Biden Admin: Don't Let Steel Giant Abuse Trade Law to Pad Its Pockets
If you're going to ask the government to protect your business from "unfair" trade practices, shouldn't you have to demonstrate that your products compete with imports? And that your business has been harmed as a result?
Thankfully, that's a basic premise of U.S. trade remedy law. It's the reason why you don't see Tesla engaged in an international trade dispute against gas-powered vehicles or Lululemon pushing a claim against foreign-made hockey masks. You cannot be injured by a product your company does not make or sell.
Which brings us to Cleveland-Cliffs, the giant Ohio-based steelmaker. Last year, Cleveland-Cliffs petitioned the U.S. government for outrageous anti-dumping tariffs of up to 300 percent on eight nations that export tin plate steel to the U.S. The company alleged that foreign steel was being dumped into the U.S., thus under-cutting its business. But the truth refutes this -- and shows how easy it is for a cynical company and its CEO to undermine U.S. trade remedy law and seek government tariffs instead of fairly competing in the marketplace.
Tin plate (or tin mill) steel is a ubiquitous material used throughout our economy in electronics, jewelry, hardware, and countless other household products. It's most commonly used in the manufacturing of cans for the many food items in every family's cupboard -- which could have increased in price by a whopping 58 cents per can if Cleveland-Cliffs' demands had been granted.
Earlier this year, the Department of Commerce outright denied tariffs on four nations named in the petition, but agreed to substantially lower tariff increases for Germany, Canada, China, and Korea. Now, the International Trade Commission is set to vote on February 6 on whether to ratify these new tariffs, which would jeopardize U.S. food and manufacturing jobs while raising grocery bills on consumers even higher.
Given the record inflation of the past three years, the last thing consumers need is more challenges to put food on the dinner table so that Cleveland-Cliffs can pad its bottom line. But separate from the obvious negative impacts of the tariffs, the record also shows that the ITC should vote to reject Cleveland-Cliffs' claims of injury. Can makers rely on imports because they need higher quality, wider, or otherwise different types of tin mill steel than what Cleveland-Cliffs produces. To say it again: You cannot be injured by a product your company does not make or sell.
This situation, then, raises fundamental questions about the trade remedy process. If Cleveland-Cliffs succeeds in its bid to install new protectionist tariffs -- on products it doesn't make and hasn't been able to supply -- it will be one of the most blatant attempts to manipulate anti-dumping law in the history of anti-dumping law. And that's saying something for the steel industry, which has been a chronic user of trade remedies, even shaping the underlying legal statutes to serve the industry's purposes.
Despite all of the facts pointing toward a finding of no injury and a dismissal of Cleveland-Cliffs' claims, that we are still talking about this case and its impact on other U.S. manufacturers and consumers highlights the degree to which the whole trade remedy process is tilted in Cleveland-Cliffs' favor. There is a perverse incentive for Cleveland-Cliffs to rely on trade remedies instead of investing in product lines.
Regardless of how the ITC votes on February 6, the curious case of tin mill steel and Cleveland-Cliffs speaks to broader issues in our nation's trade laws and the role of government in protecting consumers, downstream manufacturers, or a single steel company. The fact that the Department of Commerce already rejected much of Cleveland-Cliffs' claims speaks to the misleading nature of the petition, which government officials thankfully investigated and saw through.
If one profit-seeking company can trigger a year-long investigation, largely lose yet also win, and potentially reap the benefits of protectionist tariffs without making the product it seeks to protect -- shouldn't we consider making changes to the underlying process? One fair place to start would be giving consumers and other U.S. manufacturers that rely on these products a greater voice in the process, incorporating something like a public interest test or revising the statute to permit greater and fairer engagement.
The ITC should have all of the facts and input it needs to render decisions that protect America and its workers -- not just one company. The vote on February 6 should have been rejected from the start.
Gerard Scimeca is Chairman of Consumer Action for a Strong Economy.
