Order Code RL32333
CRS Report for Congress
Received through the CRS Web
Steel: Price and Policy Issues
Updated June 26, 2006
Stephen Cooney
Industry Analyst
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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Steel: Price and Availability Issues
Summary
Steel prices remain at historically elevated levels. The rapid growth of steel
production and demand in China is widely considered as a major cause of the
increases in both steel prices and the prices of steelmaking inputs. Steel companies
have achieved much greater pricing power, in part through an ongoing consolidation
of the industry. Most of the integrated side of the industry, nearly half of U.S.
production, is controlled by just two companies: U.S. Steel, the traditional industry
leader, and Mittal Steel, itself the result of multiple international mergers. Moreover,
Mittal’s 2006 acquisition of the global number-two producer, Arcelor, may further
shake up the industry. Nucor and Gerdau have been active major consolidators of
U.S. minimill production.
U.S. steel production in 2005 was 104.6 million tons, a 5% decline from the
high level of 2004. The net decline in output was mainly on the integrated side of the
industry, which has continuously lost share. Imports also fell from the high level of
2004, although they have increased strongly in early 2006. Input prices, especially
ferrous scrap and iron ore, remain high and have contributed to higher production
costs, which have been largely passed along to industrial consumers.
The growth of China contributed to a large increase in demand for both steel and
steelmaking inputs. China has become both the world’s largest steelmaker and steel
consumer. By late 2005, it became a net exporter of steel, including an increase of
exports to the U.S. market. The House has passed H.R. 3283, which would require
the Commerce Department to consider petitions to establish countervailing duties
against subsidized imports from China. The Senate agreed to the provisions of S.
295, a bill to force China to revalue its currency or face a 27.5% tariff on its exports
to the United States, but action on this measure has been postponed. The Bush
Administration initiated a U.S.-China Steel Dialogue in March 2006, and the U.S.,
Canada and Mexico have asked China whether its 2005 Steel Policy calls into
question some of its WTO commitments.
Some policy developments in 2005-06 may affect domestic steel producers. The
Organization for Economic Cooperation and Development abandoned the effort to
achieve an international agreement to ban subsidies for steel mills. The federal
deficit reduction law (P.L. 109-171) included a repeal of the Continued Dumping and
Subsidy Offset Act (“Byrd Amendment”), under which domestic steel producers have
received distributions of trade remedy duties. In December 2005 the U.S.
International Trade Commission terminated an antidumping case brought by
domestic steel companies against steel wire rod imports. Also in December,
President Bush decided in a special trade safeguard case not to provide trade relief
for domestic producers of steel pipe against imports from China. In April 2006 the
World Trade Organization (WTO) Appellate Body ruled against the “zeroing”
methodology used by the U.S. Commerce Department in calculating dumping
margins. In the 109th Congress, 2nd Session, H.R. 5043 and H.R. 5529 were
introduced, which would establish some changes sought by the steel industry in U.S.
trade law, as well as a commission to review WTO decisions adverse to U.S.
interests. This report will be updated as warranted by developments.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Current State of the Steel Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
U.S. Production and Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
North American and Global Steel Industry Consolidation . . . . . . . . . . . . . . 5
World Steel Output Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Steel Price Trends and Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Steel Prices Remain at a High Plateau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Steel Input Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Steel Scrap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Rise in the Price of Iron Ore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
The Cost and Supply of Coking Coal . . . . . . . . . . . . . . . . . . . . . . . . . 17
The Price of Natural Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
The Impact of the Growth of China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
China as a Steel Producer, Consumer, and Exporter . . . . . . . . . . . . . . 19
China’s Steel Policy and the U.S.-China Steel Dialogue . . . . . . . . . . . 21
Congressional Reaction to Competition from China . . . . . . . . . . . . . . 22
Steel Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Failure to Achieve a Global Steel Subsidies Agreement . . . . . . . . . . . . . . . 24
Repeal of the Byrd Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Steel Industry Petitioners Lose Wire Rod Antidumping Case . . . . . . . . . . . 29
President Bush Denies Relief in China Safeguard Case . . . . . . . . . . . . . . . 30
WTO Decision on “Zeroing” and Proposed U.S. Trade Law Changes . . . . 32
Legislation to Give Consumers Standing in Trade Cases . . . . . . . . . . . . . . 34
List of Figures
Figure 1. Sources of U.S. Steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Figure 2. Employment in U.S. Steel Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
List of Tables
Table 1. Top Global and North American Steel Producers . . . . . . . . . . . . . . . . . . 6

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Steel: Price and Availability Issues
Introduction
Many American businesses are concerned by a long-term increase in the price
of steel. Their problems have resonated with some Members of Congress, especially
those who were previously concerned that the steel safeguard tariffs, imposed in 2002
by President Bush under the terms of Section 201 of U.S. trade law, could have been
keeping steel prices artificially high. Before those tariffs were terminated on
December 4, 2003, the costs of raw materials and other inputs in steelmaking rose,
thus creating a cost-driven increase in the price of steel. After the tariffs were
removed, the price increase nevertheless accelerated. On the other hand, after
decades of implementing efficiency improvements while struggling to be profitable,
many steel companies in 2004 found themselves making more money than in many
years. The problem of steel prices for consuming industries has been exacerbated by
a strengthening of the U.S. economic recovery and global economic growth, which
increased demand for steel.
In 2005, however, the rate of growth of U.S. industrial output moderated, and
the price of steel, domestic steel output, and steel mill companies’ earnings all
declined. The growth of China had also contributed to a large increase in demand for
both steel and steelmaking inputs. China has become both the world’s largest
steelmaker and steel consumer. By late 2005, China also became a net exporter of
steel, including an increase of exports to the U.S. market.
Moreover, in 2005-06 a number of policy decisions were taken that may
adversely affect the interests of domestic steel producers:
! The Organization for Economic Cooperation and Development
(OECD) has abandoned its efforts to negotiate an agreement among
all major steel-producing countries to ban domestic subsidies for
steel mills;
! Both houses of Congress approved a federal deficit reduction bill
that included a prospective repeal of the Continued Dumping and
Subsidy Offset Act (“Byrd Amendment”), under which many
domestic steel producers have received distributions of antidumping
and countervailing duties charged on imports;
! The U.S. International Trade Commission (ITC) decided that
domestic steel wire rod producers were not materially injured, and
thereby terminated an antidumping case brought by domestic steel
companies against imports from China, Turkey and Germany;

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CRS-2
! President Bush decided in a special trade safeguard case not to
provide trade relief for domestic producers of steel pipe against
imports from China.
! The World Trade Organization (WTO) Appellate Body in April
2006 ruled that the so-called “zeroing” methodology used by the
U.S. Commerce Department in calculating dumping margins is
violative of WTO rules, when used in administrative reviews. The
decision at the very least may lead the Commerce Department to
lower dumping margins or, in some cases, to reverse dumping
rulings altogether.
Current State of the Steel Industry
U.S. Production and Employment
The sharp rise in demand for steel, plus the consolidation of the industry, led to
higher steel prices and profits almost across the board in the industry in 2004. But
in 2005, production, prices and apparent domestic consumption all declined. The
resurgence of supply in 2004 coincided with a dramatic rise in domestic steel prices.
As production declined with demand in 2005, prices also declined. But they
remained historically strong, and fell nowhere near the levels seen before the
imposition of trade safeguard remedies in 2002.
U.S. domestic steel production for 2005 was 104.6 million tons, a 5% decline
from the 2004 level of 110 million tons. Capacity utilization declined from 94.6%
in 2004 to 87.5% in 2005.1 Imports were also down by about 10% in 2005. In part,
lower demand in the U.S. market may have been due to steel purchasers running up
inventory levels in 2004, in the face of fears about steel shortages. Also, General
Motors and Ford, the two leading consumers of steel for automotive applications,
reported significant production declines in 2005. By midyear 2006, output had risen
to about two million tons higher than in 2005 on an annual basis, and capacity
utilization to a range of 87-88%.2
Figure 1 illustrates the changing patterns of U.S. steel supply. Integrated mills
produce steel from iron ore, using coke and other inputs. They are characterized by
unionized workforces and, in competing with both minimills and imports, have been
absorbing high levels of employee and retiree benefit costs.3 The production of the
large integrated mills using basic oxygen furnace (BOF) technology (the last U.S.
1 American Iron and Steel Institute (AISI). Annual Statistical Report, 2005. All tonnage
figures in this CRS report are “short tons” (2,000 lbs.), as commonly used in the U.S. steel
industry, unless otherwise indicated.
2 American Metal Market (AMM), May 25, 2006, p. 7.
3 The so-called “legacy cost” issue is discussed detail in CRS Report RL31748, The
American Steel Industry: A Changing Profile, pp. 25-29. See also CRS Report RL33169,
Comparing Steel and Automotive Industry Legacy Cost Issues.

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CRS-3
open hearth plant closed in 1991) hovered around 60 million tons per year in the
1990s, then fell substantially below that figure after 2000. The integrated side of the
industry has consolidated by closing older operations and increasing productivity.
In 2004, production from integrated mills increased 4% to 52.6 million tons, but in
2005 it declined to 47.1 million tons, the lowest level from this type of furnace since
1982. Integrated mills remain the sole source of certain high-volume products, such
as external sheet for automobiles.
Figure 1. Sources of U.S. Steel
70
60
50
40
30
20
10
Basic Oxygen Furnace & Open Hearth
Electric Arc Furnace
Imports
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: American Iron & Steel Institute. Annual Statistical Reports 2005.
Minimills employ electric-arc furnaces (EAFs), a newer technology. They have
overtaken integrated mills as the leading source of steel by tonnage, and are now
virtually the only domestic source of “long” products, such as concrete reinforcing
bars, steel wire rod, and construction beams. Although they may use various forms
of iron ore input, most minimills rely primarily on steel scrap, which they remelt.
The minimill sector is largely non-union, and, by contrast with the integrated mills,
provides defined-contribution employee pension packages instead of benefits defined
by union contract.4
Minimills steadily increased production after the recession of 1991 and gained
market share. Figure 1 shows that their production topped 50 million tons for the
first time in 2000, when it reached 47% of domestic raw steel production, up from
37% at the beginning of the 1990s. Minimill output fell significantly in 2001 then
recovered steadily though it was almost flat in 2005 at 57.5 million tons. The
minimill share of domestic production in 2005 rose to 55%.
4 The best-known business model in the minimill industry, that of Nucor Inc., the largest
EAF producer, is described in detail in Business Week, “The Art of Motivation” (May 1,
2006), pp. 57-62.

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CRS-4
Imports increased in 2004, then fell in 2005. Figure 1 shows that imports
increased steadily in the 1990s, then surged in 1998 to more than 40 million tons.
The movement of imports has been up and down since that peak, but during the
application of safeguard tariffs fell in 2003 to 23.1 million tons, the lowest level
since 1993. Once the safeguards were removed, and given strong domestic demand,
imports increased more than 50% in 2004, to 35.8 million tons. As domestic market
demand cooled, imports in 2005 fell back to 32 million tons.
Figure 2. Employment in U.S. Steel Industry
200
150
100
50
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Iron and Steel Mills (NAICS 3311)
Steel Products From Purchased Steel (NAICS 3312)
Source: U.S. Department of Labor. Bureau of Labor Statistics.
The recovery of the steel industry is also reflected in steel mill employment
levels, as measured under the North American Industry Classification System
(NAICS 3311). As reported in average annual employment levels by the Bureau of
Labor Statistics, 2005 marks the first time since 1990 that employment in the
industry did not decrease (Figure 2). It grew marginally from 95,400 to 95,800,
despite continued progress in both the minimill and integrated sectors in reducing the
worker-hours required to produce a ton of steel.5 This compares to an overall decline
of almost 50% in steel mill employment since 1990, which had occurred year by year,
whatever the economic conditions in the industry. The only difference had been
slower decline in the mid-1990s, as opposed to a faster decline during and after the
late 1990s, when the industry was under heavy pressure from imports or low demand
levels because of recessionary conditions.
Figure 2 also illustrates employment levels in industries that fabricate steel
products from primary steel produced elsewhere (NAICS 3312). This includes
rolling mills, and pipe and tube producers. These data showed a little more
fluctuation with domestic macroeconomic trends. By 1995, the employment level
regained the level of 70,000 seen in 1990, and by 2000 it had increased to more than
5 Working hours per ton of steel produced have decreased from more than 16 in 1956 to
about 4 in 1990, more than 2.0 in 2000, and less than 2.0 in 2005. AISI, Annual Statistical
Report 2005, chart in executive summary.

