Manzullo offers potential solutions to surging steel, metal prices

At a March 25 Small Business Committee hearing, U.S. representative and committee chairman Don Manzullo (R-IL) offered several potential remedies to help reduce the recent surges in steel and metal prices that are harming small manufacturers and threatening job creation in the U.S.:

Fight Unfair Foreign Trade Practices– Many foreign countries are flouting international trade rules to get an unfair competitive advantage over U.S. manufacturers. This unfair advantage has increased the demand for their foreign products, which has increased their demand for U.S. steel and other metals, which increases the U.S. price for those commodities. China, specifically, manipulates its currency and directly subsidizes its corporations to give them an unfair advantage over U.S. companies. The Administration must continue to crack down on foreign currency manipulation and should support the U.S. manufacturing sector's effort to proceed with a Section 301 trade case against China for pegging its currency to the U.S. dollar. In addition, Congress should pass H.R. 3716 to allow U.S. petitioners to file countervailing duty trade cases against non-market economies, which would allow us to get tougher on China's trade abuses. The Administration should also review all existing anti-dumping and countervailing duty orders placed on foreign imports of steel into the U.S. to see if they are warranted considering the tightened markets in the U.S.

Consider export controls on U.S. scrap steel– The Administration should immediately begin a study to consider the validity of imposing export controls on U.S. scrap steel. If the Administration does not support export controls, it should draft a plan to negotiate the removal of current export restrictions on scrap steel and coking coal products imposed by Russia, the Ukraine, Venezuela, and China. Failure to remove the foreign export restrictions should result in a "hiatus" in the WTO accession process for Russia and the Ukraine.

Lower energy costs for U.S. steel and metal producers– One of the factors driving up costs for U.S. steel and metals is surging energy prices in America. The Senate must pass the Energy Bill (H.R. 6) and let the President sign it into law so that we can increase energy production in this country and lower the production costs for steel producers.

Assess threat to national security– The Department of Defense and the Bureau of Industry and Security at the Department of Commerce must examine whether the steel and metal shortages in the U.S. will have an adverse affect on our defense industrial base and our national security. They must determine whether the U.S. government needs to enact the Defense Production Act to restrict the export of certain critical metals or raw materials necessary to defend the United States from its enemies.

Investigate reported shortages of scrap steel and coking coal– The Administration, through the Department of Commerce or the U.S. International Trade Commission via a Section 332 investigation, should examine more closely the reported shortages of scrap steel and coking coal to determine the effects they have had on production problems and the overall competitiveness of U.S. industry.

"Time is of the essence, and we must begin taking action to bring the metals markets back into balance," Manzullo said. "Our manufacturers are holding on to the thinnest of threads, and they need our help to remain the thriving backbone of our economy. Our government must act to help them get through this crisis."