US steel companies need a level playing field

America’s steel industry has helped our country build the world’s largest economy, the world’s strongest military and the world’s largest middle class.

Unfortunately, other countries have tilted the playing field in their favor by massively subsidizing their steel industries and allowing unfair trade practices. 

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Most recently, Turkey and Mexico have been wreaking havoc on a crucial sector of the American economy – the production of rebar, reinforcing steel that is used to strengthen concrete and hold it in place in roads, bridges, highways and stadiums.

The U.S. government needs to act now to provide the trade relief that is absolutely essential to this industry and its workers.

By selling rebar unfairly in America at prices far below those in their own countries, Mexico and Turkey have captured nearly 20 percent of the U.S. market – almost triple the market share they had in 2010. Some Mexican producers are “dumping” rebar into the United States at prices 66 percent lower than in Mexico. In addition, Turkey is further tilting the playing field by subsidizing its rebar industry with energy subsidies, preferential loans, export credits and tax credits.

The stakes are high. The survival of the U.S. rebar sector, with more than 10,000 high-paying, family-supporting jobs at more than 100 facilities in 33 states, hangs in the balance. Furthermore, rebar accounts for almost 7 million tons of US steel production and supports tens of thousands of additional American jobs throughout the steelmaking supply chain.

The situation has forced my company into reducing our workforce by 25 percent and curtailing production as we hear time and again from customers who are receiving unheard-of deals on imported rebar.

U.S. steelmakers are low-cost, efficient producers who adhere to the strictest environmental standards in the world and enjoy clear advantages in practically every aspect of steelmaking. However, the disregard that foreign competitors have for the global rules of free trade wipes out these advantages.

As a result of these unfair trade practices, the American rebar sector has not benefited from the modest recovery in the construction market. Instead, the U.S. rebar industry is operating at only 60 percent capacity, and American producers have been forced to close facilities, lay off workers and cut worker hours.

The Rebar Trade Action Coalition, consisting of five major US steel manufacturers with more than 30,000 workers in all 50 states, has petitioned the US government to investigate these unfair trade practices and take action.

In its initial decision on April 22, the U.S. Commerce Department troublingly overlooked the substantial subsidies that Turkish rebar producers receive from their government. Turkish producers purchase scrap metal from the United States, ship it to Turkey and use it to make rebar. They then ship the rebar back to the United States and sell it in our market at prices that have no relationship to their cost of production and undercut U.S. producers. This would not be possible unless Turkish rebar is dumped and subsidized. It defies clear logic. 

The Commerce Department must evaluate this issue more carefully. When it does, the evidence will be overwhelming clear that Turkey’s government is propping up its steel industry.

Meanwhile, the main Mexican rebar exporter is proposing a “suspension agreement” to bring the case to a conclusion. Unfortunately, it’s hard to trust a company that repeatedly has been found to have dumped a variety of steel products on the U.S. market, including wire rod, pre-stressed concrete (PC) strand, and now rebar.

Moreover, while the US market is wide-open, the Mexican market is essentially closed to American rebar. Although Mexico exported more than 300,000 tons of rebar into the United States last year, U.S. rebar exports to Mexico were only about 13,000 tons.

Turkey and Mexico are America’s allies. But friends should be honest with each other about important issues, such as the unfair trade practices that are injuring American businesses and destroying American jobs.

Pursued reasonably and without rancor, this trade dispute should not affect America’s partnerships with these allies. This is not a partisan issue; it is an American issue, supported by 31 U.S. senators and 56 representatives from both parties.

Given a fair chance, American steel companies and steelworkers can compete against any steel companies, anywhere in the world. It’s time to provide American rebar with a level playing field. 

Byer is president and chief executive officer of Cincinnati-based Byer Steel.