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CRS-5
73,000. The recession of 2001 followed by the increased price of raw steel after late
2003 saw the employment level decline to about 60,000.
North American and Global Steel Industry Consolidation
One of the stated purposes of the presidential action of 2002 on steel safeguards
was to effect a restructuring of the domestic steel industry.6 To a great extent, that
restructuring has been achieved. There are now only two dominant players among
integrated steel mill companies in the United States, and two market leaders among
the minimill producers. The major players in U.S. steel production are also the
leaders in North America. Moreover, the leading North American and global
producer, Mittal Steel, in June 2006 reached a deal to acquire a controlling interest
in the global number-two producer, Arcelor.7 The recovery of pricing power in the
domestic industry may be attributable to industry consolidation, as well as to rising
global demand spurred by China.
Table 1 shows the results of global consolidation in the industry in recent years,
and the relative position for leading companies in the United States, Canada and
Mexico. The table includes the world’s 20 leading producers as of 2005, then all of
the other top producers in North America, whether they are domestic- or foreign-
owned.
6 “I have determined that the safeguard measures will facilitate efforts by the domestic
industries to make a positive adjustment to import competition...[including] consolidation
of United States steel producers...” President George W. Bush. Memorandum on “Action
under Section 203 of the Trade Act of 1974 Concerning Certain Steel Products” (Mar. 5,
2002) in Message to Congress (House Doc. 107-185), March 6, 2002, p.56.
7 Both companies are headquartered in western Europe, although Mittal Steel’s production
assets are widely distributed around the world, including Indonesia, Kazakhstan, South
Africa, Poland, Ukraine, South Africa, Mexico and the United States. Arcelor is itself the
result of consolidation of two French-owned steel companies, the Luxembourg steel
company and a Spanish steel company. Arcelor’s global assets include control of CST of
Brazil, the world’s largest merchant exporter of semi-finished slab steel. It has no U.S.
production assets, though it acquired the leading Canadian producer, Dofasco, in January
2006 and earlier was reported to be interested in acquiring Bethlehem Steel. On
developments in the Mittal bid for Arcelor, reference may be made to the following sources:
Bloomberg.com, “Mittal Makes $22.7 Bln. Unsolicited Bid for Arcelor” (Jan. 27, 2006);
Wall St. Journal, “Arcelor Transfers Dofasco Unit to Block Takeover” (Apr. 5, 2006), p.
A3; FT.com, “Governance May Impede Mittal’s Pursuit of Arcelor,” and “Mittal Steel
Directors Have Links to Founder” (Apr. 27, 2006); Wall St. Journal, “Arcelor Assails
Mittal’s Structure” (May 4, 2006), p. C4; Bloomberg.com, “Arcelor Starts Suit Against
Mittal on Car Steel” (May 11, 2006); Wall St. Journal, “Profits Decline at Mittal, Arcelor
as They Continue Takeover Duel” (May 13, 2006), p. A2; and, “Arcelor Expected to Reject
Higher Mittal Bid That Evens Voting Rights” (May 20, 2006), p. A3; AMM, “Arcelor Trips
Mittal with Severstal Deal” (May 30, 2006). On accession of the Arcelor board to Mittal’s
increased offer in June 2006, see Wall St. Journal, “Arcelor Agrees to Acquisition by Rival
Mittal” (Jun. 26, 2006), p. A3; and, Chicago Tribune, “Steelmakers Forge Merger Deal”
(Jun. 26, 2006), p. 1. For a detailed analysis of the implications and impact of a Mittal-
Arcelor deal on the global steel market, see Economist, “Age of Giants” (Feb. 4-10, 2006),
pp. 55-56.

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CRS-6
Table 1. Top Global and North American Steel Producers
2005
Makes
Output
HQ
Global
Steel in
(millions of
Country
Rank
N.Am.?
metric tons)
2005
2004
Mittal Steel
1
Neth.
Y
*62.98
42.84
Arcelor
2
Lux.
N
46.65
46.90
Nippon Steel
3
Japan
N
32.91
31.41
POSCO
4
Korea
N
31.42
31.05
JFE Steel
5
Japan
Y
29.57
31.13
Shanghai Baosteel
6
China
N
22.73
21.41
U.S. Steel
7
USA
Y
19.26
20.83
Nucor
8
USA
Y
18.45
17.91
Corus Group
9
UK
N
18.18
18.60
Riva
10
Italy
N
17.53
16.70
ThyssenKrupp
11
Germany
N**
16.55
17.58
OAO Severstal
12
Russia
Y
15.16
12.80
Evraz Holding Group
13
Russia
N
13.85
12.23
Gerdau
14
Brazil
Y
13.70
13.40
Sumitomo
15
Japan
N
13.48
12.33
Wuhan Iron & Steel Group
16
China
N
13.05
9.31
Steel Authority of India Ltd.
17
India
N
12.22
12.14
Anshan Iron & Steel
18
China
N
11.90
11.33
China Steel Corp.
19
Taiwan
N
11.65
12.17
Techint Group
20
Argentina
Y
11.42
8.93
BlueScope Steel
39
Australia
Y
6.78
6.60
AK Steel
48
USA
Y
5.63
5.60
Stelco
56
Canada
Y
4.54
4.91
Dofasco
60
Canada
Y
4.19
4.99
Steel Dynamics
76
USA
Y
3.28
3.15
Altos Hornos de Mexico
78
Mexico
Y
3.24
3.01
Ipsco
82
USA
Y
3.05
2.98
Vallourec
89
France
Y
2.77
2.75
Commercial Metals Co.
92
USA
Y
2.69
2.90
Algoma Steel
100
Canada
Y
2.34
2.30
Wheeling-Pittsburgh Steel
102
USA
Y
2.27
2.18
Acerinox
105
Spain
Y
2.24
2.30
*Includes total 2005 production of all companies acquired by yearend.
**Produces stainless steel at operation in Mexico.
Source: American Metal Market (Mar. 27, 2006 print ed.)
At the top of the table is Mittal Steel, a newly formed international company that
became in 2005 the largest single steel producer in the United States (about 22
million tons), North America (about 29 million tons), and the world (approximately
70 million short tons). Lakshmi Mittal, an entrepreneur originally from India, has
been building a global steel empire with operations in places as varied as Poland,
South Africa and Central Asia. With completion of the Arcelor deal, Mittal will own

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CRS-7
43% of a combined company whose unite produced more than 100 million MT of
steel worldwide in 2005.8
Among Mittal’s earlier acquisitions was a U.S. integrated steel mill, Inland
Steel. He had also independently acquired a major Mexican producer, the integrated
steel works on the Pacific coast at Lazaro Cardenas. But his major coup in becoming
the leading North American steelmaker was the acquisition of the International Steel
Group (ISG).
This occurred after the North American steel industry had nearly collapsed with
more than three dozen bankruptcies after 1998. About one-third of the companies on
earlier lists of leading U.S. and Canadian steel mill operators in 2002-2003
disappeared from independent existence, either having gone out of business or
merged into other companies.
The first bankruptcy that started a consolidation process was that of LTV Steel,
which became the foundation for ISG in 2002, when financier Wilbur L. Ross led a
group that bought the company out of liquidation. Ross put together a steel empire
under the ISG name that soon came to challenge U.S. Steel as the largest U.S.
integrated steel producer, and one of the three largest overall. He acquired another
venerable, but bankrupt, producer, Bethlehem Steel, in 2003. In 2004, ISG also
acquired Weirton Steel, a former National Steel spinoff that had tried to survive as
an independent, employee-owned corporation, but was finally forced to sell out after
20 years. Ross’ group also acquired a South Carolina minimill operation,
Georgetown Steel, which had gone into bankruptcy twice in recent years. Ross’
group was not responsible for the pension and health care legacy costs of the acquired
companies. The underfunded pension funds of bankrupt steel producers were taken
over by the Pension Benefit Guaranty Corporation (PBGC), an entity chartered by
Congress, while retirees lost their company-sponsored health care benefits. Ross also
negotiated new labor contracts with the United Steelworkers (USWA) and other
unions representing the integrated mills. These agreements conflated the number of
job descriptions within integrated mills and otherwise streamlined the organization
of labor within plants.9
But ISG’s own days as an independent operator were short-lived. In 2004 Ross
reached an agreement with Mittal, under which the latter’s global holdings were first
consolidated as Mittal Steel, then merged with the holdings of ISG in April 2005 for
a payment of about $4.5 billion to Ross and other ISG shareholders. Thus, Mittal
Steel became the largest domestic U.S. steel producer, considering both the ISG
acquisition and its previously owned Inland Steel operations, as well as the largest
in the world.10
8 Wall St. Journal, “Arcelor Agrees to ... Mittal” (Jun. 26, 2006).
9 For a quick summary of steel legacy cost developments, see CRS Report RL33169,
Comparing Automotive and Steel Industry Legacy Cost Issues, esp. pp. 6-7 and 12-13. An
earlier and more detailed account is in CRS Report RL31748, The American Steel Industry:
A Changing Profile.
10 Ispat International N.V., Ispat International to Acquire LNM Holdings to Form Mittal
(continued...)

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CRS-8
Only two other companies with major operations in the United States are among
the top ten globally – U.S. Steel and Nucor, the two largest U.S.-headquartered
companies. Both have substantially increased the global scale of their operations
through acquisitions made during the period of low prices and difficult operating
conditions after 2001. They are respectively seventh and eighth on the global list,
with each producing just under 20 million metric tons worldwide in 2005.
Historically, the largest domestic steelmaker had been U.S. Steel, the integrated
steelmaking company that had held the title for a century until 2002. It significantly
expanded its domestic operations, and took an important step in the domestic
consolidation process, when it acquired another major integrated company, National
Steel, out of bankruptcy in 2003. As in the creation of ISG, U.S. Steel only made this
acquisition after PBGC declared National Steel’s pension fund insolvent and took it
over. Also, U.S. Steel used the new pattern of labor relations with the USWA,
established earlier by ISG in its dealings with the union, to write a new labor contract
for all its U.S. steelmaking operations — both the continuing U.S. Steel plants and
the newly acquired National Steel facilities.11 U.S. Steel is also the U.S. domestic
steelmaker that has been most active in expansion abroad in recent years, having
acquired a large integrated mill in Kosi…e, Slovakia (now known as USSK) and
another in Serbia. These two mills give U.S. Steel about six million tons of capacity
in Europe.
All of the net expansion in U.S. production in recent years has occurred in the
minimill sector. Nucor is the leading U.S. minimill operator. It temporarily became
the largest domestic steel producer in 2002, passing U.S. Steel. It now operates 18
mills in 13 states and poured more than 20 million short tons of steel in 2005. In
recent years, Nucor has expanded mostly by acquisitions, notably through buying
financially struggling Birmingham Steel Corporation out of a “prepackaged”
bankruptcy in 2002. Birmingham Steel at that time was the second-largest U.S.
minimill operator.12
10 (...continued)
Steel Co. — International Steel Group to Merge with Mittal Steel for Cash and Stock,” news
release (Oct. 25, 2004); Washington Post, “Steelmaker to Be Sold for $4.5 Billion” (Oct. 26,
2004), p. E1; Wall St. Journal, “Deal Would Create No. 1 Steelmaker” (Oct. 26, 2004);
Financial Times, “Mittal Plan to Create First Global Steel Group” (Oct. 26, 2004); and,
“Merger Reveals Details of Mittal Empire” (Oct. 29, 2004); Business Week, “A New Goliath
in Big Steel” (Nov. 8, 2004), pp. 47-8; and, “The Raja of Steel” (Dec. 20, 2004), pp.50-2.
11 The story of U.S. Steel winning a takeover battle for National against AK Steel, with the
support of the USWA, was described as it unfolded in AMM, Jan. 10, 13, 24 and 27; Feb.
3 and 10; April 21 and May 21, 2003; See also, Bloomberg.com, “AK Steel Makes Rival
$1.02 Billion Bid for National Steel” (Jan. 23, 2003). On the USWA role in reorganizing
the industry and renegotiating labor contracts more generally, see AMM, Dec. 24, 2002, Jan.
8, 2003 and “A Template for Change” in Jan. 20, 2003 print ed., pp. 2-4; Business Week,
“Salvation from the Shop Floor” (Feb. 3, 2003), pp. 100-01.
12 For a summary of Nucor’s acquisitions and other developments, including Gerdau’s
expansion, in consolidation of minimill operations, see AMM, “Out of Easy Targets, Buyers
Are Beginning to Look Upstream” (Feb. 7, 2005 print ed.), pp. 10-11

