Tom Danjzcek is the President of Steel Manufacturers Association (SMA). The SMA is the primary trade association for EAF steel producers, often referred to as “minimills.” The SMA is the largest steel industry trad
WASHINGTON, DC (February 9, 2010) – The Steel Manufacturers Association[1] (“SMA”) Board of Directors is pleased to announce that Robert Simon, Vice President & General Manager of Evraz Rocky Mountain Steel, has been named Chairman of the SMA Board of Directors for 2010 and 2011.Mario Longhi, President & CEO of Gerdau Ameristeel, had served as SMA’s Chairman for the past two years.
Mr. Simon has been with Evraz Inc. NA since 1992, beginning his career as an industrial engineer. He later served as Manager of Business Processes and Manager of Environmental Services and Operations, and assumed his current position in 2000. Previously, Mr. Simon was Plant Manager for Matthews International and Oregon Brass Works. Mr. Simon is a graduate of West VirginiaUniversity.
John Ferriola, Chief Operating Officer of Steelmaking Operations for Nucor Corporation, has been elected as First Vice Chairman on SMA’s Board of Directors.Mr. Ferriola has served as Nucor’s COOof Steelmaking Operations since 2007.He previously served as an Executive Vice President of Nucor Corporation from 2002 to 2007, Vice President from 1996 to 2001, General Manager of Nucor Steel, Crawfordsville, IN from 1998 to 2001, General Manager of Nucor Steel, Norfolk, NE ... from 1995 to 1998, General Manager of Vulcraft, Grapeland, TX in 1995, and Manager of Maintenance and Engineering at Nucor Steel, Jewett, TX from 1992 to 1995.
Additionally, Richard Teets, Jr., Executive Vice President for Steelmaking - President & Chief Operating Officer of Steel Operations for Steel Dynamics, Inc., has been elected as Second Vice Chairman on SMA’s Board of Directors.Mr. Teets was appointed to his current position with Steel Dynamics in August 2008.One of the founders of Steel Dynamics, Mr. Teets is now responsible for all of the company’s steelmaking operations, including the Flat Roll Division, Structural and Rail Division, Engineered Bar Products Division, Roanoke Bar Division, The Techs, and Steel of West Virginia Inc.Mr. Teets earned a bachelor’s degree in mechanical engineering from LafayetteCollege and a master’s in business administration from DuquesneUniversity.
The following Executive Committee nominations were approved by the Board of Directors: Thomas Glaister, Charter Manufacturing Company, Treasurer; Mario Longhi, President & CEO of Gerdau Ameristeel, Past Chairman; Michael Fitch, President & CEO of Alton Steel, At-Large Member; P.S. Venkataramanan, CEO of ArcelorMittal Long Carbon North America, At-Large Member; Jeff Dyck, President of Cascade Steel Rolling Mills, Inc., At-Large Member; Raul Gutierrez, Co-CEO of Deacero, S.A. De C.V., At-Large Member; Tobin Pospisil, President of Gallatin Steel, At-Large Member; Carrie Casey, President of Quality Bar Corporation, At-Large Member; Chris Jager, President of Scaw Metals Group – AltaSteel, At-Large Member; David Britten, President of SSAB, At-Large Member; and Thomas Danjczek, President of the Steel Manufacturers Association.
[1]The SMA is the primary trade association for EAF steel producers, often referred to as “minimills.”The SMA is the largest steel industry trade association in North America, whose members account for over seventy percent of total U.S. steel production.
Thank you once again the SteelOrbis Webinar: Key Issues affecting Steel Minimills by Thomas Danjczek, President, Steel Manufacturers Association. I hope you enjoyed my presentation. Since many of you have requested to view my presentation slide, you may do so by clicking on:
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Dear Secretary Locke, Ambassador Kirk, and Secretary Geithner:
Enclosed is a statement of the Steel Manufacturers Association[1] on the need to assure an orderly expansion of world trade.
The US must restore its manufacturing strength.In the last decade, the US has lost 20% of its manufacturing jobs.Other nations are exporting goods, while the US is exporting debt and jobs.We must ensure that the US is still a competitive place for manufacturing investment.We must reduce our trade and current account deficits.The nation must engage in a concerted drive for greater energy independence.We must rebuild the obsolescent and deficient US infrastructure.We must revise the US tax code, adopting a revenue-neutral value-added tax to replace an equal amount of US business taxes, to be imposed on imports, and rebated on exports.
