Each year Northeastern Minnesota’s iron mines produce 40 million tons of taconite. Those mines directly contribute $1.8 billion to the state’s economy while helping to form the backbone of America’s steel supply. It shouldn’t be much of a surprise that more than 10,000 Minnesota jobs depend on the health and security of the nation’s steel industry.
Unfortunately, America’s steel producers are now facing a real problem, and one that could have serious repercussions for Minnesota’s mining industry.
Much of Minnesota’s iron ore eventually is transformed into steel pipe and tube products called “Oil Country Tubular Goods,” or OCTG. This pipe is used in the extraction of oil and natural gas, which has become a booming U.S. industry. Quite literally, these steel products serve as the infrastructure that is helping America to become more energy independent.
But even as America moves toward energy independence, we might be about to trade one kind of reliance for another. Right now, America’s steelmakers are facing a deluge of foreign steel imports that are being sold at below cost in the U.S. Simply put, steel companies in South Korea and in eight other countries are flooding the U.S. market with OCTG pipe, and they care little about where that pipe ends up or at what price, even if it’s dumped into America at below-market prices.
Washington should be paying attention, though, and should make sure our trade laws are enforced against this “dumping.” That’s why America’s steelmakers and their workers are calling on Washington to fully investigate the situation and apply the rules on the books to keep all steel trade above board.
Here’s what we know: The market in the U.S. for OCTG pipe is now so big that nine countries - including South Korea, India, Vietnam and Turkey - have upped their pipe and tube exports to the U.S. from 850,000 tons in 2010 to 1.8 million tons in 2012. Imports from South Korea alone accounted for half of that increase.
No matter that South Korea doesn’t have a market for OCTG, because it doesn’t have oil and gas reserves to tap. No matter that much of this OCTG pipe comes to the U.S. at unfairly low prices and in deceptive ways that circumvent international trade laws.
Domestic steel producers have taken a stand, though, and have filed a trade case with the U.S. Department of Commerce. It should be an open-and-shut decision. But in its preliminary ruling, Commerce let South Korea entirely off the hook.
And the direct effect was immediate. Domestic steel producers of OCTG pipe were forced to cut production and lay off hundreds of workers across the country.
So here’s the situation: Will our government sit idly by? Or will we enforce our trade laws to ensure that countries are not allowed to cheat their way into the U.S. market?
Washington still has time to get its act together. Commerce will make its final decision on the issue in July; and when it does, it should recognize South Korea’s dumping and impose duties in response.
OCTG pipe is a growing market that can benefit the U.S. But that will only happen if American workers aren’t undercut by our inability to enforce our own trade rules. It’s important to get this right, which is why Minnesota’s steelworkers, miners and business owners will be rallying for their jobs on Monday in Virginia. I’ll be there with them.
If you believe our fellow Americans and your neighbors, who contribute to the production of some of the finest steel in the world, deserve a fair chance to compete, come join us. Don’t let trade cheats take down a proud iron and steel tradition. In a fair fight, we’ll always win.
Scott Paul is president of the Washington, D.C.-based Alliance for American Manufacturing (americanmanufacturing.org) and will be among speakers at a rally Monday at 10 a.m. at the Miners Memorial Building in Virginia, Minn. He wrote this exclusively for the News Tribune.
What: Rally with Minnesota steelworkers, miners, business owners and anyone else who wants to protest how foreign-made steel is being dumped into the U.S. at below-market prices
When: 10 a.m. Monday
Where: Miners Memorial Building, Virginia