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Leo W Gerard: NAFTA Negotiators Send Corporate Whiners Back to Swamp

Photo by Gerenme on Getty Images

Giant corporations, loyal to coin and faithless to country, staged a public display of blubbering in the run up to this week’s fourth round of negotiations to revise the North American Free Trade Agreement (NAFTA).

Whaa, whaaa, whaaaa, groups like the U.S. Chamber of Commerce sniveled into the swamp from which they crawled to conduct their press conferences. President Trump isn’t doing what corporations want, they wailed.

The President’s trade priorities, which he repeatedly stated on the campaign trail, do not include groveling to the whims and whining of corporations or their toady, the U.S. Chamber of Commerce. President Trump said he would create good, American jobs. To do that, he wants more stuff made in America and less stuff made in factories off-shored by greed-motivated American corporations.

“We’ve reached a critical moment,” Chamber of Commerce President Thomas Donohue sobbed this week. “The Chamber has had no choice but to ring the alarm bells.”

He said it, by the way, from Mexico City, where the Chamber, which calls itself the U.S. Chamber, had gone to scheme with Mexican government officials to subvert the NAFTA negotiation goals of the U.S. government.

Chamber Vice President John G. Murphy, meanwhile, was carping from the place the President calls the swamp, “So we’re urging the administration to recalibrate its approach and stop and listen to the business community, the agriculture community, the people who actually engage in trade.”

That is the crux of it, right there. The president had failed to place corporate profits over American workers.

Really, what Murphy and Donohue were saying is that the President should ignore the hundreds of thousands of Americans who lost their jobs because of NAFTA and concentrate instead on the profits to be made by wealthy CEOs and shareholders. Those are the guys who uprooted American factories and transplanted them in Mexico, where corporations can more easily exploit both workers and the environment.

United Technologies (UT) is a good example. UT had two perfectly profitable factories in Indiana where American workers manufactured Carrier gas furnaces and electronic controls. UT decided, however, that it could make even more money if it moved the factories to Monterrey, Mexico.

After Vice President Mike Pence, then governor of Indiana, handed UT $7 million of the state’s tax dollars, the corporation agreed to keep some of the Carrier jobs in the United States, but in the end, it moved all 700 electronic controls jobs to Mexico and 632 of the furnace jobs.

In Mexico, UT can pay its new workers a dime for every dollar in wages earned by its skilled American workers in Indiana. U.S. corporations like UT that transplant factories and kick their American workers to the curb pocket the difference in wages.

NAFTA, which encourages this kind of move, doesn’t benefit Mexican workers either. The poverty rate in Mexico is 52.3 percent, virtually the same as it was in 1994, when NAFTA took effect. Wages there rose just 2.3 percent. Economic development in Mexico has fallen behind that of most other Latin American countries.

But, whaa, whaaa, whaaaa, the Chamber of Commerce cries about the President’s intention to keep his campaign promise to build a trade wall to stop corporations from sneaking across the border.

Emily Davis, a spokesperson for the Office of the U.S. Trade Representative, gave the Chamber a good smack upside the head after Donohue and Murphy told the President that he should stop listening to workers and do exactly what the Chamber and corporations tell him to do.

Here’s what Davis said: “The president has been clear that NAFTA has been a disaster for many Americans, and achieving his objectives requires substantial change. These changes, of course, will be opposed by entrenched Washington lobbyists and trade associations. We have always understood that draining the swamp would be controversial in Washington.”

The Wall Street Journal explained the problem for the likes of Donohue and Murphy. The newspaper quoted an outside trade adviser to the administration. He said that the administration wants to “create more uncertainty and reluctance for U.S. businesses to invest in Mexico. . . They want to change the decision making around outsourcing and the offshoring of investment.”

The U.S. negotiators, for example, want to weaken, or maybe even eliminate, the NAFTA-created Investor State Dispute Settlement (ISDS) system. Corporations love this thing. It’s a secret court presided over by corporate lawyers where corporations can sue countries for passing laws that CEOs claim take a bite out of profits.

So, for example, a corporation could claim that a U.S. safety regulation prohibiting a cancer-causing chemical in plastic baby bottles diminishes expected future profits from its Mexican chemical factory. The corporate lawyers acting as judges in the secret NAFTA court can order the United States to compensate the corporation.  And, to top it off, the amount that the secret court can order taxpayers to hand over to corporations is unlimited.

The secret court reduces risk for corporations moving American factories to Mexico, where they might not have the same confidence that they would in American courts to protect their property rights.