We urge the US to convene an international monetary conference to establish a new regime of member countries with convertible free-floating currencies.This should assure a basis for world trade expansion, producing vitally needed adjustments in excessive surpluses and deficits in national trade and current account balances.Such a result is integral to a desirable and orderly expansion of world trade, avoiding trade wars engendered by the failure of monetary adjustment mechanisms.
We are forwarding the attached statement to you and to other key officials in the Administration and the Congress.
We look forward to meeting with you to review our proposal in greater detail.
Sincerely,
Thomas A. Danjczek
[1]The SMA is the primary trade association for EAF steel producers, often referred to as “minimills.”The SMA is the largest steel industry trade association in North America, whose members account for over seventy percent of total domestic steel production.
FOR IMMEDIATE RELEASE September 14, 2009 CONTACT: ADAM PARR, SMA (202.296.1515) SMA APPLAUDS PRESIDENT’S DECISION ON CHINESE TIRE 421 CASE Washington, DC – The Steel Manufacturers Association1 (SMA) expressed its appreciation to President Obama and United States Trade Representative Ambassador Kirk for their determination to apply significant duties to imports of tires from China.
During its World Trade Organization accession, China agreed to a special safeguard mechanism that allowed its trading partners to implement remedies in response to import surges. According to USTR, “The President decided to remedy the clear disruption to the U.S. Tire industry based on the facts and law in this case.” “The U.S. market has most certainly been targeted, and has experienced surges in many products,” stated Thomas A. Danjczek, President of SMA. Mr. Danjczek also expressed his appreciation to the Congressional Steel Caucus, who urged the President to set a precedent for trade law enforcement, thereby validating use of the Section 421 safeguard. According to Danjczek, “It is a significant development in both trade law enforcement and our U.S. trade relationship with China. It is time for the U.S. to rectify a steeply tilted international playing field where private U.S. manufacturers compete against foreign companies and cartels that are reliant upon market distorting practices such as currency manipulation that create a false comparative advantage, and result in the hollowing out of U.S. manufacturing.”
1 The SMA is the primary trade association for EAF steel producers, often referred to as “minimills”. The SMA is the largest trade association in North America, whose members account for over seventy percent of total U.S. steel production.
CONTACT: MAUREEN ISELIN, AISI (202.452.7116) ADAM PARR, SMA (202.296.1515)
DOMESTIC STEEL PRODUCERS RELEASE STUDY SHOWING NEGATIVE EFFECTS OF CHINA’S ECONOMIC POLICIES ON THE U.S. ECONOMY
Washington, DC – The American Iron and Steel Institute (AISI) and the Steel Manufacturers Association (SMA) released today a study describing the negative impact of China’s economic policies on the U.S. and world economies.The study is entitled Rebalancing the U.S.-China Economic Relationship:A Steel Industry Perspective.The study examines in detail the policies China has pursued to give its exports an artificial advantage in international competition, including manipulating the value of its currency, subsidizing export-oriented industries, and failing to enforce environmental laws.The study also analyzes the effect these policies have had on the United States.While the study uses the steel industry as an example of China’s policies, its conclusions are generally applicable to the U.S. manufacturing sector. “The study shows that China is violating the basic rules of the international trading system,” said Thomas J. Gibson, president and CEO of AISI.“International trade is supposed to be based on comparative advantage and genuine factors of efficiency and competitiveness.What China is doing is more like old-fashioned 18th century mercantilism.Through its policies of government ownership and subsidies, weak and inadequately enforced environmental rules and its manipulation of currency, border measures and raw material markets, the government of China has provided Chinese exports a tremendous artificial edge in world markets, at the expense of the United States and other countries.For the U.S. economy, the effects of allowing this 'China Inc.' system to continue include a $300 billion annual bilateral trade deficit, over 1.5 million lost manufacturing jobs since 2001 and a lowering of our annual GDP by as much as $500 billion." -more- PAGE TWO / DOMESTIC STEEL PRODUCERS RELEASE STUDY “The U.S. and other open economies need to make it clear that success in global competition can no longer depend upon government interventions,” Thomas Danjczek, president of SMA, stated.“It is time for the U.S. to rectify a steeply tilted international playing field, where private U.S. manufacturers cannot be expected to compete successfully against foreign companies that are reliant upon currency manipulation, and are propped up by major investment by their governments. While most other countries are exporting goods, the U.S. is exporting debt and jobs. The effect has been the hollowing out of U.S. manufacturing industries. These trade-distorting practices must be eliminated.” “China has used all sorts of measures to boost its exports,” explained Alan H. Price, partner at Wiley Rein LLP and one of the authors of the study, “including currency manipulation, export restrictions, and straight-out subsidies.Because of this, China has accumulated foreign exchange reserves worth more than $2 trillion.Now the Chinese government has announced that it intends to use those reserves to help Chinese companies expand around the world.This makes it as clear as possible that China is not trading on the same terms as the United States and the rest of the world.” The study is being released in advance of the upcoming meeting of the U.S.-China Economic and Security Review Commission, which periodically reviews issues affecting the two countries.It is available on the AISI Web site at www.steel.org, and on the SMA Web site at www.steelnet.org.
