Letters to the Editor

August 27, 2014

Malatek: International trade dispute hitting home in Cayce

International trade disputes in Washington can seem distant, but occasionally one strikes close to home.

International trade disputes in Washington can seem distant, but occasionally one strikes close to home.

I run the 425-employee Commercial Metals Corp. plant in Cayce that makes rebar — steel reinforcement bars used in construction. Our plant is under threat from rebar that is being dumped unfairly by two U.S. allies: Mexico and Turkey.

We need the U.S. Commerce Department to take forceful action to end the practice and impose stiff penalties. And we need our representatives in Washington to help.

We don’t want to return to the layoffs and reduced schedules we saw in the aftermath of the last recession, but that is the danger we face in this trade case. Mexican and Turkish steelmakers are taking advantage of trade barriers, and Turkish steelmakers are using special subsidies, which allow them to sell rebar here at ridiculously low prices — cheaper than what they sell it for at home, despite the extra import cost.

We cannot sustain our operations while slashing prices to match unfairly priced imports. The danger is even greater than it seems, because every steel job supports as many as seven other jobs in related services such as maintenance and transportation. Our charitable giving already has declined. When we hurt, our communities and families do, too.

Together, Turkey and Mexico have tripled their share of the U.S. rebar market in the past three years and now control 20 percent. Unless Commerce acts, this will only get worse.

The Turkish rebar industry is helped by government energy subsidies, export and tax credits and preferential loans that keep its U.S. prices artificially low. The rebar market in Mexico, where there is a 23-to-1 trade imbalance, is essentially closed to U.S. imports.

At the request of five major U.S. steel manufacturers, the Commerce Department and U.S. International Trade Commission investigated the dumping and illegal subsidies. In a preliminary ruling, they found in our favor with Mexico, but they are under strong pressure to reverse that finding. They issued a hand-slap penalty to Turkey.

In its final ruling next month, Commerce needs to stiffen the penalties against Turkey and hold fast on Mexico. Our Cayce plant is one of the finest in the world, but giving foreign competitors unfair advantages is threatening its future.

Dennis Malatek

Cayce

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