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The second-largest minimill operator in North America is Gerdau, a company
based in Brazil. While producing only about a third of the tonnage of Nucor in the
domestic market, it has clearly distanced itself from the remaining minimill
companies and is the other major minimill consolidator. Gerdau in 2002 acquired
a Canadian-based company with U.S. minimill operations, Co-Steel, plus one mill
from Birmingham Steel. It consolidated these mills together with its own North
American operations to create Gerdau Ameristeel, operating in both the United States
and Canada. Then, in 2004, Gerdau acquired North Star Steel, controlled by the
Cargill Inc. group, which was seeking to exit the steelmaking business.13
Thus, Mittal, the largest operator of U.S. integrated steel mills, and Gerdau, the
second-largest operator of U.S. minimills, together control between a quarter and a
third of annual North American industry output, and are companies based outside
North America. This is an historic change for a domestic industry that had been
almost exclusively North American-based.14
In effect, the industry is highly integrated across North America. There are no
tariffs or trade barriers across the borders under terms of the North American Free
Trade Agreement. Although imports from Canada and Mexico are fully subject to
U.S. antidumping and countervailing duties, they were exempted by President Bush
from the safeguard tariffs, and therefore achieved share gains in the U.S. market.
Also, the USWA, the major union in the industry, operates in both the United States
and Canada. It is not present in Mexico, where government interference in union
affairs has been a major issue in 2006.15
The smaller integrated steel mills are disappearing as independent entities under
the wave of international consolidation. Rouge Steel, originally founded by Henry
Ford to supply his Detroit motor vehicle manufacturing operation, was acquired by
a large Russian company, Severstal. Severstal is also the primary financial source
and controlling owner of a new minimill in eastern Mississippi, designed to supply
steel to automotive assembly plants in the Deep South.16
Severstal, whose CEO Alexei Mordashov was seeking to expand his assets
outside of Russia, subsequently rose to the number 12 position in world steel
production rankings in 2005, as shown in Table 1. As part of Arcelor’s efforts to
fend off potential acquisition by Mittal, Mordashov agreed in May 2006 to merge his
13 AMM, Sept. 10 and Nov. 3, 2004.
14 A good summary list of all industry takeovers and mergers through early 2005 is in
Timothy J. Considine, The Transformation of the North American Steel Industry (April
2005, available through American Iron and Steel Institute, Washington, DC), tab. 3.
15 The Mexican government effectively removed from office Napoleon Gómez Urrutia, head
of the Miners and Metalworkers union, by recognizing as its head a dissident rival. It
charged Gómez with malfeasance and misuse of funds. He has legally challenged this action,
amid strong national protests against the government, and has been supported internationally
by the AFL-CIO and the USWA. A detailed report is in AMM, “A Deposed Leader Ignites
the Labor Reform Movement in Mexico” (Mar. 13, 2006, print ed.), p. 12.
16 The effort was organized and led by John Correnti, formerly head of Birmingham Steel;
AMM, “SeverCorr Rising” (Dec. 5, 2005 print ed.), pp. 4-5; and, May 30, 2006.

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company with Arcelor, which would make the combined company the new top global
steel producer. Mordashov was to take a 32% share of the combined company, with
the right to appoint one-third of the directors, but Mittal’s merger with Arcelor may
render the deal with Mordashov moot.
Meanwhile, after steel prices fell in 2005, Mittal Steel decided to end
steelmaking operations at Weirton (and therefore in the state of West Virginia),
though tin-coating operations are continuing.17
The remaining U.S. independent integrated mills are:
! AK Steel (no. 48 on the global list), a widely diversified steel product
manufacturer with integrated steel operations.
! Wheeling-Pittsburgh (no. 102) had been bankrupt, but used an
Emergency Steel Loan Guarantee to secure financing to build a new
minimill, and also become an operator of both technologies.18
Losing money again, despite a steel market that has remained strong
and relatively stable, Wheeling-Pitt has been the subject of reports
that it might be acquired by the Brazilian steel company, CSN. CSN
owns a rolling mill in Indiana, and might be able to use Wheeling-
Pitt’s integrated mill in Steubenville, Ohio as a source for semi-
finished slab.19
! WCI Steel of Warren, Ohio (not on list) reorganized out of
bankruptcy in May 2006.
Steel Dynamics, Ipsco and Commercial Metals (CMC), all on the bottom quarter
of the global list, are successful, U.S.-based minimill operators (though Ipsco’s
origins are in western Canada, and it maintains operations in both countries). Two
other foreign-owned companies with significant U.S. steelmaking operations are in
the table. Vallourec (no. 89) is the French-based parent of V&M, a tube-making
specialist that operates a minimill in Youngstown, Ohio. Acerinox of Spain is only
listed 105th because it specializes in stainless steel, a low-volume but high-value
product. Its North American Stainless plant in Kentucky is the largest stainless steel
plant in the United States.
There are three Canadian companies listed, Dofasco, Stelco and Algoma, and
just one from Mexico. One of the two largest and the most profitable, Dofasco, in
January 2006 was the target of a takeover battle primarily between two large
European-based companies, Arcelor and Thyssen-Krupp.20 Ultimately, control was
acquired by Arcelor, which then placed Dofasco in a trust operated by a Netherlands-
based foundation to make more difficult the parent company’s hostile takeover by
Mittal. Mittal had agreed to sell Dofasco to Thyssen-Krupp, if it acquired Arcelor.
It remains to be seen if this this transaction will be completed after the Arcelor-Mittal
17 AMM, Dec. 15, 2005 and Jan. 2, 2006
18 Ibid., Aug. 4 and Sept. 10, 2003; Mar. 8, 2004 print ed.
19 Ibid., Apr. 17, and May 9, 11, and 12, 2006.
20 For example, see ibid., Jan. 4 and 10, 2006.

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CRS-11
merger.21 Stelco, in 2005 Canada’s largest producer, reorganized in 2006 after two
years in bankruptcy protection.22 Altos Hornos de Mexico S.A. (no. 78) is also an
integrated steel mill company, and virtually the last independently owned large
Mexican steel mill. Argentina’s Techint Group moved up to number 20 on the global
list after acquiring other Latin American operations, including Hylsamex, a Mexican
minimill operation. In June 2006 Techint’s subsidiary Tenaris, reportedly the
world’s largest supplier of seamless pipe for the oil and gas industry, announced that
it had reached a deal to acquire Maverick Tube Corp., based in Missouri and the
largest maker of oil country tubular goods in North America.23
Another structural change in the industry, which may especially affect labor-
management relations in the integrated side of the U.S. steel industry, is the merger
of the United Steelworkers union with the Paper, Allied Industrial, Chemical and
Energy Workers International Union (PACE). The executive boards of the two
organizations agreed to the merger on January 11, 2005. The new union reportedly
totaled 850,000 members, located in bargaining units in the United States, Canada
and the Caribbean. While the merged union would have perhaps the longest formal
name in labor relations history (the “United Steel, Paper and Forestry, Rubber,
Manufacturing Energy, Allied Industrial and Service Workers International Union”),
its abbreviated name is the United Steelworkers, and Leo Gerard, the USWA
president, is the head of the merged union.24
Labor issues have affected the operations of two major U.S. producers in 2005-
06, and represent fallout from the industry consolidation process. AK Steel locked
out 2,400 workers represented by the Armco Employees Indepenedent Federation
(AEIF), a union not affiliated with the USWA, at its integrated Middletown, Ohio
mill on March 1, 2006, after the deadline passed to negotiate a new labor contract.
The company has stated that the expired contract was outdated by the new contracts
negotiated at the other integrated mills, discussed above, and has been operating the
mill with salaried and temporary workers. Labor-management issues have been
further complicated by an AEIF negotiating proposal for its members to be covered
under a mulitemployer health benefits plan operated by a third union, the
International Association of Machinists (IAM). The USWA represents other AK
operations, has tried to organize Middletown, and reportedly opposes Middletown
workers becoming affiliated with the IAM instead. The representation issue may be
resolved by an election organized under the auspices of the National labor Relations
Board25
21 See Wall St. Journal, “Arcelor Transfers Dofasco ...” (Apr. 5, 2006); and, AMM, (May 30,
2006).
22 On the Canadian steel industry in an era of global consolidation, see, ibid. “A Season of
Change for Canadian Steel” (Dec. 19, 2005 print ed.), pp. 4-5. On Stelco’s emergence from
bankruptcy, ibid., “Mott Paying $4.7 Million for 1M Shares in Stelco” (Apr. 4, 2006).
23 AMM, “Techint Inks Deal to Acquire All of Hylsamex for $2.25B” (May 20, 2005); and,
“Tenaris Opens Door into US via $3.2B Deal for Maverick” (Jun. 14, 2006).
24 Ibid., “Executive Boards of USW, PACE Union Vote to Merge” (Jan. 12, 2005), p. 1.
25 The development of the dispute is described in detail in ibid., “90 Days and Counting”
(continued...)

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CRS-12
The other company affected by labor-management concerns is Gerdau.
Although most minimills are non-union, the Brazilian-based company acquired three
union-represented mills from North Star. It locked out union members at the mill in
Beaumont, Texas after the existing contract expired, and talks failed to establish a
new one. But eventually the company terminated the lockout without agreement on
a new collective bargaining arrangement. Meanwhile, labor contracts also expired
at the former North Star mills in Minnesota and Iowa, but operations have continued
without a new replacement contract.26
World Steel Output Totals
At the global level, steel output grew by more than 60 million MT in 2005, but
all the net increase was accounted for by the People’s Republic of China.
Chinese steel output grew 26% or more than 71 million MT in 2005. China in 2005
produced more than 30% of all the world’s steel (total global output was 1.105
billion MT). Developments in China and its steel policies will be discussed in more
detail below. No other major national producers saw significant increases over 2004,
and most, like the United States and the rest of North America, registered small
declines in output.
The European Union (EU) as a whole and Japan both produce more steel than
the United States. The EU’s western European members (15 countries) in 2005
produced just under 15% of global steel production. The leading producer was
Germany (44 milllion MT), followed by Italy (29 million MT), France (19 million
MT) and Spain (17 million MT). The ten new EU members were not included in the
EU totals in the source, but none produced more than 10 million MT.
Japan’s total production of more than 112 million MT in 2005 compares with
93 million MT for the U.S. total, and these two countries are numbers two and three
globally, behind China. Japan’s global share was 10% and the U.S. share was 8.4%.
However, Canada and Mexico each produce in the 15-16 million MT range
annually, so the the total North American output of 126 million MT is more than
11% of the global total.
The former Soviet Union was once a leading producer, and ahead of the United
States. In 2005, the production of Russia was 66 million MT (just under 6% of
world production), and Ukraine was 39 million MT (3.5%). Together with the
smaller producers from the Commonwealth of Independent States, their share was
about 10% of global steel production. Other major producers in a second tier include
25 (...continued)
(May 29, 2006 print ed.), pp. 4-5. On inter-union issues, see ibid., “AEIF Blasts USW over
Call to Strike Down Tie with IAM” (June 12, 2006); “Locked-Out Union Picks IAM, But
Will AK, USW Let It Pass?” (Jun. 16, 2006); and, “AK Won’t Recognize IAM
Representation” (Jun. 21, 2006).
26 Other labor contracts inherited from acquisitions of Co-Steel and Sheffield Steel of
Oklahoma are also expiring. The Gerdau Ameristeel labor situation is summarized in an
AMM interview with CEO Mario Longhi, appointed in 2006, “‘You Don’t Go Through
Transition Without Some Level of Challenge’” (May 15, 2006 print ed.), p. 13.