Eliminating or curbing the secret court would reverse one of the NAFTA incentives for corporations to transfer manufacturing to Mexico. The administration wants to change several other aspects of NAFTA for the same result.

For example, it wants the government to be able to insist that more of what it buys be made in the United States. That would mean U.S. tax dollars would create more jobs in the United States. That discourages offshoring because the government is a super consumer.

The administration also wants a higher percentage of a product, such as a car, to be made in the United States, or at least in one of the three partner countries, for it to attain NAFTA duty-free status.  Right now, it’s 62.5 percent. The administration is talking about 85 percent, which would deter offshoring to Asian countries.

The administration is also demanding labor rights for Mexican workers. Enabling them to form real, worker-run labor unions would raise their wages, and, as a result, make transplanting U.S. factories in Mexico less profitable.

Murphy told the administration that it should do none of this. It should, he said, follow the administration’s own guidelines and “do no harm.”

Basically, big corporations and the Chamber want no change to NAFTA. They’re fine with all harm falling on U.S. workers’ shoulders ­ – 800,000 of whom lost their jobs because of NAFTA. And that doesn’t include the 1,600 lost at Rexnord and the two United Technologies factories in Indiana this year.

President Trump isn’t fine with that outcome, however. And that’s why his spokesperson at the Office of U.S. Trade Representative told the Chamber this week to waddle back down to the swamp and shut up.

Leo W Gerard: Unfair Trade, Uncertainty Killing American Aluminum and Steel

Kameen Thompson, president of the USW local union at ArcelorMittal’s Conshohocken mill

Kameen Thompson started his workday Sept. 15 thinking that his employer, ArcelorMittal in Conshohocken, Pa., the largest supplier of armored plate to the U.S. military, might hire some workers to reduce a recent spate of overtime.

Just hours later, though, he discovered the absolute opposite was true.

ArcelorMittal announced that, within a year, it would idle the mill that stretches half a mile along the Schuylkill River. Company officials broke the bad news to Kameen, president of the United Steelworkers (USW) local union at Conshohocken, and Ron Davis, the grievance chair, at a meeting where the two union officers had hoped to hear about hiring.

ArcelorMittal wouldn’t say when it would begin the layoffs or how many workers would lose their jobs or which mill departments would go dark. The worst part for everyone now is the uncertainty, Kameen told me last week.

“If ArcelorMittal said they would shut down on a date certain, everybody could move on to something else or prepare. Right now, we are in limbo. We have a lot of guys with a lot of time, but they’re still not old enough to retire. The only thing we can do is ride it out. But the uncertainty is very, very hard on them. It’s difficult not knowing who and what departments are affected and how long we are going to run,” Kameen said.

Uncertainty from Washington, D.C., is a major contributor to the idling of the plant. ArcelorMittal and every other aluminum and steel producer in America are in limbo as they wait for a decision on import restrictions that could preserve U.S. capacity to produce defense materials – like the light armored plate that’s Conshohocken’s specialty ­– and to build and repair crucial infrastructure, like roads, bridges and utilities.

Initially, the Trump administration promised a determination in June. But June came and went. As the months dragged on, imports surged. That threatens the viability of mills like Conshohocken. Then, just last week, administration officials said they would do nothing until after Congress passes tax legislation.That compounded uncertainty.

The Conshohocken mill may not survive the delay. Kameen, Ron and the 203 other workers there could lose their jobs because Congress dawdles or fails to act on taxes. America could lose its domestic capacity to quickly produce large quantities of high-quality light-gauge plate for armor.

After work at other, non-union jobs, Kameen began at Conshohocken at the age of 25. He finally had a position that provided good wages and benefits. “That gave me an opportunity to plan for a future and build a family,” he explained.

Ron, the mill’s training coordinator, is 45 and has worked at the plant for 22 years. “This was my first true job that I could sustain a family with,” Ron told me.

He has five children ranging in age from five to 26. He needs a good job with good benefits. He knows jobs like the one he has at the mill are rare, but he’s not giving in to gloominess. “I am just trying to stay positive,” he said. “That is all I can do right now.”

Photo is of Ron Davis, grievance chair for the USW local union at ArcelorMittal’s Conshohocken mill

Both Ron and Kameen are frustrated by the Trump administration’s failure to penalize the foreign producers whose illegal trade practices have killed steel and aluminum jobs, closed mills across the country and threatened America’s domestic capability to produce metals essential to construction of critical infrastructure and vital to the defense department to safeguard the country.

