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Effect of Global Steel Trends on U.S. Producers is Focus of USTR Inquiry

Friday, March 04, 2016
Sandler, Travis & Rosenberg Trade Report

The Office of the U.S. Trade Representative is seeking comments by March 29 on the impact certain challenges in the global steel sector are having on the U.S. steel industry. In addition, a hearing on this issue will be held April 12.

According to USTR, the Organization for Economic Cooperation and Development Steel Committee recently reported that global crude steelmaking capacity more than doubled from 2000 to 2014 largely due to expansion in China. Global capacity is expected to continue to grow through 2017 despite weakening demand for steel worldwide. Specifically, the World Steel Association estimates that global demand for steel decreased by 1.7 percent and global production fell 2.8 percent from 2014 to 2015 but that for the first seven months of 2015 global steel exports increased by more than four percent relative to the same period in 2014. Similar trends were witnessed in China, the world’s largest consumer, producer and exporter of steel, where demand is estimated to have contracted by five percent, production decreased by 2.2 percent and exports increased by 26 percent.

USTR is interested in obtaining stakeholder views on the global steel industry situation and its impact on the U.S. steel industry and market as well as other U.S. industry sectors that may have concerns about the effect of excess capacity on their particular market. Specifically, USTR is interested in the following.

- status and causes of the excess capacity situation in the global steel industry, including other factors that impact the global steel market (e.g., contracting markets and softening worldwide demand, weak raw material prices, and government support and policies that encourage capacity expansion as well as exports)

- countries and policies of concern

- status of the U.S. steel market, steel manufacturing supply chain and demand trends

- impacts of foreign trade barriers, unfair trade practices, subsidies and other policies on U.S. imports and exports of steel

- the current and potential future impact of excess global steelmaking capacity on U.S. steel producing companies, U.S. workers, suppliers to the U.S. steel industry, U.S. steel consuming manufacturers, and states, localities and communities

- U.S. steel industry responses and adjustment to the impact of the global market situation on their business and overall competitiveness, including trade remedy and other U.S. enforcement

actions, industry cost savings efforts and participation in U.S. export markets

- other sectors in which excess capacity impacts a particular industry in the U.S. and may merit further consideration

- the need for further enforcement tools or approaches or legislative action

In response to sharp increases in imports of steel from China and other countries, a variety of trade remedy measures have been taken to reduce the threat to the domestic steel industries and markets of many countries, including the U.S. However, USTR notes that any comments received will not be placed in the record or considered as part of any ongoing antidumping or countervailing duty proceedings on steel imports.

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