President Barack Obama’s administration on Monday sided with American steel producers in a politically charged international trade dispute, ruling that imported steel reinforcing bar from Mexico and Turkey unfairly undercuts U.S. prices.
The preliminary decision by the U.S. Department of Commerce means companies in Mexico and Turkey will be subject to immediate duties. Within a week, the U.S. government will stop distribution at the nation’s borders of the imported steel reinforcing bar, which is known as steel rebar and is used to reinforce concrete, until a cash bond or deposit is posted in the amount of the newly imposed duties. U.S. Customs and Border Protection may impose retroactive duties for up to 90 days before the ruling due to the seriousness of the violations, Commerce said.
The amount of duties ranges from 10 percent to 66 percent for Mexican companies. For Turkish companies, the duties were about 2 percent.
Steel producers in Turkey and Mexico have denied they are violating trade laws. Companies in Mexico also have urged the Department of Commerce to avoid what they consider to be unnecessary trade disputes with Mexico, arguing American steel companies control the vast majority of U.S. market share.
Final rulings in the cases will be issued this summer.
The investigation by Commerce’s International Trade Administration was launched last fall at the request of U.S. steel producers. It has drawn the close attention of steel executives and labor unions in a midterm election year in which America’s declining manufacturing industry and shrinking middle class have become prominent political campaign issues.
Last month, United Steelworkers union president Leo Gerard cautioned that the steel industry could be on the verge of elimination if trade laws are not fully enforced.
Thirty-one senators, Republicans and Democrats, signed a letter to Commerce Secretary Penny Pritzker this month calling on full U.S. enforcement of trade laws to protect American steel jobs.
According to lawmakers, rebar imports from Turkey and Mexico have been surging into the U.S., nearly doubling from 2011 to 2013. In 2013, imports from Turkey were valued at $381 million, and those from Mexico were valued at $182 million.
“This ruling is good news for thousands of Ohio steelworkers,” said Sen. Rob Portman, R-Ohio, who signed the letter to the Department of Commerce. “Washington must stand up for American manufactured goods, and today’s ruling will help prevent unfairly traded rebar from threatening jobs here at home.”
Rebar is one of the largest-volume steel products produced in the U.S., employing more than 10,000 workers in more than 30 states, including Ohio. U.S.-based rebar traders have said the impact of the trade case will likely be immediate, since companies in Mexico and Turkey have captured much of the U.S. rebar import market.
American steel producers alleged that Mexican and Turkish competitors were undercutting their prices, a practice known as dumping. The U.S. companies also said rebar imports from Turkey were being unfairly subsidized by the Turkish government. Commerce in February made a preliminary finding that rebar from Turkey was being made with only minimal government subsidies so there was no trade violation.
Filing complaints with Commerce were the Rebar Trade Action Coalition and some of its members: Byer Steel Group Inc., of Cincinnati; Cascade Steel Rolling Mills Inc., of McMinnville, Ore.; Nucor Corp., of Charlotte, N.C.; Gerdau Ameristeel U.S. Inc., of Tampa, Fla.; and Commercial Metals Co., of Irving, Texas.
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