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CRS-13
South Korea, India, Brazil, Turkey, and Taiwan, all in a 20-50 million MT annual
range.27
Steel Price Trends and Developments
Steel Prices Remain at a High Plateau
Notwithstanding the removal of President Bush’s steel safeguards, which had
been heavily criticized by many steel-consuming industries and their representatives
in Congress, the price of steel moved up, not down, after the President’s action.
Most economists would expect that, everything being equal, removal of the safeguard
tariffs would encourage importation of steel into the domestic market, more
competition with domestic steel producers, and, consequently, lower prices. But
instead the price of steel in early 2004 rose sharply. It has declined since then, but
has stayed at a much higher level than it was before the initial presidential safeguard
action of 2002.28
A few months before the imposition of the Bush safeguards in March 2002, the
price of hot-rolled carbon steel, a benchmark industrial product, fell as low as $222
per ton. During the period that the safeguards were in effect, average steel prices
were generally just above or below $300 per ton. By September 2004, nine months
after termination of the safeguards, the average spot price of this product was $700-
800 per ton. Note that large industrial users, such as the “Big Three” automotive
producers, generally negotiate longer-term contract prices, which may be
significantly lower.29 Thus, the steel users most adversely affected by high steel
prices were small and medium-sized companies that bought steel on the spot
market.30 By the latter part of 2005, the domestic price for hot-rolled coils, a
benchmark product, had retreated to less than $500 per ton, still about double the
lowest prices after 2000. By mid-2006, however, the price had moved back up to
nearly $640.31
27 International Iron and Steel Institute data presented in Global Insight. Steel Monthly
Report (Mar. 2006), tab. 2.
28 Global Insight. Steel Monthly Report (Dec. 2004), pp. 1-2.
29 This system is described in Al Wrigley, “Car Talk: Wheeling and Dealing Steel in
Detroit,” AMM, Dec.23, 2002 print ed., p. 3. It is also summarized in Brian C. Becker and
Kevin Hassett, The Steel Industry: An Automotive Supplier Perspective (Feb. 2005, funded
by the Motor & Equipment Manufacturers Assn.), p. 13.
30 See U.S. House. Committee on Small Business. Spike in Metal Prices — What Does it
Mean for Small Manufacturers? Hearings, Mar. 10 and 25, 2004.
31 Data on steel prices before, during and after the Bush safeguards are taken from ITC.
Steel: Monitoring Developments in the Domestic Industry (Investigation no. TA-204-9) and
Steel-Consuming Industries: Competitive Conditions with Respect to Steel Safeguard
Measures (Investigation no. 332-452), issued together as Publication no. 3632, Vol. 1, Table
II-27; Global Insight. Steel Monthly Report, various issues; and, specifically on the Sept.
2004 peak price, AMM, “‘Let’s Take It Slow ...’” (May 9, 2005). Later data are from Global
(continued...)

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CRS-14
Steel prices remain cyclical, reflecting overall economic trends and specific
developments in consuming industries, such as the declining demand and production
of large sports utility vehicles. But it may be also apparent that consolidation of
ownership of the North American steel industry has increased its ability to adjust
supply to demand, and thereby reduce price downswings. As John Anton, the steel
analyst for Global Insight, an economics consultancy, wrote in 2005, in commenting
on price fluctuations, “Consolidation allowed mills to cut production proactively. If
production had not fallen as soon as it had, these surpluses would have been more
extreme, and prices could have truly crashed.”32 Later he noted, “The willingness of
North American producers to cut production in defense of price will allow the
retention of a partial premium.” As of mid-2006, U.S. hot-rolled coil prices were
about one-third above levels in other world markets.33
Steel Input Costs
From the perspective of the steel industry, a substantial and at least semi-
permanent rise in the price of steel has been justified by the rapid rise in the price of
many steelmaking inputs.
Steel Scrap. Initially, the rapid rise in steel prices in 2003 was especially
linked to a rapid rise in scrap prices. This especially affected the minimill sector,
because scrap is generally the major input in electric arc furnaces, the production
technology they use. By 2002, total U.S. EAF production had overtaken the output
of basic oxygen furnaces, the steelmaking technology of integrated mills that produce
raw steel from iron ore, coke and other materials. While scrap is usually the principal
input in minimill furnaces, it is also frequently added to iron in making steel at
integrated mills (up to 25-30%), historically because it enables them to produce a
more competitively priced product, especially where absolute purity of the steel is not
a prerequisite. Thus, all parts of the industry are affected by changes in the scrap
price, though the minimills more than the BOFs. Since minimills are the low-cost
producers of many steel mill products, a less competitive minimill price enables the
integrated mills to raise their prices as well in a tight market.
The price of ferrous scrap tripled or even quadrupled in 2002-04. In early 2002,
the price of scrap was about $65 per ton, the composite price for “number 1 heavy
melt scrap,” a common commercial category, as calculated by American Metal
Market. The price reached a plateau of about $100/T from mid-2002 through mid-
2003. Then the price rise accelerated to $160/T by the end of 2003, and climbed
more steeply to an average of more than $237/T by early March 2004. More
premium grades commanded higher prices, up to reports of more than $300/T. At
31 (...continued)
Insight Steel Outlook, presented to Steel Manufacturers Assn. (May 2006). The pattern of
generally falling prices did not apply in 2005 to stainless steel; see Global Insight, Steel
Industry Review (3rd Qtr. 2005), pp. 39-40; and, Steel Monthly Review (Feb. 2006), pp. 1-2.
32 Global Insight. Steel Industry Review (3rd Qtr. 2005), p. 1.
33 Quote from Anton in Global Insight, Steel Monthly Report (Mar. 2006), p. 2; comparative
price data from Global Insight SMA presentation.

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CRS-15
three different times during 2004 (March, August and November), the price of this
benchmark category of scrap peaked near or above $250/T. By early 2005, the price
abated to around $200, but at three different subsequent periods during that year the
price of scrap again peaked at more than $220/T. By mid-2006, the price was again
higher than $245/T.34
Many in the industry ascribed the rising price and reduced availability of
domestic steel primarily to the rise in scrap prices, driven in turn by rising global
demand, especially in China. For example, one witness at a House hearing linked the
rise in scrap prices to a doubling of U.S. ferrous scrap exports, from 6 million tons
in 2000 to 12 million tons in 2003. About half of the exports in the latter year went
to just two Asian countries: China, and South Korea, whose steel exports increased
because of demand in China.35 Concern that rising metal scrap exports were driving
up domestic prices and aiding foreign competitors to U.S. metals-consuming
industries led to an unsuccessful petition to restrict non-ferrous metal exports and to
lead steel users to also consider such a request.36 No petition was ever filed,
however, for short supply controls on steel scrap exports, nor was any legislation
introduced to restrict such exports. Subsequent data indicate that U.S. ferrous scrap
exports were 11.7 million MT in 2004 and 12.4 million MT in 2005. China, taking
just under 30% of the total, is still the leading destination, but Korea in 2005 ranked
behind Canada, Mexico, and Turkey.37
Among other major exporters of scrap, Ukraine and Russia have restrictions
on ferrous scrap exports, which serve to maintain a scrap supply for their domestic
steel industries. The United States is a major net scrap exporter, and does not import
large amounts from these countries, but their exports are important in terms of the
overall global supply. U.S. negotiators have sought to eliminate scrap export
restrictions as part of negotiations with the Ukrainian government to establish
bilateral permanent normal trade relations (PNTR) and in negotiations related to U.S.
acceptance of Ukraine’s accession to the WTO. On March 6, 2006, U.S. and
Ukrainian representatives signed a WTO accession agreement. On March 23, 2006,
President Bush, following approval by Congress, signed into law a measure to
establish PNTR with Ukraine (P.L. 109-205).38 Ukraine had already passed
34 See charts in AMM, Feb. 7 and May 9, 2005 print eds., both on p. 15; Jan. 9, 2006 print
ed., p. 11; and, June 5, 2006 print ed., p. 14.
35 House Small Business Comm. Hearing (March 10, 2004). Statement of Robert J. Stevens
(Impact Forge Inc. and President, Emergency Steel Scrap Coalition).
36 On export controls on both ferrous and non-ferrous scrap, see AMM, “Short Supplies,
Export Angst” (Feb. 23, 2004 print ed.), p. 2; “Scrap Wars Create Turmoil, Skepticism”
(Mar. 3, 2004); and, “Commerce Nixes Copper’s Plea to Cap Scrap Exports” (Jul. 22, 2004),
p. 1; also, Washington Trade Daily, “Limiting Copper Scrap Exports” (Apr. 8-9, 2004).
37 AMM, “U.S. Scrap Exports a Two-Sided Affair” (Feb. 15, 2006), incl. table.
38 See CRS Report RS2114, Permanent Normal Trade Relations (PNTR) Trade Status for
Ukraine and U.S.-Ukrainian Economic Ties, by William H. Cooper. This report notes that
in 2005, “over half of U.S. imports from Ukraine consisted of steel plus coke that is used
in making steel.” A key U.S. policy change, sought by Ukraine and granted in February
(continued...)

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CRS-16
legislation to cut its ferrous scrap export tax in half to about $18/MT by the end of
2006. In the negotiations with the United States, Ukraine agreed to reduce the
ferrous scrap export tax further to one-third of the previous level. Further reductions
or elimination of the tax may be made pending negotiations with other WTO
members.39 Russia has also agreed to discuss its export taxes and restrictions on
scrap exports as part of its WTO accession negotiations. Many other nations also
have restrictive laws on the books regarding scrap exports, and these are generally
being addressed in trade negotiations by the U.S. Trade Representative.40
Rise in the Price of Iron Ore. High iron ore costs have the greatest impact
on the integrated steel industry, which must make steel from some form of iron ore.
But it also impacts the minimills, which generally must use at least small amounts
of pig iron or other iron units for purity. They have been seeking cheaper sources of
iron units, also as an alternative to high-priced scrap.
In February 2005, when the major global steel making companies arranged their
supply contracts for the coming year, Nippon Steel agreed to an unprecedented
71.5% price increase with the large Brazilian iron mining company, CVRD. This
deal set the pattern for international iron ore purchases by other integrated steel
companies, and compares with the previous high one-year price increase of less than
20% in 1980.41 In 2006 CVRD negotiated a further 19% iron ore price increase with
major European and Asian producers. After protracted negotiations with the major
iron ore producers, Chinese steelmakers also accepted the same level of prices
increase for 2006.42
38 (...continued)
2006 by the Commerce Dept., was change in Ukraine’s designation from a “non-market” to
a “market” economy. Domestic steel industry associations opposed this policy change,
which they said will make it much more difficult to win antidumping cases against
Ukrainian exporters; AMM, “Ukraine Still Playing Under Old Rules Despite New Trade
Status” (Mar. 27, 2006 print ed.), p. 2.
39 Ibid., “Ukraine OK of Export Duty Cut Stokes Fears of Scrap Shortages,” (Nov. 21,
2005), p. 7; and interview of May 26, 2006, with Jean Kemp, Director of Steel Trade Policy,
Office of U.S. Trade Representative.
40 For example, Vietnam agreed to a “significant reduction in its scrap export duties” as part
of its bilateral WTO accession negotiations with the United States, according to ibid. But
other countries are establishing or strengthening such restriction; see, AMM, “Venezuela
Bars Scrap Exports to Ensure Local Supply” (Nov. 21, 2005), p. 7.
41 AMM, “CVRD Wins 71.5% Increase in Japanese Iron Ore Deal — Asian Steelmakers
Gird for Domino Effect” (Feb. 23, 2005), p. 1.
42 CVRD did, however, agree to a 3% reduction in the price of iron ore pellets. AMM,
“CVRD Deals Call for 19% Hike in Iron Ore Fines” (May 19, 2006), and “ CVRD Seals
Iron Ore Supply Deals with Arcelor, China Steel [Taiwan]” (May 25, 2006); Wall St.
Journal, “China’s Steelmakers Hold Out as Suppliers Set Pricing Deals” (May 19, 2006),
p. B4; and, “Steel Prices Are Likely to Jump, Adding to Manufacturers’ Woes” (May 24,
2006), p. A2; Washington Post, “China Agrees to Steep Increase for Iron Ore” (Jun. 21,
2006), p. D10.