AMERICAN STEEL INDUSTRY SUPPORTS NEW WTO CASE AGAINST CHINAChina’s Export Quotas and Export Taxes areIllegal Trade Barriers That Harm U.S. Manufacturing The American Iron and Steel Institute (AISI), the Committee on Pipe and Tube Imports (CPTI), the Steel Manufacturers Association (SMA), the Specialty Steel Institute of North America (SSINA) and the United Steelworkers (USW) today indicated their strong support for a new World Trade Organization (WTO) dispute filed by the United States and European Union. The case challenges China’s export restrictions on key raw materials and minerals used in manufacturing. Specifically, the United States and the EU have requested WTO consultations with the Chinese Government regarding export restrictions placed on a variety of raw materials and minerals, including bauxite, coke, zinc, silicon, silicon carbide, fluorspar, yellow phosphorous, and manganese. When China joined the WTO in 2001, it committed to removing these restrictions. The continued existence of these export restrictions benefits Chinese manufacturers at the expense of U.S. and EU manufacturers, by prohibiting or significantly increasing the cost of exporting these raw materials. The five steel industry organizations, whose workers and member companies represent all of America’s steelmaking capacity, commended the Obama Administration and the Office of the U.S. Trade Representative in particular, for leading the effort to bring the case. They indicated that they view it as a straightforward case of trade barriers that China should have removed years ago, and which are causing significant harm to U.S. manufacturers as a result. They also expressed assurance that USTR has carefully researched these trade barriers and identified how they violate China’s WTO commitments. The five organizations pointed to China’s barriers on raw materials and minerals as just another way in which China favors its domestic manufacturing industries at the expense of the rest of the world. They indicated that removal of these barriers would improve the ability of U.S. manufacturers to obtain the raw materials they need, and to compete with Chinese producers who have benefited from these raw material export restrictions on a more level playing field. They applauded USTR’s action as a demonstration of its commitment to enforcement of trade laws, and stressed that the United States is no longer in an economic position to provide unfettered access to its market for trade based upon foreign government intervention and subsidization.
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Under WTO procedures, the parties have up to 60 days to engage in consultations on how to resolve the dispute. At that point, the United States would be able to request formation of a dispute settlement panel to hear the dispute. The WTO process, including a panel report and any Appellate Body ruling, takes approximately one year.
