Dumped Foreign Steel Causes Layoffs, Pain for Steelworkers
Just over a decade ago, before the surge of dumped foreign steel in the U.S. and the Great Recession hit, the Arcelor-Mittal plant in Conshohocken, Pa., had 400-425 Steelworker members turning out specialty steel the military needs to protect its tanks and vehicles against improvised bombs they’d run over, notably in the Middle East.
Now it has 200, Steelworkers Local 9462 President Kameen Thompson says. In a year, it may have only 71. And in two years or less, it may close.
“We are the poster child of not having tariffs in place,” to stop the dumping, Thompson told an April 16 panel discussion at the AFL-CIO about the Trump administration’s new steel, aluminum and anti-China tariffs. “There’s not another plant” in the U.S. “that can make the military-strength alloy that we can.”
“If my plant goes down to 71 and could be closed next year, where will we get that steel from? If we have to rely on other countries” for it, “we’ll really be in trouble.”
The Steelworkers applaud GOP President Donald Trump’s steel and aluminum tariffs, which he imposed under a rarely used section of U.S. trade law, legalizing unilateral action to protect national security. Trump imposed the anti-Chinese tariffs under more-general trade law sections.
In both cases, Trump complained about dumped Chinese steel imports, and Thompson agrees with that. China’s overcapacity, he said, is so large that it makes as much steel of all types in one month as the U.S. does in a year.
And while China uses most of its steel at home – other panelists said it exports only 14 percent of its production – it also produces half the steel in the world. So China’s dumping drives down steel prices, and drives U.S. and other nations’ steel plants out of business, and their workers out of jobs. That’s happening even in specialty steels, such as the metal produced at Conshohocken.
The harm is not only to the company and the country, Thompson said. It’s to his colleagues, friends and work partners who are – or were – at the Pennsylvania plant.
“It’s kind of heartbreaking” he told the trade session. “Most of our members are veterans of that plant. They’ve had 25 years or more” and now they’re losing their jobs. I’m setting up programs for them to be re-acclimated” to the world of job-hunting, training them in basics such as how to write resumes and respond at interviews. They’re “not familiar with how to go online to get an application.” They’re used to walking into a company door carrying a paper resume.
The Steelworkers are helping with such retraining and education, and the now-jobless Conshohocken workers aren’t totally out of money. A 55-year-old federal program, Trade Adjustment Assistance, is designed to give at least a year’s worth of funds, plus health coverage, to workers who lose their jobs due to unfair foreign imports.
TAA will spend $300 million on workers’ pay nationwide this fiscal year, and Trump wants the same spending next year, which starts Oct. 1. It will also spend $398 million on retraining them this year and he wants to spend $450 million next fiscal year.
“We have that TAA program to get our members acclimated to a new trade and to help with their schooling,” Thompson says. “But it’s not a good situation, and it’ll be worse for our older workers.” There are four separate TAA grants for Conshohocken workers.
The panel spent some time on both why Trump imposed the tariffs on steel and aluminum from all other nations, before the follow-up tariffs against China. They suggested the best solution to the Chinese problem is unity among the other leading trade nations – notably the European Union – to force the Chinese to cut their overproduction and overcapacity by closing over-subsidized money-losing steel plants.
The catch to that, one panelist said, is the ruling Chinese Communist Party right now does not want to stop each province from subsidizing and erecting its own steel industry. Doing so would increase unemployment and the party is afraid of resulting unrest.
It’s not alone, said panelist Elizabeth Drake, a former AFL-CIO staffer and now a D.C.-based trade lawyer.
“Every country wants to have its own steel industry,” she explained. “What’s different is that China is completely off the charts” in terms of subsidies, from tax breaks, to cheap land, to below-market electricity to low-interest generous loans from state-owned (government-owned banks). Economic Policy Institute trade specialist Robert Scott added the biggest subsidy is currency manipulation.
Tariffs do little against those myriad subsidies, and Scott noted Trump’s Treasury Department, three days before, issued a congressionally mandated report about currency manipulators – and didn’t name China.
He also said while China may be the biggest steel dumper, it’s not the only one. Korea and Japan are in the game, too. Still, when the U.S. let China into the World Trade Organization in 2000 – over labor’s strong objections and lobbying – China was producing 100 million tons of steel a year.
Now, it’s 1.6 billion tons “and Korea and Japan are willing to take those dumped, subs-idized products” – China’s steel – “and ship them in manufactured products, like cars, to us.”
“Part of the ‘free trade’ myth is that if we trade a lot, we’ll all get rich, including workers,” said AFL-CIO trade specialist Celeste Drake, who moderated the session. “A lot of us in the labor movement have been saying all along ‘It doesn’t work that way.’”
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