AISI Condemns Chinese Subsidies That Undercut U.S. Producers And Cost Jobs In Comments Submitted To USTR In Support Of Investigation Into China’s Green Technology Policies

Washington, D.C., 11/16/2010 - The American Iron and Steel Institute (AISI) submitted comments yesterday in support of the United States Trade Representative’s (USTR) decision to investigate the ways in which the Chinese government’s actions to support green technology industries violate the rights of the United States under the General Agreement on Tariffs and Trade and China’s Protocol of Accession to the World Trade Organization (WTO).

“China’s steel policies provide a substantial artificial advantage to Chinese producers of green technology products,” the AISI testimony emphasized. “By the use of subsidies and other forms of government support that make steel cheaper inside China, Chinese green technology products that use steel are more competitive both inside China and in foreign markets.  These policies have a demonstrably negative impact on U.S. producers of green technology products, as well as on the U.S. steel industry, which provides these downstream producers with one of their major inputs,” the testimony stated.

“Many of the products covered by the petition are heavily steel-intensive,” the AISI testimony stated.  “China has implemented a comprehensive program to promote its steel industry through a combination of direct subsidies and access to inputs at below-market prices.  The result of these policies has been to provide a substantial subsidy to the producers of many green technology products, who benefit directly from artificially low steel prices in China.  This subsidy—combined with many other benefits the government of China provides to its green technology producers—has damaged U.S. employment growth and cost U.S. green technology competitors millions of dollars in lost sales.”

The AISI testimony addresses (1) the use of steel in green technology products, (2) the benefits of China’s steel policies for Chinese producers of green technology products and (3) the impact of Chinese green technology policies on the U.S. steel industry.  USTR’s investigation is in response to a petition filed by the United Steelworkers (USW) on September 9, 2010 alleging that the Chinese government employs illegal trade policies, including massive subsidies, in an effort to dominate green technology markets.

Steel is a vital component in the production of many green technologies, from wind towers to solar applications to coal gasification equipment.   As the AISI testimony makes clear, “green steel for green energy is a growing commercial opportunity” for America’s steel industry.  “Because of the importance of steel in a range of green technologies, any policies of the Chinese government that have

the effect of increasing the availability of steel in China, and lowering its cost … provide enormous benefits to Chinese producers of green technology products.”  In addition to massive direct and indirect subsidies, policies that provide artificial competitive advantages to Chinese producers of both steel and green technology products include government restrictions on exports of vital raw materials, such as the ones identified in the USW petition involving tungsten and antimony (both of which are used in steelmaking) and rare earth elements.   AISI is therefore urging that USTR “pursue the immediate removal of these WTO-illegal Chinese government export restrictions.” 

A key message of the AISI testimony is that China’s steel policies, which benefit Chinese producers of green technology products, will continue to threaten the United States’ role in domestic and third country clean energy markets if left unaddressed.

Click here to read the full submission.

AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice.  AISI also plays a lead role in the development and application of new steels and steelmaking technology.  AISI is comprised of 24 member companies, including integrated and electric furnace steelmakers, and 140 associate and affiliate members who are suppliers to or customers of the steel industry.  AISI's member companies represent approximately 80 percent of both U.S. and North American steel capacity.  For more news about steel and its applications, view AISI’s Web site at www.steel.org.

Contact:
Nancy Gravatt
Vice President, Communications
American Iron and Steel Institute
Tel: 202.452.7115