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CRS-17
Domestic iron ore production, which is in the form of taconite that is
subsequently pelletized, increased in 2004-05. After averaging less than 50 million
MT in 2001-03, production was 54.7 million MT in 2004 and 54.5 million MT in
2005. But that was still much less than the recent peak of more than 63 million MT
in 2000. Most iron ore used by the U.S. steel industry is domestically produced;
exports and imports in 2005 were essentially level (11.8 million MT in exports, with
13.0 million MT imported).43
Minimills frequently use direct-reduced iron (DRI), a product that converts raw
iron ore into units that may be substituted for scrap. However, this product requires
large amounts of natural gas, and the rise in price of this input has led to the three
DRI plants in the United States being dismantled to be reassembled and put into
production in Trinidad and Saudi Arabia. A new coal-fired plant is being built in the
Minnesota iron range.44
The Cost and Supply of Coking Coal. Coking coal has been in relatively
short supply, both domestically and internationally. According to the Department
of Energy, U.S. domestic production of coke, derived from a grade known as
metallurgical coal and used almost exclusively in blast furnaces by integrated steel
mills, was 22 million tons in 1997. It was more than 20 million tons annually from
1998 through 2000, 18 million tons in 2001 and about 17 million tons in 2002-03.
It remained below the latter figure in 2004-05.45 With China as the key source of
coke on the world market, and China’s own domestic demand growing, availability
has been squeezed, and the price has risen.
These problems were exacerbated by a mine fire and an interruption in coke
supplies from U.S. Steel, a major coke producer, to other steelmakers in 2003-04.
This created a shock wave through the integrated steel industry. According to one
industry source, the cost of coke rose from $145/ton to $250/ton between November
2003 and early 2004.46 With the recovery in domestic steel demand, imports have
had to make up the gap. They more than doubled, from 2.8 million tons in 2003 to
6.9 million in 2004, then leveled off as integrated steel production declined
43 Iron ore data from Dept. of the Interior. U.S. Geological Survey. Mineral Commodity
Summaries, 2004 and 2006; and Monthly Reports (Jan. And Feb. 2006).
44 AMM, “The Sourcing Game,” and “In Alternative Iron, Finding the Right Fit May Mean
Moving the Plant” (May 15, 2006 print ed.), pp. 4-7. Transportation costs and problems,
particularly a shortage of rail cars, have also contributed to raw material sourcing problems
for the steel industry.
45 U.S. Dept. of Energy. Energy Information Administration (EIA). “Coke Overview, 1949-
2003” (Feb.11, 2005); and, “Quarterly Coal Report” (Oct.-Dec. 2005), tab. 2.
46 Scott Robertson, “For Some Steelmakers, a Lump of Coal Would be a Welcome Gift,”
AMM print ed. (Mar. 15, 2004), p. 3. The information on the price rise is from industry
consultant Charles Bradford, in Tom Balcerek, “Back Behind the Wheel,” AMM print ed.
(Feb. 9, 2004), p. 6. The thrust of the article, however, is that higher scrap prices have made
the integrated industry overall more competitive against minimills.

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CRS-18
somewhat and domestic coke sources came back on line in 2005.47 Full supplies
have been subsequently resumed for U.S. Steel, but the company has declared itself
out of the merchant coke market. Existing coke plants are being reopened or
modernized, and some new ones are being developed, although in the latter case coke
plants sometimes engender opposition on environmental grounds.48
China is the world’s leading supplier of coke in international trade, and the
United States has been the number-two importer, behind the European Union (EU).49
As more Chinese coke output is being used in domestic steel production, export
growth flattened.50 A witness before the House Small Business Committee noted that
the Chinese coke export price had risen from $55 per ton to between $200-300 per
ton by early 2004, and that in February 2004, China was actually a net importer of
coking coal versus typical net exports of one million tons per month.51
As a consequence, China sought to tighten its allocation system, and to
substantially reduce exports by reducing export quotas and raising the price of export
licenses. The EU brought a World Trade Organization case against China, which
then agreed that the amount of coal exported to the EU would not decline in 2004.52
China also maintained this level of exports in 2005, but the EU has argued that such
temporary amelioration does not resolve the complaint. “They are under an
obligation to remove restrictions on the export of coke for steelmaking,” according
to EU external trade commissioner Peter Mandelson.53 Nevertheless, Chinese coke
prices have dropped from a short-lived peak of more than $400 per metric ton in
2004, to less than $150 in late 2005. In contrast to the situation in 2003-04, “massive
47 EIA. “Quarterly Coal Rept.” (Oct.-Dec. 2005), tab 2.
48 Weirton Steel, once a purchaser of coke from U.S. Steel, has ceased to produce raw steel
since its acquisition by Mittal. Another former U.S. Steel customer, Wheeling-Pittsburgh
has been rebuilding and modernizing its coke plant in Follansbee, WV, but the process has
been more difficult and costly than originally planned. Sun Coke, a merchant supplier, is
building a new plant in Haverhill, OH. AMM.com: “More Demand Attracts More Supply?”
(Jul. 23, 2004); “Wheeling-Pitt Mulling Post-BF Coke Strategy” (Aug. 9, 2004), “Some
Coke Batteries at 50% as Woes Continue” (Jan. 21, 2005); AMM, “Construction of Ohio
Coke Plant May Start Soon” (Jan. 2, 2006), p. 1, and, “Things Aren’t Quite Going to Plan
with W-P’s Oven Rehab” (May 15, 2006 print ed.), p. 8.
49 AMM.com, “Mills Face Coke Quandary as Chinese Prices Soar” (May 16, 2003).
50 A Chinese official stated that, “China would limit coal exports in 2004 to meet the
increasing domestic demand;” “China Coal Policy,” China Business News On-Line (Jan. 29,
2004); also; “China Coke Exports Seen Even Lower,” Platts International Coal Report
(December 8, 2003).
51 House Small Business Committee hearing (Mar. 10, 2004), statement of W. Atwell, p. 2.
52 Europe Energy 2004, “EU and China End Their Coke Trade Battle” (June 4, 2004);
interview with Jean Kemp, Director for Steel, Office of U.S. Trade Representative (Jan. 27,
2005).
53 AMM, “EU Presses China to Change Coke Export Rules” (Nov. 9, 2005), p. 4.

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CRS-19
investment” in Chinese coke resources had created a surplus of supply over demand.
U.S. prices on the same basis had also fallen below $140.54
The Price of Natural Gas. Natural gas is widely used in the steel industry,
by both integrated mills and minimills. Steel must be heated and cooled frequently
in the course of melting or remelting materials, as well as shaping and tempering
steel mill products. Among all steelmaking inputs, perhaps none has risen higher in
price recent years than gas. As of November, 2005, the benchmark Henry Hub cash
price of natural gas, at $13.83 per million BTUs, was more than double the level of
one year earlier. On comparative indices of input costs, natural gas in late 2005 was
nearly five times its long-term benchmark level and more than double the level of
one year earlier. Scrap was about double its benchmark, while coal was still within
about 15% of its benchmark.55
Gas prices have ameliorated since then. The late 2005 spike was partly caused
by Gulf “shut in” production, resulting from hurricanes Ivan (2004), Katrina and Rita
(both 2005). With a mild winter, prices dropped more than $2/mmBTU in January-
February, and settled at just over $7/mmBTU in March-May 2006. Forecasts
indicated that prices could go even lower in summer and autumn, then rise in winter
2006-07, but not higher than around $10. However, the long-term gas availability
forecast was not positive, and winter prices could be significantly higher.56
The Impact of the Growth of China
While U.S. domestic demand and input cost factors have helped account for an
overall increase in the price of steel in the domestic market, China’s emergence as
a major, market-oriented economic power is having more of an impact on steel
markets and prices than anything else today. Chinese steel mainly goes to its
domestic market. What has concerned the U.S. steel industry is that, as China adds
new and modernized steel capacity, it will be used increasingly to export surplus steel
as domestic demand is adequately met.
China as a Steel Producer, Consumer, and Exporter. In recent years,
China became the world’s largest steel producer and, at the same time, the largest
importer. It absorbed increasing amounts of the world supply of scrap and other
inputs, while its demand drove the global price of steel higher, notably in 2004.
China’s rapidly growing appetite for steel also drew in high levels of imports from
other major Asian producers such as Japan, Korea and Taiwan, probably diverting
them from the U.S. market. The consequences were higher prices for steelmaking
inputs in the United States and lower availability of imported finished steel at
competitive prices. Meanwhile, U.S. steel consuming industries increasingly must
compete with fabricated steel products from Chinese suppliers.
54 AMM, “A Cool Down in Coke Prices” (Nov. 7, 2005), pp. 4-5.
55 Gas price statistics from Global Insight, Steel Monthly Report (Nov. 2005), tab. 1; and,
Natural Gas Weekly (Jan. 11, 2006).
56 Global Insight. Steel Monthly Report (Mar. 2006), p. 8; and Natural Gas Monthly (May
2006), pp. 1-2 and tab. 5.

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The Chinese government in 2004 sought to restrain growth by curtailing
consumer credit, thus reducing the growth in demand for products made of steel, such
as motor vehicles. It has also sought to brake the development of capacity, or at least
to insure that new, modern facilities replace outdated mills. But, as Global Insight
analyst John Anton noted, if this were the Chinese central government’s policy, it has
not exactly worked.
Chinese steel production has grown at incredible rates, rising 14% in 2001 and
nearly 25% annually since. In context, China and the United States produced
roughly the same tonnage in 2000, but China is likely to produce almost three
times the U.S. output in 2005.57
China has once more become a net steel exporter: 27.6 million MT of exports,
against 27.1 million MT of imports in 2005, according to official sources.58 China
has also again fallen behind the United States in total steel imports. In March 2006
a top official of the China Iron and Steel Association (CISA), an industry body,
reassured an international audience that Chinese steel exports would be about 20
million MT in 2006, what he described as a “reasonable” level given total capacity
now 400 million MT or more, and that capacity would be nearly matched with
domestic demand.59 Some private sector sources have said that while China still has
significant labor cost advantages, these are counterbalanced by raw material and
energy costs, as both are in short supply in China.60
China’s industry remains atomized, even by comparison with an industry that
remains internationally fragmented. While China produces about a third of all steel
produced worldwide, Table 1 shows there are only two Chinese companies in the top
20: Baosteel (no. 6, 22.7 million MT produced in 2005) and Anshan (no. 18, less
than 12 million MT). However, six Chinese companies occupy the places from no.
22 to 27 in the full table published in American Metal Market, while nine of the last
15 companies, in a list of 120 ranked by production, are also from China. Many of
these companies are strongly supported by provincial governments, including with
subsidized loans, so that they can stay in production, because of their social
importance in the regional economic structure. With a decline in growth in the
demand for steel following the central government credit squeeze, virtually all the
leading steel companies in China saw profitability decline by 50 to 80%; only
Anshan saw a substantial gain in net income, and that was not due to continuing
operations.61
57 Global Insight, Steel Monthly Report (Nov. 2005), p. 1. According to IISI figures cited
earlier, China in 2005 actually produced four times as much steel as the U.S.
58 Reported in AMM, “December Increase Makes China Slight Net Exporter of Steel in ‘05”
(Jan. 13, 2006), p. 7.
59 Ibid., “China’s Steel Exports Will Not Explode in ‘06: CISA Official” (Mar. 29, 2006).
60 Ibid., “Is the China Threat Overstated?” (May 8, 2006 print ed.), p. 14.
61 Ibid., “The Stats Are In and China’s Top Ten Mills See Profitability Dip” (May 8, 2006
print ed.), p. 14.

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CRS-21
As domestic Chinese demand fell short of expectations, the U.S. market again
saw a sharp increase in steel imports from China. By 2000, China was exporting
more than one million MT of steel annually to the United States. These exports fell
off, as U.S. demand declined and trade safeguards were implemented, to 582,000 MT
in 2003. But Chinese imports in the United States almost tripled to more than 1.4
million MT in 2004, and increased again by a third to 1.9 million MT in 2005,
according to U.S. Census Bureau steel import data. Data for early 2006 indicate that,
while steel demand in China is continuing to increase, it is not keeping pace with the
building of new, modern steelmaking capacity, and Chinese exports are likely to
grow.62
China’s Steel Policy and the U.S.-China Steel Dialogue. In July 2005,
the Chinese government released the China Iron and Steel Industry Development
Policy, prepared by the National Development and Reform Commission. According
to official sources, this policy is to consolidate and modernize the industry, with a
specific goal of “strategic reorganization” to create by 2010 two 30-million-ton
annual capacity producers and several “internationally competitive” companies at the
10-million-ton level. In a joint statement to the WTO Transitional Review
Mechanism on China’s accession, the United States, Canada and Mexico in October
2005, “agreed with the goal of an efficient, rationalized steel industry” in China, but
seriously questioned the methods envisioned in the proposed new policy.
! First, they questioned how a state policy with an explicit goal to
shape a specific market outcome would work without “government
making decisions that should be made by the marketplace.”
Specifically they questioned the role that state-owned banks would
have in restructuring the steel industry, the roles of administrative
agencies, and how conflicts between central, provincial and local
governments would be resolved.
! Second, they noted that two articles on the state’s role in
implementing policy were questionable under WTO anti-subsidy
rules. Article 16 of the Chinese policy provided for various types of
state support in developing and modernizing the industry. Article 18
“encouraged” the Chinese steel industry to use domestically
produced equipment, and to import equipment only if domestically
made equipment were insufficiently advanced, unavailable or in
short supply.63
The U.S. government included these concerns in direct bilateral discussions with
China on steel policy. In December 2005, the Bush Administration declined to
provide safeguard relief against Chinese imports for the domestic steel pipe industry
62 Ibid. “China Is Awash in Steel and Racing to Exploit a Price Advantage” (Jun. 19, 2006
print ed.), pp. 6-7.
63 World Trade Organization. Committee on Subsidies and Countervailing Measures.
“Transitional Review Mechanism Pursuant to Section 18 of the Protocol on the accession
of the Peopl’s Republic of China: Questions from Canada, Mexico and the United States
Concerning Subsidies” (G/SCM/Q2/CHN/15, Oct. 13, 2005).

