure, or threaten material injury to, the domestic industry, Commerce will issue duty orders.

“The International Trade Commission must level the playing field for Upstate New York manufacturers and distributors like Klein Steel, who are forced to compete with artificially-cheap foreign imports,” said Senator Schumer. “American steel rebar manufacturers and workers play by the rules, and it is essential that we ensure foreign competitors are doing the same, and that is why I have urged the International Trade Commission to consider the substantial evidence of damage that is being caused by foreign dumping of steel rebar. Klein Steel employs 200 people between its three locations in Rochester, Buffalo and Albany, and should be able to count on the federal government to protect it from unfair trade practices such as dumping, and I will continue to fight on their behalf.”

“To stimulate economic growth, we must make sure our manufacturers are on a level playing field with their foreign counterparts,” said Senator Gillibrand. “I want to see more Made in America, starting right here in New York with Klein Steel and other local steel manufacturers. But that can only happen if we protect New York steelworker’s jobs from predatory international practices - by making it harder for other countries to corner the market through unfair and illegal trade. I urge ITC to help end the dumping of cheaper products into the U.S. market, so we can save the jobs of thousands of steelworkers across New York.”

“We strongly believe that it is in the best interest of our country and our company to ensure the security of our domestic steel producers by keeping the ‘playing field’ level,” said Todd Zyra, Klein Steel President. “When other countries affect the price of steel, either by flooding the market or purposely artificially lowering the price, it hurts U.S. suppliers who play by all the rules of good business including environmental, safety, insurance, workers comp, transportation, production and so much more.  When our domestic producers are weakened financially by foreign competition that does not play by the same rules, it hurts the people who work at companies like Klein Steel, and all of our customers.”

Schumer and Gillibrand, along with 34 other senators, wrote a letter to ITC Chairman Meredith Broadbent urging her to ensure that foreign subsidization and dumping are prevented from causing additional injury to an already weakened industry.  In the letter, the Senators noted that unfairly priced imports have flooded the U.S. market since 2010 at the direct expense of U.S. producers, who have seen their share of the market drop dramatically. Schumer and Gillibrand noted that conditions have deteriorated to such an extent that some U.S. producers have been forced to close production, while others have had to lay off workers, slash hours, and cut pay to stay afloat.

Senators Schumer and Gillibrand were joined by the following Senators: John Boozman (R-AR), Lindsey Graham (R-SC), Roy Blunt (R-MO), Richard Burr (R-NC), Roger Wicker (R-MS), Jim Inhofe (R-OK), Mitch McConnell (R-KY), Thad Cochran (R-MS), Johnny Isakson (R-GA), Jeff Sessions (R-AL), David Vitter (R-LA), Tim Scott (R-SC), John Cornyn (R-TX), Richard Shelby (R-AL), Saxby Chambliss (R-GA), Deb Fischer (R-NE), Mark Pryor (D-AR), Sherrod Brown (D-OH), Chuck Schumer (D-NY ), Kirsten Gillibrand (D-NY), Debbie Stabenow (D-MI), Tom Harkin (D-IA), Amy Klobuchar (D-MN), Joe Manchin (D-WV), Kay Hagan (D-NC), Jeff Merkley (D-OR), Cory Booker (D-NJ), Al Franken (D-MN), Dick Durbin (IL), Claire McCaskill (D-MO), Tim Kaine (D-VA), Joe Donnelly (D-IN), Mark Begich (D-AK), Mark Warner (D-VA), Michael Bennet (D-CO), Patty Murray (D-WA).

Dumping is when a foreign company exports their goods into the United States below fair market value. The U.S. Department of Commerce investigates cases of potential dumping by calculating dumping margins, usually calculated as the difference between the US market price of a product and the price in the exporter’s home country, to determine is dumping as occurred. The dumping margins become a duty order if the ITC finds evidence of materially injury, or threat of injury, to the domestic industry from such dumping. The duty order is a type of tax on the import found to be undervalued, which brings the price of that import to fair value.

Rebar is one of the largest volume steel products produced in the U.S., employing more than 10,000 workers in over 30 states. Klein Steel sells rebar in all three of its Upstate New York locations—Rochester, Buffalo and Albany. Nucor Corporation, located in Auburn, New York, sells raw materials to Klein Steel and has also been negatively impacted by unfairly priced rebar imports. Nucor, is the largest domestic steel manufacturer in the United States. In 2001, Nucor invested $115 million to acquire what was then a failing steel-making facility in Auburn. In the decade since that acquisition, Nucor has invested an additional $40 million to modernize or upgrade the core components of the steel melting, casting and rolling operations. Nucor’s Auburn facility produces a range of carbon steel products, including rebar, and employs over 300 people. 

With nearly 7 million tons of domestic production, a healthy rebar industry is critical to a strong economy.  However imports from Turkey and Mexico are surging into the U.S., nearly doubled from 2011 to 2013. In light of these alarming concerns, Schumer and Gillibrand are urging the ITC to give careful consideration to the U.S. steel industry’s arguments regarding investigations involving Turkey and Mexico. Schumer and Gillibrand said that it is essential that foreign subsidies and dumping be addressed in order to prevent further harm to the U.S. rebar industry and the unwarranted loss of American jobs.

A copy of the Senators’ letter to International Trade Commission Chairman Meredith Broadbent is below:

Dear Chairman Broadbent:

We are writing to express support for the U.S. steel reinforcing bar (“rebar”) producers and their workers, and to encourage the International Trade Commission to ensure that foreign subsidies and dumping are prevented from causing additional injury to an already weakened industry.

As the Commission is aware, rebar is used primarily by the construction industry to strengthen concrete structures and is an essential component of American infrastructure. The domestic industry should be benefitting from the modest recovery in construction demand in the wake of the recession. Instead, the industry has faced a continuous onslaught of unfairly traded imports, which has had a negative impact on rebar producers and their families.

Since 2010, these imports have flooded the U.S. market at the direct expense of U.S. producers, who have seen their share of the market drop dramatically.  Capacity utilization rates are at historically low levels – near 60 percent – and production levels have yet to recover from the recession.  Profitability has collapsed and returns on investment have been inadequate.  Indeed, conditions have deteriorated to such an extent that some U.S. producers have been forced to close production, while others have had to lay off workers, slash hours, and cut pay to stay afloat.

The U.S. rebar industry is a major segment of the U.S. steel industry with over seven million tons of production a year.  The industry employs thousands of direct rebar workers in several dozen states, and supports tens of thousands of additional jobs throughout the country. These jobs are in jeopardy.

On behalf of the U.S. rebar industry and the workers and their families who depend on the full and fair enforcement of our trade laws for their survival, we urge you to give careful consideration to their arguments regarding investigations involving Turkey and Mexico.  It is essential that foreign subsidies and dumping be addressed in order to prevent further harm to the U.S. rebar industry and the unwarranted loss of American jobs.

Thank you in advance for your time and consideration of this critical issue.

Sincerely,

Charles E. Schumer and Kirsten Gillibrand

United States Senators