ITC Decision to Proceed with Steel Trade Case to Sanction Chinese Unfair and Illegal Practices Could Provide Significant Relief

United Steelworkers (USW) President Leo W. Gerard issued the following statement today after the U.S. International Trade Commission decided to initiate action on the complaint filed by U.S. Steel Corp. under Section 337 of the Tariff Act of 1930. The petition was filed at the ITC on April 26, seeking relief from China’s unfair and illegal practices in the steel sector.

“Today’s decision by the ITC to proceed with a trade case to sanction the unfair and illegal practices of Chinese steel producers and their distributors affecting the U.S. steel sector may provide a path to significant relief. The broad case may finally force Chinese companies to account for their policies and practices that have damaged U.S. steel producers and workers. Right now, more than 13,500 workers in the sector have received layoff notices. Chinese companies are the single largest contributor to the devastation that has occurred.

“The case puts new tools in the hand of those who have been fighting Chinese unfair trade practices. The complaint, brought under Section 337 of the trade laws, alleges a broad array of predatory, protectionist and illegal trade practices. U.S. Steel, which brought the case with the strong support of the USW, now has the ability to engage in ‘discovery.’ Discovery is a legal process that amounts to this: Chinese companies will have to provide the documents to prove that they are not engaged in the practices they are accused of utilizing.

“The second tool is also significant. It is a sledgehammer to finally stop unfairly traded Chinese steel products. If the case is finally decided in America’s favor, broad exclusion orders against Chinese steel products could be authorized.

“The case clearly lays out the array of actions Chinese companies and their distributors have taken to steal market share and jobs, including conspiring on pricing among producers, creating elaborate evasion schemes to make enforcement difficult, and using state-sponsored hackers to steal trade secrets and proprietary technologies. These technologies are vital to the production of lighter and stronger materials used in the auto sector, the single largest consumer of steel in the United States.

“Workers in the steel industry ranging from flat products to pipe and tube to stainless have shared in the pain. Right now, the approach has been to go after one product at a time. This action now, however, could lead to further relief, but China must also be held accountable for its continuing efforts to increase global overcapacity in steel and other products.

“Today’s decision is a major leap forward. There’s a long way to go, but we are hopeful that fair trade may finally be restored.”

What is Section 337?

Section 337 of the Tariff Act of 1930 authorizes the U.S. International Trade Commission to take action against “unfair methods of competition and unfair acts in the importation of articles…the threat or effect of which is – 1) to destroy or substantially injure an industry in the United States; 2) to prevent the establishment of such an industry; or, 3) to restrain or monopolize trade and commerce in the United States.” Initial consideration of a complaint at the ITC is by an administrative law judge and their decision will be reviewed by the full commission. If relief is authorized, the United States Trade Representative has the authority to review any recommendation.

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