September 8, 2015

Bloomberg: U.S. Steel Production Declines Due To Chinese Devaluation – Tell Congress To Act

MSCI has fought hard this year to get Congress to pass strong rules that will combat currency manipulation. As we wait for Congress to return this week and House and Senate conferees to finally sit down to hammer out a customs reauthorization bill, we were interested to read this passage from a Bloomberg article that noted, “The recent devaluation of the yuan could make Chinese steel even more attractive to U.S. buyers. Exports from Brazil and Russia have also jumped as the real and ruble have fallen sharply against the greenback. U.S. producers have had no choice but to pull back. Andrew Lane, an analyst at Morningstar, expects U.S. steel production to come in at around 85 million metric tons this year, down from 98 million in 2007. ‘I don’t think we’ll get back to that level until 2020,’ Lane says.” (Click here to read more about how Chinese devaluation and a glut of Chinese steel have affected U.S. steelmakers.) 

As Connecting the Dots reported earlier this summer, the Senate version of the customs reauthorization bill mentioned above includes language that would require the U.S. Commerce Department to investigate allegations of currency manipulation and consider countervailing duties to address it. The Senate bill also includes the Enforcing Orders and Reducing Customs Evasion (ENFORCE) Act, which would address foreign efforts to evade trade-remedy orders. (To learn more about this provision, which MSCI also supports, we urge you to read this letter from our partners at the National Association of Manufacturers and the American Iron and Steel Institute.) Since the House version of the bill does not include either of these provisions, it is unclear whether they will survive and make it into a final bill. 

That’s why MSCI continues to urge its members to call their representatives and senators to urge them to support the Senate provisions. Members are also encouraged to call members of the customs bill conference committee. House conferences have not yet been named, but Senate conferees are: Finance Committee Chairman Orrin Hatch (R-UT), John Cornyn (R-TX), John Thune (R-SD), Johnny Isakson (R-GA), Ron Wyden (D-OR), Chuck Schumer (D-NY) and Debbie Stabenow (D-MI). Tell lawmakers that failure to enact this language would put the United States at a competitive disadvantage and erode the benefits of passing the Trade Promotion Authority bill they passed earlier this summer. 

Last week White House Press Secretary Josh Earnest made the same call to Congress.