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CRS-22
(see below). But at that time it did propose to the Chinese a dialogue on steel policy,
within the context of the U.S.-China Joint Commission on Commerce and Trade. On
March 24, 2006, the first session of the U.S.-China Steel Dialogue was held, with the
U.S. side led by Deputy Assistant Secretary of Commerce for Asia Henry Levine and
Assistant USTR for China Affairs Timothy Stratford. Chinese participants included
their Ministry of Commerce and CISA. The U.S. side noted “serious concerns” with
the proposed Chinese Steel Policy, including preferences for domestically produced
equipment and technologies, import and export controls, controls on foreign
investment, and “de facto” technology transfer requirements. “More generally,” U.S.
representatives expressed concern with the entire approach of the policy, in
substituting government decision making for market forces, in direct contrast to
Chinese commitments at the time when they joined the WTO.64
In view of the fragmentation of China’s steel industry, which makes Chinese
companies potential targets in an era of international consolidation and strong
domestic growth, the Chinese government has included steel companies in a
proposed new foreign investment review procedure. In its Steel Policy of 2005,
China banned foreign acquisition of large steel mills, because it apparently believes
they would be especially vulnerable to takeovers during a period of restructuring of
state-owned assets. In mid-2006 the Ministry of Finance announced a new foreign
investment review body, to be organized under the National Development and
Reform Commission, for the purpose of protecting national “economic safety” in
cases of acquisitions by foreign investors. Reportedly, the Ministry plans to draw up
a list of “20 to 40 companies” that would be covered by the review policy. One
analyst stated that the main purpose of the policy was not so much to prevent foreign
investment, as it was to control the supply of advanced technology to modernizing
Chinese firms.65
Congressional Reaction to Competition from China. Congress has
been concerned regarding the competitive impact of competition from China that has
been deemed unfair, although it has not considered legislation specifically aimed
against imports of steel or steel products.
China’s government has maintained a fixed exchange rate against the dollar,
leading many U.S. manufacturers to claim that in two-way trade this is unfair,
because China’s currency value does not reflect the country’s growing industrial
competitiveness. S. 295, co-sponsored by Senators Charles Schumer and Lindsey
Graham, would add a 27.5% tariff to all imports from China unless the President
could certify within six months that China is no longer manipulating its exchange
rate. It was included as an amendment to the Foreign Affairs Authorization Bill (S.
600, Title XXIX) on April 6, 2005, when the Senate voted 67-33 not to table the
amendment. The sponsors agreed to withdraw the amendment, provided they were
guaranteed a floor vote within six months on S. 295. In July 2005 the Bank of China
64 Assistant USTR for China Affairs Timothy Stratford. “Statement at Congressional Steel
Caucus Hearing” (Jun. 14, 2006), esp. p. 3. A report on this hearing, which includes
congressional rejoinders to the USTR policy statement is in AMM, “China Fuels Fire of
Caucus Trade Grilling” (Jun. 19, 2006 print ed.), p. 2.
65 Ibid., “China to Step Up Scrutiny of Some Foreign Holdings” (June 20, 2006), p. 6.

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CRS-23
announced a new exchange rate policy, which tied its currency to an international
currency “basket,” rather than directly to the dollar — a policy change that had the
effect of a slight upward revaluation. The Senate subsequently agreed further to
postpone floor action in consideration of other steps that the Chinese government
might take.66
H.R. 1498, introduced on April 6, 2005 by Representative Tim Ryan and co-
sponsored by House Armed Services Committee Chair Duncan Hunter, would
approach the currency manipulation issue in a different way. It would define the
manipulation of exchange rates in order to gain a trade advantage as a form of
countervailable subsidy under U.S. trade law. It would also explicitly make remedies
under the law explicitly applicable to imports from the People’s Republic of China,
and subject any imports so challenged to a national security test, to see if they were
injurious to domestically produced goods deemed critical to the U.S. defense
industrial base. This bill was co-sponsored by 169 House members. It has been
referred to the Ways and Means and Armed Services Committees.
U.S. steel producers have also joined with their customers to support legislation
that would allow U.S. producers to bring countervailing duty (CVD) cases against
exporters alleged to be receiving government subsidies from governments of
countries that are designated nonmarket economies, such as China. Current
Commerce Department enforcement policy is not to bring CVD cases in these
circumstances, but rather to require U.S. producers to seek trade relief exclusively
through antidumping laws.67 On July 27, 2005, the House passed, by a vote of 255-
168, H.R. 3283, a bill introduced by Representative Philip English, that would apply
U.S. countervailing law to nonmarket economies (such as China), require extensive
monitoring of China’s commitments on trade and intellectual property rights, and
require the Treasury Department to report on China’s new currency mechanism.68
Meanwhile, the Chinese government itself intervened in a U.S. antidumping
case to request that its designation be changed to that of a market economy for the
purposes of U.S. antidumping law. On December 22, 2005, the Department of
Commerce received a request from respondents in an antidumping investigation on
imports of lined paper (A-570-901) to revise U.S. policy and to designate China as
a market economy. On February 2, 2006, Commerce also received a submission
from the Chinese government in support of this request. But the Commerce
Department found that “despite recent and ongoing reform efforts, the significant
66 CRS Report RS21625, China’s Currency Peg: A Summary of the Economic Issues, by
Wayne M. Morrison and Marc Labonte. See floor speeches of co-sponsoring Sens. Graham
and Schumer on Nov. 16, 2005 (Congressional Record, pp. S12924-95). The principal co-
sponsors announced in March 2006 a further indefinite postponement of seeking action on
the measure, following discussions with high-level representatives of the Chinese
government; see New York Times, “Trade Truce with China in the Senate” (Mar. 29, 2006).
67 For details on this issue, see CRS Report RL32371, Trade Remedies: A Primer, by Vivian
C. Jones.
68 CRS Report IB91121, China-U.S. Trade Issues, by Wayne M. Morrison.

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CRS-24
extent of continued government intervention in certain important sectors of the
economy warrants maintaining China’s designation as an NME country.”69
Steel Policy Issues
Failure to Achieve a Global Steel Subsidies Agreement
In recognition of the global nature of steel industry issues, President Bush
proposed international discussions on the elimination of excess steel capacity and
restrictions on future domestic industry subsidies, as part of his steel policy
announcement of 2001. Other governments agreed to join representatives of the
Bush Administration in discussing overcapacity and trade issues under the auspices
of the Organization for Economic Cooperation and Development (OECD), in a
process that started in mid-September 2001, despite the terrorist attack on the World
Trade Center and other U.S. targets just a few days earlier. The industrial, steel-
producing members of the OECD were joined by major non-OECD steel producers,
such as India, Russia, and, during later stages of the talks, China. The early stages
produced indications by participating governments of capacity reductions totaling
about 140 million MT of crude steelmaking capacity that could be made in their
countries by the end of 2005.70 But this was not followed by definitive commitments
to close capacity, nor have the participants agreed on the basis for an international
agreement to end domestic subsidies to the steel industry. Negotiations were
suspended indefinitely in 2004, though the parties agreed to continued future
meetings.
By June 2003, the OECD’s staff had reportedly constructed a draft proposal that
outlined compromise proposals on “six elements negotiators believe are crucial in
forming the framework of an agreement.”71 But the parties deadlocked beyond that
point, as the recovery of global steel markets and the subsequent end of the U.S.
safeguard tariffs seemed to reduce the impetus for compromise. Countries such as
Brazil and India want a recognized right to continue to subsidize certain aspects of
their steel industries, and rejected any offer to accept a phase-in period to full
elimination of subsidies. There was also a related issue as to whether subsidies
should be countervailable, even if they are notified by signatories and are considered
legitimate under exceptions to an agreement. The United States, on the one side, and
Japan and the EU on the other, differed as to whether subsidies should be allowed for
R&D activities and environmental upgrades, as might be required, for example, by
69 U.S. Dept. of Commerce. “Fact Sheet: The People’s Republic of China’s Request for
Review of Non-Market Economy Status,” and “The People’s Reublic of China (PRC) Status
as a Non-Market Economy (NME),” memorandum, antidumping investigation A-570-901
(May 15, 2006).
70 This estimate was cited in Bureau of National Affairs. Daily Report for Executives (DER),
“Major Steel-Producing Countries Launch Talks on Banning Subsidies at OECD Meeting”
(Dec. 20, 2002).
71 Nancy E. Kelly, “Steel Talks to Kick Off in Paris, Six Issues Seen Hot for Debate,” AMM
(June 10, 2003).

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CRS-25
the Kyoto Treaty on Climate Change. The U.S. steel industry itself consistently
lobbied the U.S. Administration to oppose any international acceptance of steel
industry subsidies, except as related to a plant closure.72
While the basic principle of far-reaching subsidies discipline was apparently
accepted, no agreement could be reached by mid-2004. At that point participants
agreed that, while the OECD would continue to monitor developments in steel
markets, further discussions would be suspended pending a review in early 2005.73
But a January 2005 meeting at the OECD produced no further evident progress in the
discussions. A number of private sector U.S. representatives of the steel industry at
the discussions stated that many governments were further subsidizing new
steelmaking capacity as the global market for steel boomed. The OECD members
present did agree to continue the operations of the Steel Committee.74
To further preparations for this meeting, OECD staff drafted a proposed
“blueprint” for a steel subsidies agreement. It was generally designed to ban a broad
range of steel industry subsidies across the board; in commentaries on the blueprint,
OECD officials stated that 90% or more of historical subsidies would be prohibited.
The details of the document proposed a series of solutions to outstanding issues.
A major issue was “actionability,” e.g., subjection of subsidies to trade remedy
laws. If a proposed subsidy were notified to the review committee that was to be
formed under the proposal, and this were duly “approved” by that committee by
“consensus” (unanimity), then subsidies should not be countervailable under trade
laws of participating countries. The OECD staff claimed that “all subsidies that are
actionable, remain actionable,” and that proposed de minimis standards in the
blueprint actually reduced the levels that are allowed anyway under U.S. trade law.75
Representatives of the American steel industry reacted negatively to the
blueprint. Most discussion focused on “exceptions” that would be permitted, and
types of payments that would constitute allowable subsidies. An executive of U.S.
Steel, for example, was especially concerned about the question of “actionability,”
that is, subsidies allowed under the agreement could not be subject to U.S. trade
remedy laws. The general view of the industry, as reported in trade journal articles,
72 The major issues and course of the talks were reviewed in detail in the archived CRS
Report RL31842, Steel: Section 201 Safeguard Action and International Negotiations, pp.
35-40.
73 The official paper describing the state of negotiations in addressing key issues is OECD
SG/STEEL (2004)3. “Steel Agreement Issues” (June 29, 2004). Reports on the stalemate
include DER, “OECD Steel Subsidy Talks Suspended Until 2005” (June 30, 2004), p. A-1;
Inside U.S. Trade, “Countries Agree to Shelve Formal OECD Steel Talks” (June 28, 2004).
74 AMM, “High Steel Demand Cited for Killing Global Subsidy Deal” (Jan. 19, 2005), p. 1.
75 OECD. “Blueprint for a Steel Subsidies Agreement,” attachment to letter from Deputy
Secretary General Herwig Schlögl (Mar. 31, 2005); and, “Steel Subsidies Agreement:
Blueprint,” presentation by Wolfgang Hübner to AISI/SMA (May 17, 2005). Reports on
development and release of the blueprint were in AMM, “Steel Subsidy Talks Get Another
Chance to Work” (Mar. 24, 2005); and, “OECD Delivers Blueprint for Steel Subsidies Pact”
(Apr. 4, 2005).

