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American Iron and Steel Insitute Supports Currency Reform Bill
03/22/2013 - The American Iron and Steel Institute says China’s undervalued currency is a key reason why the U.S. has lost 5.7 million manufacturing jobs in the last decade, and has urged Members of Congress to support currency legislation introduced this week to remedy this unfair trade practice.
China’s undervalued currency is a key reason why the United States has lost 5.7 million manufacturing jobs in the last decade, the American Iron and Steel Institute (AISI) says. Prolonged currency manipulation by China, and other countries who misalign currency to the U.S. dollar at a below market rate, provides a subsidy which makes steel and other goods from China artificially less expensive compared to domestic products, the institute says. AISI has urged Members of Congress to support legislation introduced this week by Representatives Tim Murphy (R-PA), Sander Levin (D-MI), Tim Ryan (D-OH) and Mo Brooks (R-AL) to remedy this unfair trade practice.
“Currency manipulation to gain an unfair competitive advantage is among the most destructive trade-distorting practices used today,” said Thomas J. Gibson, president and CEO of AISI. “While China has been the largest offender, in today’s weak global economy an increasing number of governments are manipulating their currencies to insulate their domestic producers. This is devastating to U.S. domestic manufacturers – especially the steel industry -- and is contributing to the nation’s inability to fully recover from the recession.”
The bill introduced, “The Currency Reform for Fair Trade Act,” passed the U.S. House with overwhelming support in the 111th Congress and had 234 bipartisan cosponsors in the 112th Congress. The legislation gives U.S. manufacturers the ability to use the existing countervailing duty law to obtain a remedy for injury caused by goods benefiting from a currency manipulation export subsidy.
Gibson said China continues to provide massive subsidies to its steel industry, in addition to manipulating its currency, allowing it to build export-oriented capacity far in excess of its home market demand. In 2012, China’s steel capacity reached 970 million tons, which was 250 million tons beyond Chinese demand.
“China’s overcapacity is two-and-half times the size of our entire domestic steel market. We greatly appreciate the efforts of Representatives Murphy, Levin, Ryan and Brooks to introduce this legislation signaling that Congress is not going to sit idly by while China and others refuse to play by the rules,” he concluded.
