The distance between Seoul, South Korea, and Lorain is some 6,700 miles, but South Korean trade practices hit close to home.
The 108 layoffs at U.S. Steel’s Lorain Tubular Operations in February were partially blamed on South Korea allegedly “dumping” steel on U.S. markets. Dumping refers to foreign nations subsidizing domestic industries such as steel. This allows the companies to export steel at artificially low prices that U.S. companies can’t compete with.
“American steelworkers are among the most talented in the world,” U.S. Sen. Sherrod Brown, D-Cleveland, said in a Tuesday news release after meeting with U.S. Steel CEO Mario Longhi and United Steelworkers President Leo Gerard in Washington D.C. “But in order for the industry to compete, our companies and workers must be given a level playing field. We cannot stand by while countries like South Korea unfairly dumping steel in the U.S. market, putting American jobs in jeopardy.”
Brown, co-chairman of the Senate Steel Caucus, called on the U.S. Department of Commerce to impose tariffs on South Korea. In February, the department imposed tariffs on eight countries but didn’t include South Korea. A final decision is expected by August, according to a department news release.
With the layoffs, Lorain Tubular employs 586 unionized workers and 105 managers, according to Sara Cassella, a U.S. Steel spokeswoman. Cassella wouldn’t say if or when the workers will be recalled. Tom McDermott, United Steelworkers Local 1104 president pro-tem, didn’t return calls.
Besides lost jobs, trade practices can also mean less local revenue. U.S. Steel is one of Lorain’s largest employers. It paid about $1.7 million in taxes in 2012 and is expected to pay more than $2 million in taxes for 2013, according to Mayor Chase Ritenauer. Ritenauer said in a Tuesday email that he supported Brown’s call for tariffs.
U.S. Steel, which employs 24,000 workers nationally, is one of the companies that filed a complaint with the department. “The evidence in this case clearly shows (steel) products are being illegally dumped in what remains the most open and attractive market in the world at prices below fair value and in ways designed to circumvent our trade laws,” Longhi said in a news release.
The criticism comes near the two-year anniversary on March 15 of the U.S.-Korea Free Trade Agreement. The Obama administration said the agreement has increased U.S. exports of manufactured goods like cars to South Korea which helps the steel industry.
However, Brown and free trade critics like Lori Wallach, Public Citizen’s Global Trade Watch director, say the numbers are being distorted. Brown, in a March 12 letter to Ambassador Michael Froman, U.S. trade representative, said South Korea exported 752,675 cars to the U.S. in 2013.
The U.S. exported 27,353 to South Korea. “It is critical we address any unfair trade practices quickly,” Brown wrote.
Wallach said in an interview that the U.S. exported just 3,400 more Cadillacs, Chryslers and Fords to South Korea between 2011 and 2013 while getting inundated with imports.
“We’re getting rid of existing jobs with the flooded imports in automobiles and auto parts and we’re not getting new jobs by increasing our exports in a really measurable way,” she said. “It really is the worst double whammy.”
The Office of the U.S. Trade Representative in a March 12 news release said South Koreans are, “buying more U.S. services than ever” and U.S. exports of services between 2011 and 2013 increased 18.5 percent, worth $19.4 billion.
However, Wallach said U.S. International Trade Commission data show the U.S. has lost between 48,000 and 60,000 jobs — including steel jobs — since the agreement. “The Korean FTA has been nothing but bad news for American workers,” she said.