WASHINGTON, DC (June 12, 2009) – The Steel Manufacturers Association (SMA) urges Congress to enact “cash for clunkers”, H.R. 2751 and S. 1200. Automobile manufacturers are by far the largest customer base for the domestic steel industry; as such, SMA members have a vested interest in the return to health and vitality of the domestic automobile manufacturing base. Cash for clunkers provides U.S. lawmakers an opportunity to stimulate demand for the purchase of new automobiles. The Congressional Budget Office estimates that the plan would spur sales of approximately 625,000 vehicles; others have predicted that the total would approach 1,000,000 new automotive sales. Whatever the total, cash for clunkers would have a wide-reaching positive impact on the American economy. With the domestic steel industry operating at less than 50 percent of capacity and layoffs now impacting over one-third of the overall steel workforce, SMA views this as a tremendous opportunity to generate demand for steel products. Americans would be put back to work in manufacturing plants and supporting industries across the nation. Under the plan, car owners would receive vouchers for trading in old, fuel-inefficient vehicles; these vouchers would be used to purchase or lease new vehicles with improved fuel efficiency standards. In addition to the economic benefits, cash for clunkers would promote safety on our roads and highways through the removal of old, obsolete vehicles, would improve our environment through greater fuel efficiency, and would decrease our reliance on foreign sources of oil to fuel gas-guzzling vehicles. The House of Representatives approved Rep. Betty Sutton’s H.R. 2751 by a vote of 298-119, with strong bipartisan support. This bill sets aside $4 billion to fund the vouchers. Senator Dianne Feinstein’s S. 1200 currently awaits action. A number of discrepancies between the two versions still must be addressed – particularly whether the plan should increase its focus on higher-mileage models. It is important that these considerations do not unduly delay passage of cash for clunkers. Lawmakers should swiftly enact this plan in order to stimulate the domestic manufacturing base. In order to achieve the maximum economic and environmental impact, the final version of cash for clunkers should contain a provision that requires junked cars to be immediately shredded following the removal of all environmentally detrimental materials. This will ensure that junked cars are not maintained as a source of spare parts to keep other old, fuel inefficient vehicles on the road. Additionally, potentially harmful materials will be removed from the system, and steel producers will be provided with additional metallic units for recycling and melting. SMA joins the United Auto Workers, the Detroit automakers, the U.S. Chamber of Commerce, and numerous other groups in urging Congress to enact cash for clunkers.
FOR IMMEDIATE RELEASECONTACTS: April 15, 2009Nancy Gravatt, AISI (202.452.7116)Roger Schagrin, CPTI (202.223.1700)Tom Danjczek, SMA (202.296.1515)David Hartquist, SSINA (202.342.8450)Octavio Rangel, CANACERO (52-55) 5448.8160Ron Watkins, CSPA (613.238.6049)Guillermo Moreno, ILAFA (56-2) 233.0545Gordon Moffat, EUROFER (32-2) 738.7920STEEL INDUSTRY ORGANIZATIONS FROM THREE CONTINENTS SUBMIT COMMENTS TO CHINESE GOVERNMENT
Washington, D.C. – For the first time ever, eight steel trade associations from three continents have spoken with one voice on a shared trade policy concern.The American Iron and Steel Institute (AISI), Canadian Steel Producers Association (CSPA), Committee on Pipe and Tube Imports (CPTI), European Confederation of Iron and Steel Industries (EUROFER), Latin American Iron and Steel Association (ILAFA), Mexican Steel Producers Association (CANACERO), Specialty Steel Industry of North America (SSINA) and Steel Manufacturers Association (SMA) submitted comments to the Chinese Industry Policy Department of the Ministry of Industry and Information Technology regarding suggested amendments to the current Chinese government Iron and Steel Industry Development Plan.
“The Chinese steel industry should be governed by market principles and not by government intervention,” states the submitted comments. “China’s Iron and Steel Industrial Development Plan and other government actions are disrupting and distorting the global steel market.”The submission further states that, “Invariably, these problems can be traced to China’s pursuit of industrial policies that rely on excessive, trade-distorting government interventions intended to promote or protect China’s domestic industries.”The current Steel Policy provides for government support in the form of “taxation, interest subsidy and scientific research funds” for major iron and steel projects utilizing newly developed domestic equipment.The joint submission recommends that the Chinese government “discontinue providing subsidies,” which promote the artificial competitiveness to its steel producers.The submission also recommends that the Chinese government: (1) stop controlling and directing the operations of the steel industry, whether through the use of state-owned enterprises or other means; (2) dismantle raw material export restrictions and not introduce any new distortions in raw materials markets; (3) stop manipulating its value-added tax (“VAT”) system and other border measures; (4) establish more stringent environmental standards and enforce its environmental laws vigorously; and (5) stop manipulating its currency, which provides significant export subsidies and artificial competitive advantages. The submission concludes that, “The Chinese steel sector should be healthy and market-based – not government-owned, controlled and directed.A proper role for the Chinese government would be to: (1) end state interventions and comply with WTO commitments; (2) stop fostering conditions (subsidies, trade barriers) that encourage unfair trade; and (3) urgently address obsolete capacity and effectively adopt and enforce world-class environmental regulations.”
