Steel interests back new group targeting China

Three million U.S. manufacturing jobs have been lost in the last six years, but the word “manufacturing” was not mentioned once during last week’s debate among the Democratic candidates hoping to succeed President Bush.

That needs to change, according to the Alliance for American Manufacturing (AAM). The new group, backed by U.S. steelworkers, plans to highlight the plight of U.S. manufacturers aggressively, particularly by emphasizing the threat they face from China.

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“The disappearance of U.S. manufacturing jobs is alarming,” said Terry Straub, U.S. Steel’s vice president of public affairs and government relations. He said U.S. Steel is involved with the new alliance to advance policies that will protect manufacturing jobs.

While dominated by U.S. steel producers, AAM also includes the Goodyear Tire and Rubber Company and Alcoa, which are not members of the steel industry’s lobbying arm, Stand Up For Steel. United Steelworkers are the common thread, as they represent employees at all of these firms.

“This will be much broader than the steel industry,” said AAM Deputy Director Horace Cooper, a longtime aide to former GOP House Majority Leader Richard Armey (R-Texas).

One steel industry critic noted that steel’s political clout has improved with the Democrats taking control of Congress.

The political action committee (PAC) of the United Steelworkers has given $102,500 to Democrats so far this year but not a penny to Republicans, according to the PoliticalMoneyLine website. Meanwhile, U.S. Steel’s PAC has given $19,000 to Democrats this year, compared to $3,500 to Republicans.

 “There’s a battle going on for the high ground on manufacturing, and I think they are making an effort to gain that high ground if they can,” one steel industry critic said.

But some steel-industry critics have their doubts about the group’s motives. They say the new group is likely to be another front for the steel industry, which has focused its lobbying in the past on convincing the administration and Congress to support the imposition of high tariffs on foreign steel imports. It scored an important victory in 2002 when the Bush administration ordered tariffs on imported steel after pressure from the industry.

“If the alliance turns out to be a front for placing further restrictions on essential inputs for consuming industries in the U.S. … it will create more harm than good,” Steven Alexander, executive director of the Consuming Industries Trade Action Coalition (CITAC), said in an e-mail.

AAM officials insist the new group will not be a lobbying arm of the steel industry. Instead, they say, it will be non-partisan and work on issues beyond trade. They also emphasize that AAM will not take positions supporting specific bills but serve as a de facto think tank providing research and studies highlighting how policymakers can help U.S. manufacturers.

“We’re going to show you what are the consequences of the administration and Congress not doing anything,” said Cooper, who added the group would not take positions on bills targeting China.

Other sources said AAM’s decision to hold off on commenting on specific bills could reflect the fact that some AAM members, such as Alcoa, would not support legislation allowing the U.S. to impose higher duties on imported goods from China or other countries that allegedly manipulate their currency for a trade advantage.

While the trade deficit with China is highlighted on AAM’s website, energy and healthcare are also prominent. On energy, however, the group warns that China is increasing U.S. energy costs through its furious appetite for resources.

Another AAM argument is that the loss of U.S. manufacturing could endanger national security by making the U.S. military more reliant on foreign sources. This also implicitly raises the issue of China, which now produces about four times as much steel as the U.S., and is a worry that Republicans and Democrats in Congress share, Cooper said.

Companies joining AAM must first work out an agreement with unions representing workers at their firms, AAM officials said. These agreements also limit the roles those companies can have in working with AAM on specific issues.

Another opponent of the steel industry said the nature of the group will only become clear over time. If it is a steelworker-centered effort, “you’ll see an emphasis on trade remedy laws,” the source said. 

While some might see the new group as a potential rival to the National Association of Manufacturers (NAM), AAM sources insisted that is not the case. “It’s not a direct response to NAM,” said Gary Hubbard of the steelworkers. NAM has seen internal battles over China policy among members in recent years.