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CRS-26
was that an agreement designed to ban subsidies should not instead focus on carving
out exceptions to subsidy discipline.76
By October 2005 the responses to the OECD staff blueprint did not indicate that
the participating countries were moving toward a consensus on outstanding issues.
The OECD therefore terminated the high-level discussions.77 The OECD Steel
Committee, comprised of representatives of member governments and other invited
participants, continues in existence. In future meetings, the committee may review
steel industry developments in Asian countries, raw material issues, and globalization
of the steel sector.78
Repeal of the Byrd Amendment
Related in part to the financial difficulties of the U.S. steel industry in the late
1990s, the Continued Dumping and Subsidy Offset Act (CDSOA), was signed into
law in October, 2000. The CDSOA is known as the “Byrd Amendment,” because the
West Virginia Senator added it to the FY2001 Agriculture appropriations bill (P.L.
106-387).79 It requires antidumping and countervailing duties to be deposited in a
special account and distributed annually to domestic industry petitioners, who meet
eligibility criteria, to offset expenses incurred as a result of the dumped or subsidized
imports. Steel companies benefitted from distributions under this law, which was
successfully challenged in the WTO. The U.S. government lost its appeal and said
that it would comply with the WTO finding.80 Both houses of Congress approved a
bill that includes repeal of this provision, but requires the distribution of duties
collected on entries of goods made and filed before October 1, 2007 (P.L. 109-171,
§7601).
The U.S. steel industry has generally been a major recipient of the customs
duties distributed under the Byrd Amendment. For Fiscal Years 2001-04, steel
companies received disbursement checks totaling $129 million out of a total of
$1.035 billion, according to GAO calculations. U.S. Steel was the largest recipient
in the industry, at $22.6 million. AK Steel received $11.3 million. ISG received a
total of $10.4 million during this period, while one of its predecessor companies,
Bethlehem Steel, received $6 million before its acquisition by ISG. The other major
steel industry recipients were three stainless and specialty steel producers, Carpenter
76 AMM, “Pre-Agreed OECD Subsidies Dubbed a ‘Deal-Killer’ for U.S.” (Apr. 8, 2005);
and, “OECD’s Blueprint Bites into Steel Subsidy Limits” (May 18, 2005).
77 DER, “OECD Calls Off Deadlocked Multilateral Steel Negotiations” (Oct. 7, 2005).
78 Communication to CRS from U.S. Dept. of Commerce. International Trade
Administration (Jan. 11, 2006); AMM, “Long-Dead Steel Subsidy Talks Still Influential:
OECD Official” (Jun. 19, 2006 print ed.), p. 2.
79 Included as Title X; codified at 19 USC §1675c.
80 For a summary history of the measure, see CRS Report RL33045, The Continued
Dumping and Subsidy Offset Act (‘Byrd Amendment’) , by Vivian C. Jones and Jeanne J.
Grimmett.

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CRS-27
Technology, Allegheny Ludlum and North American Stainless, which each received
between $10 million and $13 million.81
By far the leading beneficiary of Byrd Amendment disbursements was the
Timken Company, a major manufacturer of roller bearings and steel used in bearings,
and other bearing manufacturers that Timken acquired or controlled. According to
the GAO, $205 million was paid out in 2001-04 to Timken alone, while a further
$135 million was paid out to Torrington (a company acquired by Timken in 2003),
and $55 million was paid to MPB Corporation, a subsidiary of Timken. These
amounts totaled nearly $400 million, accounting for almost all the funds distributed
to the U.S. domestic bearings industry, and about 40% of all duties distributed under
the Byrd law.82
For FY2005, this pattern continued, albeit with some adjustments. Overall, total
disbursements under the program fell from $284 million to $227 million, with more
than a third of the funds again going to Timken ($81 million). U.S. Steel’s receipts
took a large one-year drop from $7.1 million to $1.5 million, while the total received
by the newly formed Mittal Steel, including its subsidiaries, was more than $3
million. The leading steel industry recipient in FY2005 was AK Steel, which
received $7.1 million. Stainless and specialty steel companies were again among the
leading recipients, while the only minimill operator to receive more than $1 million
was Gerdau.83
The Bush Administration proposed repeal of the Byrd Amendment in its
FY2004-06 budget requests, on the grounds not only of the need to comply with
WTO rulings, but also because it argued that the law represented a form of “double-
dipping” and corporate welfare. Legislation to modify or repeal the law was
introduced in the Senate in the 108th Congress, but no action was taken on these
measures.84 In the 109th Congress, H.R. 1121, a measure to repeal the Byrd
Amendment, was introduced on March 3, 2005, by Representative Jim Ramstad, a
member of the Ways and Means Committee, and co-sponsored by Representative
Clay Shaw, chairman of that committee’s Trade Subcommittee. The Consuming
Industries Trade Action Coalition, which has consistently opposed steel industry
trade policy efforts, announced that repeal of the law was a top priority in the 109th
Congress.85 The GAO found that, “Some steel companies acknowledged that the
CDSOA disbursements have not been significant in relation to their size or capital
81 U.S. Government Accountability Office. Issues and Effects of Implementing the
Continued Dumping and Subsidy Offset Act, GAO Report 05-979 (Sept. 2005), fig. 8 and
tab. 8.
82 Ibid., tab. 5. The skewed distribution of funds under the law was a major point made in
comments by the GAO, and critics such as House Ways and Means Committee Chairman
Bill Thomas; see “Trade Law Opponents Point to Stats from GAO,” Washington Post (Sept.
27, 2005). Discussion of the reasons for this distribution and further analysis are in CRS
Rept. 33045.
83 AMM, “More or Less, It’s a Nice Chunk of Change” (Dec. 12, 2005 print ed.), p. 2.
84 CRS Rept. 33045.
85 AMM, “CITAC Adds Muscle to Push Repeal of Byrd Amendment” (Feb. 18, 2005), p.1.

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CRS-28
expenditure needs,” and that disbursements for many amounted to less than 1% of
net sales in a recent fiscal year. But it also found that the industry generally agreed
that the law has had a “positive impact.”86 Both the steel industry and the USWA
strongly supported keeping the law in place.87
On October 26, 2005, with the support of Chairman Bill Thomas, the House
Ways & Means Committee added repeal of the Byrd Amendment to a budget
reconciliation package. A motion to delete the Byrd repeal, offered by Representative
Stephanie Tubbs Jones, was defeated 21-18. The full package was then approved in
committee 22-17.88 Repeal of the provision thus became part of the bill on budget
reconciliation and deficit reduction (H.R. 4241), which went to the House floor,
where it was approved on November 18, 2005, by a vote of 217-215.89 Subsequently,
the Senate voted 72-19 vote to instruct conferees on the legislation not to accept any
repeal of the Byrd Amendment.90 Nevertheless, a modified version of the repealer
was included in S. 1932, the conference report on the Deficit Reduction Act of 2005.
The bill was passed by the Senate on December 21, 2005, on a vote of 51-50, decided
by the casting vote of Vice President Cheney.91
In the House-Senate conference on S. 1932, the effective date of repeal was
pushed back until October 1, 2007, reportedly at the insistence of Senator Larry
Craig.92 On the floor, a colloquy between Senator Craig and Majority Leader Bill
Frist clarified that duties assessed under antidumping and countervailing duty
(AD/CVD) orders on entries of imports before that date will be distributed to eligible
supporters of the orders, as specified in the law, even though final distribution may
occur after that date.93
The EU, Canada, Japan and Mexico, which were involved in the WTO case
against the Byrd Amendment policy, have implemented retaliatory tariffs as
86 GAO Rept., p. 70.
87 See, for example, Washington Post, “... Stats from GAO,;” on quotes from USWA
President Gerard; and, AMM, Nov. 21, 2005, and Nov. 28, 2005 print ed. on steel industry
reaction to inclusion of Byrd Amendment repeal in House legislation.
88 DER, “Ways and Means Committee Approves Repeal of Byrd Law” (Oct. 27, 2005), p.
A-25.
89 AMM, “House Repeals Byrd, Senate Fate Uncertain” (Nov. 21, 2005), p. 1.
90 DER, “Senate Urges Conferees to Drop Byrd Law Repeal from Budget Bill” (Dec. 16,
2005), p. A-9.
91 Inside U.S. Trade, “Bill Containing Byrd Repeal Clears Senate with Cheney’s Vote” (Dec.
21, 2005); Washington Post, “Senators Vote to Kill Trade Law” (Dec. 22, 2005), p. D1;
Wall St. Journal, “U.S. Firms Face Loss of Trade-Duty Revenues” (Dec. 23, 2005). As the
bill passed by the Senate contained some changes in other areas from the House-passed
version, it must be re-passed by the House in the second session; DER, “Vote on Modified
Reconciliation Report Pushed back Until February in House” (Dec. 27, 2005), p. G-3.
92 Congress Daily, “‘Byrd’ Repeal in Budget Measure Contains Key Compromise” (Dec.
20, 2005).
93 Congressional Record (Dec. 21, 2005), p. S14206.

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authorized by the WTO. The annual total of these tariffs against U.S. exports is $114
million. They remain in place, pending the definitive repeal of the law, and some of
the complainant governments have indicated concern that trade remedy duties
collected through October 1, 2007, will continue to be disbursed.94
The action of Congress in approving the underlying statute, the Deficit
Reduction Act, has been subjected to legal challenges. The issue is whether the
enrolled version of the text as sent to and signed by the President in February 2006
accurately reflected the version as passed by each chamber of Congress. Lawsuits
seeking to invalidate the entire measure on these grounds have been brought by a
number of private parties, as well as by 11 Democratic members of the House,
including the ranking members of the Judiciary Committee (John Conyers) and of the
Energy and Commerce Committee (John Dingell).95
Steel Industry Petitioners Lose Wire Rod Antidumping Case
As noted in a Congressional Budget Office analysis, the steel industry is by far
the largest user of U.S. AD/CVD orders. The CBO counted 131 AD/CVD orders
against imports of steel mill products then in place, plus a further 30 orders against
imported iron and steel pipe products, and 30 orders against assorted other iron and
steel products.96 Under U.S. trade law, in compliance with WTO rules, AD/CVD
actions are reviewed systematically after five years, to determine if penalized foreign
action — dumping or subsidization — is not occurring or not likely to recur, with
respect to the products subject to the order.97
In addition to these “sunset reviews,” the Commerce Department and the ITC
continue to receive petitions in new cases. On November 10, 2005, five U.S.
producers of carbon and alloy steel wire rod joined in a petition to the Commerce
Department, alleging that they were being injured by imports of this product from
China, Turkey and Germany. The petitioners especially focused on China, stating
that Chinese producers were being “aggressive,” and noting margins of 300%,
compared to lower margins for the other countries. Imports from the three countries
94 DER, “Trade Partners Give Cautious Response to U.S. Movement on Byrd Amendment”
(Jan. 23, 2006), p. A-1. On May 1, 2006, the EU raised its trade sanctions against the Byrd
Amendment by about 30%, to $37 million per year; European Commission. “EU Imposes
Revised Measures in Response to Continued US Byrd Amendment Payments,” press release
(May 1, 2006). The response of the U.S. government to continued sanctions was that it fully
implemented WTO findings by repealing the Byrd Amendment; WTO. “2006 News Items
– Dispute Settlement Body” (Jun. 19, 2006), pp. 4-5.
95 Tthe legal issues are described in a CRS Memorandum, “Constitutionality of the Deficit
Reduction Act of 2005,” by Thomas J. Nicola (Apr. 5, 2006). On lawsuits against the Act,
“House Dems File Suit over Budget Bill Error,” Congress Daily (Apr. 28, 2006).
96 Congressional Budget Office. “Economic Analysis of the Continued Dumping and
Subsidy Offset Act of 2000,” attachment to letter from Director Douglas Holtz-Eakin to
Rep. Bill Thomas, Chairman, House Ways and Means Committee (March 2, 2004), p.3.
97 Sunset reviews of AD/CVD orders are discussed in CRS Report RL32371, Trade
Remedies: A Primer, by Vivian C. Jones.