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To view the eight association/three continent submission in its entirety, please click here.
April 15, 2009
Government of China, Ministry of Industry and Information Technology (MIIT)
No. 13 West Chang’ an Boulevard
Xicheng District Beijing 100804
Attention: Industry Policy Department of the Ministry of Industry and Information Technology
Reference: Notice of March 7, 2009 Soliciting Public Comments and Suggestions to Amend the Current Iron and Steel Industry Development Plan Published July, 2005
In response to the above solicitation, eight steel associations from three continents -- the American Iron and Steel Institute, (AISI), Canadian Steel Producers Association (CSPA), Committee on Pipe and Tube Imports (CPTI), European Confederation of Iron and Steel Industries (EUROFER), Latin American Steel Producers Association (ILAFA), Mexican Steel Producers Association (CANACERO), Specialty Steel Industry of North America (SSINA) and Steel Manufacturers Association (SMA) -- hereby submit comments to the Industry Policy Department of the Ministry of Industry and Information Technology.
I.The Chinese Steel Industry Should Be Governed by Market Principles, Not Government Intervention
The “Iron and Steel Industry Development Policy” and other government interventions are the antithesis of a market-based steel industry.The policy:
Outlines the central government’s development goals for China’s iron and steel industry;
Details the Chinese government’s implementation measures to push steel companies in the intended direction; and
Provides for sanctions to be imposed on companies violating the government policies.
A report prepared for EUROFER found that the politico-business alliances on the central (“China Steel Inc”) as well as local levels have led to a situation where market failures are reinforced by policy failures having resulted in irrational steel capacity expansion and the creation of massive overcapacities.[1]
A report issued recently by the U.S. government (“2008 USTR Report to Congress on China’s WTO Compliance”) correctly summarizes the problem, noting that,
“{I}t appears that China has yet to fully implement important commitments, and in other areas significant questions have arisen regarding China’s adherence to ongoing WTO obligations, including core WTO principles.Invariably, these problems can be traced to
China’s pursuit of industrial policies that rely on excessive, trade-distorting government intervention intended to promote or protect China’s domestic industries.”
II.China’s Iron and Steel Industrial Development Plan and Other Government Actions Are Disrupting and Distorting the Global Steel Market
Chinese crude steel production more than doubled from 222 million metric tons (MT) in 2003 to 502 million MT in 2008.[2]China’s 2008 production increased 2.6 percent compared to 2007. In contrast, worldwide steel production (excluding China) declined 3.3 percent.[3]In response to the world economic crisis and drastic reductions in steel demand, global steel production outside of China plummeted in the first two months of 2009 (including North America, -53 percent, EU -43 percent and South America, -39 percent).However, in spite of the large financial losses that China’s steel producers themselves are claiming, Chinese steel production increased 2.4 percent in the first two months of 2009 compared to the same period in 2008,[4] causing some analysts to say that “China continues to defy market fundamentals.”[5]
In 2008, China exported 61 million MT of steel, remaining the world’s largest steel exporter. Governments in several steel producing countries conducted antidumping and countervailing duty investigations and found that Chinese exports of flat steel products, long steel products and steel pipe and tubular products were injuring domestic steel industries.
