Letter to Wilbur Ross, Secretary of Commerce and Robert Lighthizer, U.S. Trade Representative - Take Immediate Action Eliminating Foreign Steel And Aluminum Threats

Letter

Dear Secretary Ross and Ambassador Lighthizer:

I write on behalf of my constituents who are employed by the aluminum and steel industries in New York. U.S. aluminum and steel workers in New York and across the country have long-suffered from foreign predatory trade practices. I ask that you carefully consider submissions from Nucor, Alcoa, Novelis and the United Steelworkers in the Department of Commerce's ongoing Section 232 investigations involving aluminum and steel imports and their impact on national security. In these investigations and the administration's efforts to support the U.S. steel and aluminum industries and their workers, I urge you to focus on the fundamental threat to these industries -- overcapacity in China and elsewhere -- and quickly address this ongoing problem.

New York is home to two large aluminum manufacturers: Alcoa, which employs 600 workers in Massena and Novelis, which employs around 1,180 workers in Oswego. The ability of these companies to compete has been impaired by China's market distorting practices, including its large government subsidies which have resulted in enormous overcapacity. The International Trade Commission's recent Sec. 332 report on the U.S. aluminum industry confirms that China's market distorting subsides have negatively impacted the industry, lowering U.S. primary and secondary aluminum production. Currently, only five primary aluminum smelters remain operational in the U.S. -- down from 23 in 2000 -- and only two are fully operational, including Alcoa's Massena operation.

New York is also home to major steel manufacturers, including Nucor, which employs over 580 workers in Auburn, Chemung and Albany. Similarly, Nucor has suffered as massive global steel overcapacity and market distorting practices in China and other countries have caused steel imports to remain at high levels, with near record market share despite numerous recent steel antidumping and countervailing duty orders.

I was encouraged by the announcement of the 232 investigations earlier this year; however, I have since become concerned with the administration's inaction in resolving these investigations. Since June, the President and administration officials have publically mentioned the potential imminent announcement of actions to curb imports through the 232 investigations, but to date no announcement has been made. These reports have caused a surge in steel and aluminum imports as foreign producers were encouraged to export to the U.S. before anticipated import restrictions could be put in place and have had ample time to do so. I was also dismayed to learn that the administration was not able to secure any major commitments on overcapacity at the Group of 20 (G-20) summit in July or in the "100-day action plan" trade negotiations with China.

The Department of Commerce should act quickly to support American workers at Nucor, Alcoa, Novelis and throughout the steel and aluminum value chains. Robust steel and aluminum industries are vital to our defense industry and critical infrastructure. My constituents have informed me that meaningful broad-based action to curb aluminum and steel imports, targeting imports that originate from countries like China that heavily subsidize their exports while maintaining needed supply chains, is essential to providing needed relief to these industries. Additionally, to safeguard the U.S. aluminum and steel industries' long-term competitiveness, the administration must directly secure enforceable commitments from China and other countries to substantially reduce steel and aluminum overcapacity. However, without indicating the willingness to use meaningful broad-based trade action, there is little hope that negotiations to reduce capacity will bear fruit.

In addition to prompt and decisive action pursuant to the 232 investigations, I would urge the administration to consider the following actions:

The administration should first and foremost, prioritize securing concessions from China and other countries to eliminate steel and aluminum subsidy programs and other market distorting policies through the Comprehensive Economic Dialogue and other bilateral forums.
To apply additional pressure, the administration should accelerate efforts regarding overcapacity at G-20 and the Organization for Economic Co-operation and Development forums. Specifically, the administration should seek to create a global forum on aluminum excess capacity through the G-20.
The United States Trade Representative should work to aggressively defend U.S. antidumping and countervailing duty laws from challenges at the World Trade Organization (WTO).
The United States Trade Representative should pursue the complaint against China's primary aluminum subsidies at the WTO, launched by the Obama Administration in January of this year, as a long-term solution.
Senate Democrats have outlined proposals in our Better Deal trade agenda to provide the administration with greater tools and resources to enhance U.S. trade enforcement efforts. One such proposal would establish a Trade Prosecutor's office to more efficiently address foreign governments' anticompetitive practices. I hope you will consider working with us on these proposals to enhance U.S. trade enforcement efforts.

U.S. aluminum and steel workers who support their communities and our national security infrastructure deserve to compete on a level playing field. Again, I urge you to carefully consider submissions from my constituents and swiftly act to contest China's and other countries' anticompetitive practices that unfairly undermine their ability to produce.

Thank you for your attention to this matter.

Charles E. Schumer

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