Since the Trump administration launched the national security probes into steel and aluminum imports under Section 232 of the Trade Expansion Act in April, imports have risen significantly. Steel imports are up 21 percent over last year. Countries like China, fearing impending penalties for predatory and illegal trade practices, dumped more than ever.

The administration has nine months to complete the Section 232 investigation. It could be January before the results are announced. Then the president has another three months to decide what to do. Instead of the two months the administration initially promised, the whole process could take a year.

A year could be too long for mills like Conshohocken.

“It doesn’t take that long to investigate this,” Kameen said. “We are losing jobs. They are dropping like flies. The administration needs to act now to prevent these unfair imports from killing more American jobs.”

Because of unfair and illegal imports since 2000, particularly from China, U.S. steel mills idled sections or closed, cutting the nation’s capacity to produce by 17 million tons a year and throwing 48,000 steelworkers out of jobs.

Now, there is only one surviving U.S. mill capable of producing grain-oriented electrical steel (GOES)required for electrical transmission.

The same decline occurred in aluminum, only it happened even faster. The number of U.S. smelters dropped from 14 in 2011 to five last year. That is the loss of thousands more good, family-supporting jobs. It happened because China expanded its overcapacity to produce cheap, state-subsidized aluminum, depressing the global price by 46 percent in just eight years.

Now, there is only one surviving U.S. smelter capable of producing the high-purity aluminum essential to fighter jets like the F-35 and other military vehicles.

While ArcelorMittal may contend that it can manufacture military-grade steel plate at its other U.S. mills, the loss of Conshohocken would mean a dangerous decline in U.S. capacity.

Capacity is crucial in emergencies. An example occurred in 2007 when U.S. military deaths were rising in Iraq and Afghanistan. In response, former Secretary of Defense Robert Gates ordered a 15-fold increase in production of mine-resistant, ambush-protected (MRAP) vehicles. That meant the number produced each month had to rise from 82 to more than 1,100. The Conshohocken plant produced much of the steel needed to achieve the goal.

Without that mill, the nation’s ability to gear up in such an emergency is compromised.  Two weeks ago, 10 retired generals wrote President Trump warning: “America’s increasing reliance on imported steel and aluminum from potentially hostile or uncooperative foreign governments, or via uncertain supply routes, jeopardizes our national security.”

They also said of the Section 232 investigation, “Prompt action is necessary before it is too late.”

When Kameen started at the mill 11 years ago, he felt good about the work. Conshohocken was making a lot of armor for soldiers in Iraq and Afghanistan, and that gave him the sense that he was doing something for his country.

Now, he’s concerned for his local union members, whose average age is 50.

As their president, Kameen, who is only 37, feels responsible to help each of them through the uncertainty and the difficulties ahead. “My members are looking at me for answers and leadership,” he told me. “So if I don’t stay strong and lead, then I’m the wrong man for the job.”

Every steelworker and aluminum worker in America is looking to President Trump for that kind of leadership. Their uncertainty could be relieved if the administration would announce the results of the Section 232 investigation now and act immediately to ensure the United States has the domestic ability to produce essential metals.

Leo W Gerard: Canadian Mounties to the Rescue of American Workers

The Canadian Royal Mounties have offered to ride to the rescue of beleaguered American workers.

It doesn’t sound right. Americans perceive themselves to be the heroes. They are, after all, the country whose intervention won World War II, the country whose symbol, the Statue of Liberty, lifts her lamp to light the way, as the poem at the statue’s base says, for the yearning masses and wretched refuse, for the homeless and tempest-tossed.

America loves the underdog and champions the little guy. The United States is doing that, for example, by demanding in the negotiations to rewrite the North American Free Trade Agreement (NAFTA) that Mexico raise its miserable work standards and wages. Now, though, here comes Canada, the third party in the NAFTA triad, insisting that the United States fortify its workers’ collective bargaining rights. That’s the Mounties to the rescue of downtrodden U.S. workers.

This NAFTA demand from the Great White North arrives amid relentless attacks on labor rights in the United States, declining union membership and stagnant wages. To prevent Mexico’s poverty wages from sucking U.S. factories south of the border, the United States is insisting that Mexico eliminate company-controlled fake labor unions. Similarly, to prevent the United States and Mexico from luring Canadian companies away, Canada is stipulating that the United States eliminate laws that empower corporations and weaken workers.