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increased from 12% of the U.S. market in 2002 to a quarter of the market or more in
2004 and the first half of 2005, according to the petitioners.98
On December 1, 2005, the ITC held its hearing on the preliminary determination
of material injury, listening to the petitioners, as well as representatives of wire rod
users, who claimed that imports were necessary, following shortages experienced in
2004.99 On December 23, 2005, the ITC announced, in a unanimous 6-0 decision,
a negative injury finding that terminated the case.100
President Bush Denies Relief in China Safeguard Case
While the ITC rejected the wire rod producers’ antidumping case, it had ruled
in favor of a safeguard petition brought by steel pipe producers under the special
China safeguard provision of Section 421 of the 1974 Trade Act.101 The Section 421
safeguard was negotiated with China as part of the U.S. agreement to China’s WTO
accession package, and added by Congress to U.S. trade law in 2000. But as in three
previous cases on which the ITC had recommended remedies under this provision,
including one case involving steel wire used in coat hangers, President Bush rejected
any safeguard remedies.
Safeguard actions are different from AD/CVD cases, in that petitioners do not
have to demonstrate actions by exporters that are deemed unfair under U.S. trade law.
In a regular safeguard case, however, petitioners do have to demonstrate “substantial”
injury, e.g., injury from imports that is greater than any other cause. In a China
safeguard case, petitioners need only demonstrate a lesser standard of injury, that of
“market disruption” caused by rising imports from China. Review of the evidence
and presidential decision on remedy are expedited by comparison with a regular
safeguard action. Unlike a regular safeguard case, remedies apply only to imports
from China, not to all imports, and China is authorized to retaliate against equivalent
amounts of U.S. exports within two to three years, depending on the basis of the U.S.
finding.102
On August 2, 2005, seven domestic steel pipe and tube manufacturers and the
USWA filed a petition under Section 421. They alleged market disruption from
rapidly rising imports of standard pipe (circular welded non-alloy steel pipe) from
China. In filing the petition, they noted a surge in imports from China, from less than
10,000 tons in 2002, to 90,000 tons in 2003, 266,000 tons in 2004, and 182,000 tons
98 AMM, “U.S. Wire Rod Makers Rap Imports from 3 Nations” (Nov. 14, 2005), p. 1.
99 AMM, “He Said, She Said as Rod Case Commences” (Dec. 5, 2005 print ed.), p. 2.
100 USITC. News release 05-152, “ITC Votes to End Cases on Carbon and Certain Alloy
Steel Wire Rod from China, Germany and Turkey,” Investigation nos. 731-TA-1099-1101
(Dec. 23, 2005); DER, “ITC Finds No Injury from Imports of Wire Rod from China,
Germany, Turkey” (Dec. 28, 2005), p. A-15; AMM, “ITC Finds No Import Injury, Rejects
Steel Wire Rod Case” (Dec. 28, 2005, p. 1.
101 19 U.S.C. ¶451.
102 For details, see CRS Report RL32371, Trade Remedies: A Primer, by Vivian C. Jones.

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in the first half of 2005. “In spite of strong market demand, the import surge has
forced us to lay off a quarter of our employees,” said the president of Wheatland
Tube, one of the petitioning companies. Overall, petitioners said 2,500 workers in
the industry were threatened by the rise in imports from China. The petitioners
requested an annual quota of 90,000 tons on the subject imports.103
On October 3, 2005, a divided ITC found that standard steel pipe imports from
China were causing, or threatened to cause, market disruption in the United States.
The determination came on a 4-2 vote. Among those voting affirmatively, the
remedy recommendations differed. Two commissioners found for market disruption
and wanted a three-year quota of 160,000 tons per year. Two other commissioners
found that increased imports were only threatening market disruption, and therefore
proposed a more lenient tariff rate quota: a 25% tariff on all imports from China
above 267,000 tons in the first year. The quota would rise proportionally in the
subsequent two years. The remaining two commissioners dissented from the injury
findings. They noted rising prices and profits in the industry following tight supply
conditions in 2004. They found that prices fell in 2005, not because of increased
imports, but because of the working off of overstocked inventories.104
Representatives of the USWA and U.S. pipe manufacturers lobbied the Bush
Administration to grant relief after the announcement of the ITC finding. They were
joined by some Members of Congress. Twenty Senators and 61 Representatives
reportedly endorsed letters urging President Bush to grant quota relief.105
But on December 30, 2005, President Bush refused to provide any trade relief.
He made this decision on two grounds. First, it was noted that the ITC record
showed that “more than 50” third countries supplied pipe to the U.S. market.
Applying a quota to Chinese imports under Section 421 would likely be
“ineffective,” the Administration argued, as many other countries could fill the
subsequent import void. Secondly, the Administration stated that, “According to ITC
estimates,” the costs of import relief to U.S. consumers would be four to five times
greater than the benefits gained by domestic producers (depending on which ITC
remedy was used). Therefore, the President decided that relief was not in the national
economic interest.106
As might be expected, the domestic steel industry was critical of the presidential
decision not to take any action. At least one pipe mill has closed since the decision
was announced, reportedly because of the pressures of increasing domestic costs and
103 AMM, “US Producers Seek Relief from Chinese Pipe Imports” (Aug. 3, 2005), p. 1.
104 USITC. Circular Welded Non-alloy Steel Pipe from China, Investigation no. TA-421-6
(Publ. 3807, Oct. 2005).
105 AMM, “Politicians Back Plea for Relief vs. China Pipe” (Dec. 2, 2005), p. 1.
106 President George W. Bush. Memorandum on “Presidential Determination on Imports of
Circular Welded Non-Alloy Steel Pipe from the People’s Republic of China” (Pres.
Determination no. 2006-7), Dec. 30, 2005.

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direct competition with imports from China.107 On the other hand, the American
Institute for International Steel, representing importers, and the Chinese government
both voiced support for the decision. An official statement of the Chinese Ministry
of Commerce noted that this was the fourth consecutive time that President Bush had
declined to provide relief under this section of the trade law, and that this policy “will
benefit the health and steady development of the two countries’ trading
relationship.”108
For its part, the Bush Administration has indicated that while it perceives
problems with China in trade, especially regarding Chinese steel exports, it may
prefer to deal with this issue systematically, rather in piecemeal trade cases. During
a trip to China just one week before the steel pipe decision, Under Secretary of
Commerce for International Trade Franklin Lavin was quoted as saying that the U.S.
government would like to start bilateral talks on the steel industry through the
auspices of the U.S.-China Joint Commission on Commerce and Trade, operated on
the U.S. side in the office of the U.S. Trade Representative. “We’d like to have some
discussion on [such] issues and not simply wait until one side files a trade remedy
action,” Lavin said.109 This CRS report reviewed above the U.S. positions at the first
session of this U.S.-China Steel Dialogue.
WTO Decision on “Zeroing” and Proposed U.S. Trade Law
Changes
On April 18, 2006, the WTO Appellate Body ruled that the “zeroing”
methodology used by the U.S. Commerce Department in calculating antidumping
margins violates WTO rules. “Zeroing” is a mathematical technique applied to
imported products being investigated in AD cases and administrative reviews (such
as five-year “sunset” cases). In calculating AD duties, which by WTO rules must be
no more than the actual dumping margin, U.S. practice is to ignore cases where no
dumping is found (i.e., to apply a zero margin in that case). The Appellate Body
found that this results in a higher applied duty, because no credit is given for subject
imports priced above fair market value in a comparison of like products. The
Appellate Body’s interpretation is that the WTO antidumping agreement requires that
full weight must be given to “negative dumping margins.” The April decision, in a
case brought against the United States by the EU, applied this principle for the first
time to administrative reviews as well as well initial investigations.110
107 AMM, “The Pressure Is Building in Pipe and Tube” (Jun. 5, 2006 print ed.), pp. 4-5.
108 Ibid., “President Says No to ‘421’ Help vs. China Pipe” (Jan. 2, 2006), p. 1; “China Sees
Rejection of ‘421’ Plea Forging Ties” (Jan. 4, 2006), p. 6; “The Oval Office Bats 4-0 on
China Trade, But Critics See Only the Zero” (Jan. 9, 2006), p. 9.
109 Wall St. Journal, “U.S. Hopes to Avoid Steel-Import Battle with China” (Dec. 23, 2005).
110 Inside US Trade, “Appellate Body Rules Against Zeroing in Administrative Reviews”
(April 21, 2006). For the EU reaction see European Commission, “EU Welcomes WTO
Ruling on US Anti-Dumping Violations,” press release (Apr. 18, 2006).

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U.S. courts have ruled that zeroing is allowed but not required by U.S.
antidumping law.111 In a letter submitted by U.S. Steel on a proposal by Commerce
to alter margin calculations in response to earlier WTO rulings, the company’s legal
representatives argued that additional provisions of U.S. statutory law other than
those considered by the courts effectively require the application of zeroing without
applying offsets for non-dumped products. As demonstrated in the letter, elimination
of zeroing would generally and systematically reduce AD margins.112
Dissatisfaction with the impact of evolving pattern of WTO discipline on U.S.
trade law, including the series of decisions that have narrowed and possibly
eliminated the practice of zeroing is one of the issues addressed in two trade reform
bills. H.R. 5043 was introduced on March 29, 2006, by Representative Benjamin
Cardin, with two co-sponsors, and HR. 5529, introduced on June 6, 2006 by
Representative Philip English, also with two co-sponsors. Both bills propose wide-
ranging changes to U.S. trade law, with the support of U.S. steel and other metals
producers’ associations, and opposition from representatives of some steel-
consuming interests.113
Both bills would establish a commission to review all WTO decisions adverse
to the United States to determine whether the WTO exceeded authority granted under
U.S. law, when Congress approved U.S. participation. After three affirmative
findings, H.R. 5529 would instruct the U.S. Trade Representative to report back to
Congress on efforts to seek appropriate reforms of the organization. Both bills would
also require that U.S. private sector representatives be allowed to participate WTO
panels discussing cases relevant to their interests. They would also amend domestic
trade law in a number of ways advantageous to domestic steel producers. Captive
production (for example, semi-finished slabs at domestic integrated mills) would be
excluded from calculations of import market share in AD/CVD cases. The ITC
would be prevented from considering that imports had no impact on market prices
because of low volumes. Safeguard rules would be changed to eliminate any
reference to imports being a “substantial” cause of injury (not less than any other
cause in present law). In H.R. 5529 Congress, and not the President, would be given
the final authority to revoke a country’s nonmarket economy status for trade cases.
Also in H.R. 5529, the steel monitoring and licensing process, maintained by
President Bush after revocation of the steel safeguard measures, would be made
permanent and applied to the full range of steel products. H.R. 5043 and H.R. 5529
were referred to the Ways and Means Committee, and H.R. 5529 was additionally
referred to the Rules Committee.
111 CRS Report RL32014, WTO Dispute Settlement: Status of U.S. Compliance in Pending
Cases, by Jeanne J. Grimmett, pp. 51-52.
112 Letter of John J. Mangan et al.on behalf of U.S. Steel Corp. to Assistant Secretary of
Commerce David Spooner (April 5, 2006).
113 AMM, “Cheers, Jeers for ‘Kitchen Sink’ Trade Bill” (Apr. 3, 2006 print ed.), p. 2; and,
“English Offers Up Sweeping ‘Wish List’ of Trade Law Reforms” (Jun. 5, 2006 print ed.),
p. 2.

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Legislation to Give Consumers Standing in Trade Cases
As noted above, many companies in a variety of steel-consuming have been
adversely affected by the overall rise in steel prices since 2003. In the first session
of the 109th Congress, Representative Joseph Knollenberg introduced H.Res. 84,
which stated that the Department of Commerce and the ITC, in conducting sunset
reviews of AD/CVD cases, should “take into account and report on, the impact of
such duties on steel-consuming manufacturers and the overall economy,” and gained
48 cosponsors. In introducing the resolution, Representative Knollenberg stated that
Commerce and the ITC “have the discretion to take into account the impact of these
duties on steel consumers, and they should. But traditionally they have not ...
Removing some specific duties will not harm domestic steel producers, who are
doing quite well.”114
His resolution was supported by organizations that had also called for an early
end to President Bush’s steel safeguard tariffs. The steel industry is reportedly against
giving formal standing to steel consumers in trade cases. Its representatives believe
that the resolution would substantively change antidumping law, in which the goal
is to determine if material damage was caused to the petitioning industry.115
On November 3, 2005, Representative Knollenberg introduced H.R. 4217,
which would amend U.S. AD/CVD law to require that the ITC should take into
account the harm to industrial users that may result from imposition of trade
remedies sought by a domestic producing industry. This bill gained 50 cosponsors
by mid-2006. Both items have been referred to the Ways and Means Committee,
where there has been no further action.
114 Congressional Record (Feb. 10, 2005), E16.
115 MEMA press release, “Auto Suppliers Applaud Congressional Resolution on Steel
Hearings” (Feb. 10, 2005); AMM, “MEMA Takes Shot at Steel’s Profits, Wants Duties
Nixed” (Feb. 17, 2005), p. 4.

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