According to the China Iron and Steel Association (“CISA”), “China’s annual crude steel capacity had reached 610 million MT by the end of 2008, exceeding actual consumption by 100 million MT.”The result: “Major difficulties for China’s steel industry include expansion of production capacity, shrinking demand, grim export {prospects}, excess supply on the domestic market, slumping steel prices and relatively high price raw materials.”[6]CISA has admitted that restoring Chinese steel production in January and early February despite the lack of any real recovery in demand “only resulted in record high market inventories, which triggered a further price collapse.”[7]
·In 2008, China had realized investment of CNY 324 billion in the steel sector, up by 23.8 percent, which would add approximately 50 million MT of new capacity in 2009, raising total steelmaking capacity to 660 million MT -- and the estimated amount of overcapacity to at least 160 million MT.[8]“These new capacity additions will focus on releasing in mid 2009 … further exaggerating the overcapacity figure, especially for flat products in the second half since most of all new capacities are flat products.”[9]
III.Recommendations
The following recommendations would promote the development of a market based Chinese steel industry and are fully consistent with the commitments China made on its accession to the WTO:
1.The Chinese government should discontinue providing subsidies to its steel producers. The current Steel Policy specifically provides for government support in the form of “taxation, interest subsidy and scientific research funds” for major iron and steel projects utilizing newly developed domestic equipment.[10]The Steel Policy also states that enterprises need only provide 40 percent or above of necessary investment capital for new projects of iron making, steel making and steel rolling, suggesting that the remainder of such capital will be supplied by governmentfunds.[11]
2.The Chinese government should stop controlling and directing the operations of steel facilities, whether through the use of state-owned enterprises (“SOEs”) or other means.China’s Steel Policy provides detailed guidance for all Chinese steel producers -- including SOEs -- with respect to many key decisions.In particular, the Steel Policy:
Proposes the reorganization of China’s steel industry so that the 10 largest Chinese steel producers will account for more than 50 percent of all Chinese production by 2010, and more than 70 percent of all Chinese production by 2020;[12]
Calls for the establishment of “iron and steel factories of the recycling type,”[13] , i.e., electric arc furnaces (EAFs), even though China wholly lacks a comprehensive system for recycling steel scrap, a system that is normally needed for expansion of the EAF sector;
Directs that “large scale steel enterprises shall be mainly arranged in coastal areas”;[14]
Provides detailed guidance regarding the size of new plants,[15]the minimum size of blast furnaces to be installed in such plants,[16]and the amount of water and energy to be consumed in such plants;[17]
Stipulates that, as a matter of principle, non-Chinese companies are prohibited from controlling Chinese steel producers,[18] a principle that is completely irreconcilable with the free movement of capital and equality of treatment that underlies the tenets of the WTO.
3.The Chinese government should dismantle raw material export restrictions and should not introduce more distortions in the raw materials market.China continues to impose WTO-inconsistent restrictions on exports of key raw materials. “Despite its commitments, since its accession to the WTO, China has continued to impose restrictions on exports of raw materials, including export quotas, related export licensing and bidding requirements, minimum export prices and export duties, as China’s economic planners have continued to guide the development of downstream industries. The export restrictions create disadvantages for foreign producers by artificially increasing China’s export prices for their raw material inputs, which also drives up world prices. At the same time, the export restrictions appear to artificially lower China’s domestic prices for the raw materials due to significant domestic oversupply, enabling China’s downstream producers to produce lower priced products from the raw materials and thereby creating significant advantages for China’s domestic downstream producers when competing against foreign downstream producers both in the China market and in export markets.”[19]While China is restraining its raw material exports, the Chinese government is assisting China’s mining and steel companies in buying mines and other sources of raw materials in foreign countries.[20]To the extent that the Chinese government is subsidizing or otherwise supporting these purchases, such actions are inconsistent with market principles.
4.The Chinese government should stop manipulating its value-added tax (“VAT”) system and any other border measures that provide artificial competitiveness to China’s steel and manufacturing exports.“China’s economic planners also attempt to manage the export of many intermediate and downstream products, often by raising or lowering the VAT rebate available upon export and sometimes by imposing or retracting export duties. For example, China reduced or eliminated VAT export rebates in November 2006 and April 2007 and imposed export duties in May 2007, July 2007 and January 2008 on a wide range of semi-finished and finished steel products, as part of its efforts to discourage further unneeded creation of production capacity for these products in China.At the same time, these changes did not target all steel products, and the result was that Chinese steel producers shifted their production to high value steel products for which full or partial VAT export rebates were still available, particularly wire products and steel pipe and tube exports, causing a surge in exports of these products. In December 2008, China added even more uncertainty to the global steel market when it partially reversed course by eliminating export duties on some but not all semi-finished and finished steel products.”[21]Most recently, China increased VAT export rebates on certain flat steels (carbon cold-rolled and coated sheets, electrical steels and stainless hot-rolled and cold-rolled sheets) and certain long products (carbon alloy bars, rod and wire and stainless bars and rod) coming at a time when global steel demand remains severely depressed and capacity utilization in many industries is below 50 percent.
