Liz Watson Statement on Steel and Aluminum Tariffs

Free and fair trade is essential to our economy here in Indiana. When American workers compete on a level international playing field, no one can beat them.  But for too long, we have failed to adequately enforce our existing trade laws, and to negotiate trade deals that reflect the interests of domestic labor force, not just multinational corporations and the top one percent.  Targeted tariffs can be part of the solution.  

I support our government’s targeted action in response to unfair competition in the steel and aluminum markets.  This action follows the Commerce Department’s “232” investigation into the impact of steel imports on national security, which found that China has been driving down the price of steel through deliberate dumping. This action has bipartisan support in Congress.  And it is critical to Indiana, which leads the nation in steel production.

Let’s be clear about what’s happening here. These aren’t “free markets.”  They are broken markets.  The Chinese government owns the country’s biggest steel companies.  It is not reacting to market forces.  It is dumping steel at prices below its costs to destroy competition, and ultimately to dominate the world market. Action to combat predatory and unfair trade practices in the steel and aluminum industry is long overdue. Steel imports rose nearly 22 percent in 2017, even though there is an excess of steel production. Dozens of U.S. steel and aluminum factories have closed in the last few years because they cannot compete with China’s below-cost pricing, even though worldwide demand has been rising.

When other countries cheat, there must be consequences.  And integrated action is essential, because even as we act against one country, other countries, including Iran, Ukraine and Russia, will step in with more dumping.

Domestic steel is essential to our national security.  Currently, we only have one American steelmaker capable of producing the steel we need for submarines, and only one company that can make the steel we need for our electrical grid.  We only have one smelter that can make the kind of aluminum we need to build fighter jets, including the F-35.  We cannot rely on China or any other foreign country for these crucial needs.

These tariffs must be temporary and targeted toward countries that have engaged in predatory practices, including China and Russia, who have been flooding the market, and proportional to their action in specific markets.  We must be careful not to penalize Canada, with whom we have integrated manufacturing markets, and who is also an importer of about half of U.S. steel exports. 

We can have free and fair trade and good wages and working conditions for American workers.  It is not an either/or proposition.  Germany has excellent worker conditions, the right to organize, health care and wages, and consistently runs a trade surplus, because it supports its manufacturing sector.  Giving our workers their fair share is possible if our leadership stands behind workers and fights back against unfair trade practices and for fair trade agreements.