Foreign countries are wrecking the U.S. steel industry by dumping their steel here for less than it costs them to produce it, Geneva Steel Chairman Joe Cannon told the Senate Steel Caucus on Thursday.
Worse, Cannon - who is also a Senate candidate - said those same countries block U.S. access to their own markets, where they sell steel at high prices without competition and use the profits to allow dumping in the United States.Cannon noted that Geneva recently suffered its first quarterly loss since reopening, and said it "is in large part directly attributable to price depression caused by imports."
He said mills in such countries as India, Brazil, Poland, Korea and Romania block access of relatively low-priced U.S. steel to their markets, so their own companies can sell steel there at high prices.
That allows them to dump excess production in the United States below cost - which forces U.S. producers to also drop their prices to retain their market share.
He said foreign producers "do this with impunity, knowing that foreign competitors cannot enter their home market and get away with the same unacceptable behavior."
Cannon complained that the U.S. International Trade Commission seems to not want to take action against such countries unless they are shown that foreign producers are increasing their share of the U.S. steel market.
"Do we allow thieves to return repeatedly to our homes so long as the value of their loot is stable or declining?" Cannon asked.
"Our major trading partners have been able to finance 20 years or more of dumping in our markets through extracting premium prices in their domestic markets."
Cannon said the situation may kill many U.S. steel producers.
"High foreign prices and associated profits will allow our foreign competition to modernize and develop new technologies beyond that which is achievable by American companies," he said.
"Foreign competitors will be able to sustain long-term price cutting in our markets and thereby take market share. Some American companies may be forced out of business and others that are severely and unfairly devalued may be bought out."
He added that because of the high cost of opening U.S. steel mills, "Once gone, our steel companies will not return easily."
Cannon says the Multilateral Steel Agreement the Bush administration is negotiating with other countries will only make matters worse.
"The current draft . . . doesn't actually prohibit anti-competitive conduct," Cannon said. "In our view, there is no reason to support an MSA that fails to open foreign markets."