5.China should establish more stringent environmental standards and enforce its environmental laws vigorously.The plan correctly calls for the steel industry to comply with local and state environmental laws, and for mills to include the equipment necessary to achieve compliance.[22]All of this will be pointless, however, unless the Chinese government actually monitors compliance with environmental laws, and punishes firms that violate those laws.A recent study shows that China’s environmental standards for steel production are not up to international norms and that, in any case, the Chinese government has failed to enforce even its existing environmental standards adequately.[23]Also, the Chinese government should accelerate the closure of the obsolete and cost-inefficient steel facilities.
6.China should stop manipulating its currency, which provides significant export subsidies.The renminbi’s modest revaluation in July 2005 and its appreciation since then are grossly inadequate.However, according to Deng Xianhong, China’s Deputy Director of the State Administration of Foreign Exchange, China will "push forward with reform of the exchange rate regime in a self-initiated, gradual and controllable manner and keep the rate basically stable at a reasonable equilibrium level.&
I am writing you on behalf of the Steel Manufacturers Association. SMA represents 31 steel producers and 60,000 workers in the United States. Our members constitute the electric arc furnace scrap based segment of the American steel industry with over 60 percent of US steel production. SMA’s members are recognized as some of the most cost efficient steel producers in the world. Collectively our members are also the biggest recyclers in the country.
SMA strongly endorses your efforts to implement a stimulus package to restart the American economy. Like so many other industries, the steel industry has been badly hurt by the economic downturn. Our production has fallen by 50 percent since last August. Practically all of the industry’s 150,000 workers are suffering as a result.
To assist in this effort, we were pleased to see that you have created an Economic Recovery Advisory Board ("ERAB") to oversee the economic recovery and governmental stimulus expenditures. We are concerned, however, that your appointees may not accurately reflect the interests of America’s manufacturing sector and its workers.
Of the two appointees who are manufacturers, one represents a company whose interests increasingly lie in the financial rather than the manufacturing sector. The other company is a major multinational; indeed, a majority of its sales are outside of the United States. As a consequence, it has repeatedly expressed positions at odds with the rest of American manufacturing, including opposition to Buy America provisions, to the vigorous enforcement of our antidumping and countervailing duty laws, and to any action to force China to end its harmful practice of currency manipulation. For these reasons, neither of these two board members is likely to be able to express the views and needs of American manufacturing accurately and effectively.
Domestic manufacturing should have a strong voice on the ERAB. Because steel is such a basic material in our economy and because it is unique in being a prime raw material for two sectors that have experienced a severe downturn -- construction and automotive manufacturing -- we think that the ERAB would be well-served to include a representative from the steel industry. However, we would welcome the appointment of a representative from any manufacturer whose company’s needs, concerns, and interests accurately reflect the interests of the American manufacturing sector as a whole.
We appreciate your attention, and look forward to working with you to restore prosperity to our country.
There have been several erroneous reports recently that the US steel industry is in near collapse and seeking a massive government investment.This is grossly incorrect.While our industry is experiencing severe challenges with an operating rate below 50 percent last month and significant employee layoffs, the US steel industry is recognized globally as a low cost, efficient producer, due in large part to its high recycled content and very efficient labor utilization. The Steel Manufacturers Association(“SMA”), along with other steel interest groups, continues to advocate both to the Congress and to the Obama transition team the use of domestically produced materials for vitally needed investment in roads, bridges, and the power grid.A “Buy American clause” in enabling legislation would create American jobs, the result intended through the use of US tax dollars.The stimulus is to create jobs in the US, not elsewhere.The investment needs to be kept in the US. The use of “Buy American” represents an opportunity to create thousands of high-paying jobs to revive our own economy.It will have a positive impact on the vastly underfinanced US infrastructure, and will increase US manufacturing productivity.We hope other countries will similarly invest in their own economies.
President-elect Obama's proposed economic plan includes the rebuilding of roads, bridges, and schools as long-term strategic investments. He stated: "We'll put people back to work rebuilding our crumbling roads and bridges." The intent is to use domestically produced materials integral to a successful stimulus result. The SMA strongly supports the inclusion of a domestically produced materials clause in any infrastructure stimulus package.
