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The China Threat

China is cheating in its trade relationship with the U.S., jeopardizing our security; we must act to safeguard our jobs & innovations.

It's Time to Act

Companies like U. S. Steel and its workers have taken the lead in calling for new trade laws and strict enforcement of current ones.

United States Steel Corporation has invested millions in research to develop and innovate new steel products to meet today's consumer needs right here in America. However, U. S. Steel believes China is engaged in several unfair trade practices — from dumping and illegal subsidies, to fixing prices and circumventing trade duties.

7 jobs

1 American steel job supports how many additional jobs in the U.S. economy?

On April 26, 2016, U. S. Steel filed a complaint with the U.S. International Trade Commission (ITC) to initiate an investigation under Section 337 of the Tariff Act of 1930.

The China Threat

Fact Sheet: United States Steel Corporation's Section 337 Complaint

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The complaint was filed against the largest Chinese steel producers and their distributors. The complaint alleges two illegal unfair methods of competition and seeks the exclusion of all unfairly traded Chinese steel products from the U.S. market.

The complaint alleges two causes of action:

  • The illegal conspiracy to fix prices
  • The circumvention of trade duties by false labeling — shipping Chinese-made steel goods through third countries.

An allegation involving the theft of trade secrets by Chinese steel producers may be reintroduced in the case in the future.

The time has come for a national dialogue about how we can ensure a strong manufacturing sector, including a healthy domestic steel industry.

At a Glance:

  1. On April 26, 2016, U. S. Steel filed a complaint with the U.S. International Trade Commission (ITC) to initiate an investigation under Section 337 of the Tariff Act of 1930. The case is continuing through the discovery phase, with hearings expected to be scheduled in fall 2017.
  2. The 337 action is a powerful tool for American companies because the ITC remedy is the exclusion of the unfairly traded products from the U.S. market, not just the imposition of duties.
  3. Congress and the administration need to recognize that the American steel industry is a national and economic security interest and take all steps necessary to ensure that the industry remains viable.

" The U.S. has the most talented workforce in the world, but we cannot compete against China when they refuse to trade on a level playing field with American producers. "
- Congressional Steel Caucus, Sept. 1, 2016

The Crisis of Global Overcapacity

American steel producers are being negatively impacted by a crisis of global overcapacity, as excess steel floods into the U.S. market.

For more than a decade, China has been illegally dumping their excess steel on U.S. shores. They have also flooded other global markets, creating a domino effect on trade flows. This excess steel is often sold at unfair prices. This and other unfair trade practices are damaging the steel manufacturing base in the United States, which also impacts the U.S. economy as a whole.

16k jobs

U.S. steel industry jobs lost due to illegal dumping of steel

The impact of these destructive practices has tangible effects. The U.S. steel industry has suffered 16,000 layoffs since January 2015, according to the U.S. Bureau of Labor Statistics — with more job losses throughout the supply chain and in steel-producing communities.

The China Threat

Fact Sheet: Steel and the U.S. Economy

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The time to act is now. We cannot accept anything short of a clear capacity-reduction plan, with an ability to strictly verify reductions. 

At a Glance:

1. China and other trading partners are conducting economic warfare against our domestic steel industry by subsidizing their steel producers, distorting global markets, and dumping their excess steel in the United States.

2. The United States and other countries with similar concerns need a strong agreement with China to reduce their steel overcapacity with deadlines for achieving the agreed-upon reductions. In addition, we need to continue aggressively fighting for fair trade through the legislative process, ensuring existing U.S. trade laws are fairly interpreted and strictly enforced.

3. If America’s steel industry is to remain a backbone of America's manufacturing economy, we must demand action to reduce global overcapacity by removing subsidized production from the world supply, or "net capacity reductions," enabling basic market forces to determine outcomes.

 

" Chinese actors are the world's most active and persistent perpetrators of economic espionage. "
- U.S. Office of National Counterintelligence, Sept. 1, 2016 USTR report

Leveling the Playing Field

American manufacturers can compete and innovate with anyone — as long as the playing field is level. And today, it's not level.

Steel manufacturing in America creates good-paying jobs, products necessary for our everyday lives, materials for our national defense and infrastructure, and high-value exports. But all this is jeopardized when China and other countries use illegal and market-distorting practices to take away market share, suppress prices, and harm American steel producers. 

95 percent

percentage of the production for top 20 Chinese steel groups subject to govt ownership

America welcomes competition and trade, including imports, but it must be fair and comply with basic international rules that we've all agreed to. When foreign steel producers fail to do so, domestic steel producers are fully within their rights, under our trade laws, to seek relief. 

To level the playing field, we need to aggressively and proactively enforce our policies, practices and laws. 

At a Glance:

1. There must be consistent, meaningful enforcement and interpretation of both the letter and spirit of the law, and adherence to U.S. trade laws. We already have useful trade remedy laws on the books. The problem, however, is that they are too often either ignored or not fully utilized.

2. The U.S. government imposes many laws and regulations on American steel producers.  It’s only right we impose rules-based obligations on foreign-made steel.

3. Some of our trading partners manipulate their currencies to make their exports cheaper.  The U.S. government needs to act to prevent this. 

 
" [The U.S. steel industry] needs the support of Congress and the administration, including the next president of the United States, to survive and thrive for our country's future. "
- Thomas Gibson, president and CEO, American Iron and Steel Institute (AISI), March 23, 2016

China's Trade Cheating

Another way China has broken the law is by stealing intellectual property, proprietary information, and/or trade secrets, and then producing and selling goods based on the stolen information.

Many U.S. analysts and policymakers contend that the Chinese government is a major source of cyber economic espionage against U.S. firms. A report by the U.S. Office of the Director of National Intelligence (DNI) in 2011 stated: “Chinese actors are the world’s most active and persistent perpetrators of economic espionage.” The report goes on to warn that China will continue to be driven by its longstanding policy of “catching up fast and surpassing” Western powers.

Congress, U.S. companies and other stakeholders have recommended new measures to identify foreign governments that engage in cyberespionage and impose sanctions against entities that benefit from that theft. 

90 percent

percentage of U.S. steel plants running under capacity

If China can target any one company, or industry sector, and steal its trade secrets, then other companies and industrial sectors, and the millions of jobs they support, are also at risk.

There is an urgent need for the United States Government to enhance commercial cybersecurity at home, work to develop bilateral and global rules that govern the cyber theft of commercial trade secrets, strengthen U.S. trade policy tools, and promote greater cooperation with trading partners that share U.S. concerns. 

The world looks to the United States as a global technology leader and innovator. Our companies and workers compete in an increasingly global economy. Preventing theft of intellectual property is crucial to maintaining our economic strength, and it is vital we do not cede our technological or intellectual advantages to China or any other country. 

At a Glance:

1. One official has described China's state-sponsored cyber thefts as a "national security emergency," calling the hacking of corporations "the great brain robbery."

2. If China can steal from one company, then other U.S. companies, along with millions of American jobs they support, are at risk.

3. The resulting economic and national security implications are severe. A 2013 report published by The Commission on the Theft of American Intellectual Property estimated China's theft of intellectual property may cost U.S. firms more than $300 billion per year — an amount equal to annual U.S. exports to all of Asia.

 

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We must act to ensure we do not cede any technological or intellectual advantages to China or any other country.

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