The most infamous of these laws is referred to, bogusly, as right-to-work. Really, it’s right-to-bankrupt labor unions and right-to-cut workers’ pay. These laws forbid corporations and labor unions from negotiating collective bargaining agreements that require payments in lieu of dues from workers who choose not to join the union. These payments, which are typically less than full dues, cover the costs that unions incur to bargain contracts and pursue worker grievances.

Lawmakers that pass right-to-bankrupt legislation know that federal law requires labor unions to represent everyone in their unit at a workplace, even if those employees don’t join the union and don’t make any payments. These dues-shirkers still get the higher wages and better benefits guaranteed in the labor contract. And they still get the labor union to advocate for them, even hire lawyers for them, if they want to file grievances against the company.

The allure of getting something for nothing, a sham created by right-wing politicians who prostrate themselves to corporations, ultimately can bankrupt unions forced to serve freeloaders. Which is exactly what the right-wingers and corporations want. It’s much easier for corporations to ignore the feeble pleas of individual workers for better pay and safer working conditions than to negotiate with unions that wield the power of concerted action.

Canada is particularly sensitive about America’s right-to-bankrupt laws because they’ve now crept up to the border. Among the handful of states that in recent years joined the right-to-bankrupt gang are Wisconsin and Michigan, both at the doorstep of a highly industrial region in Ontario, Canada.

So now, the governors of Wisconsin and Michigan can whisper in the ears of CEOs, “Come south, and we’ll help you break the unions. Instead of paying union wages, you can take all that money as profit and get yourself even fatter pay packages and bonuses!”

Then those governors will make American workers pay for the move with shocking tax breaks for corporations, like the $3 billion Wisconsin Gov. Scott Walker promised electronics manufacturer Foxconn to locate a factory there. That’s $1 million in tax money for each of the 3,000 jobs that Foxconn said would be the minimum it would create with the $10 billion project.

Right-wing lawmakers like Walker and U.S. CEOs have been union busting for decades. And it’s been successful.  In the heyday of unions in the 1950s and 1960s, nearly 30 percent of all U.S. workers belonged. Wage rates rose as productivity did. And they climbed consistently. Then, one wage-earner could support a middle-class family.

That’s not true anymore. For decades now, as union membership waned, wages stagnated for the middle class and poor, and compensation for CEOs skyrocketed. And this occurred even while productivity rose. By January of 2016, the most recent date for which the statistics are available, union membership had declined to 10.7 percent. The number of workers in unions dropped by nearly a quarter million from the previous year.

This is despite the fact that union workers earn more and are more likely to have pensions and employer-paid health insurance. The median weekly earnings for non-union workers in 2016 was $802. For union members, it was $1,004.

It’s not that labor unions don’t work. It’s that right-wing U.S. politicians are working against them. They pass legislation and regulations that make it hard for unions to represent workers.

It’s very different for unions in Canada. For example, union membership in Canada is growing, not dwindling like in the United States. In Canada, 31.8 percent of workers were represented by union in 2015, up 0.3 percentage points from 2014. That is higher than the all-time peak in the United States.

And it’s because Canadian legislation encourages unionization to counterbalance powerful corporations. In some Canadian provinces, for example, corporations are prohibited from hiring replacements when workers strike; striking workers are permitted to picket the companies that sell to and buy from their employer; labor agreements must contain “successorship” rights requiring a corporation that buys the employer to recognize the union and abide by its labor agreement; and employers must submit to binding arbitration if they fail to come to a first labor agreement with a newly formed union within a specific amount of time.

The second round of negotiations to rewrite NAFTA ended in Mexico this week. The third is scheduled for later this month in Canada. That’s a good opportunity for the northernmost member of the NAFTA triad to showcase its labor laws and explain why they are crucial to defending worker rights and raising wages.

Getting language protecting workers’ union rights into NAFTA is not enough, however. The trade deal must also contain penalties for countries that fail to meet the standards. This could be, for example, border adjustment taxes on exports from recalcitrant countries.

Canada’s nearly 20,000 Royal Canadian Mounted Police only recently filed papers to unionize. That occurred after the Canadian Supreme Court overturned a 1960s era federal law that barred them from organizing.

Canada’s Supreme Court said the law violated the Mounties’ freedom of association, a right guaranteed to Americans in the U.S. Constitution. Now, Canada is riding to the rescue of U.S. and Mexican workers’ freedom of association by demanding the new NAFTA include specific protections for collective bargaining.

Leo W Gerard: Workers Need Better Trade Deals, Not More Talk

President Donald Trump, author of “The Art of the Deal,” said this week that China is giving American workers and companies a crummy one. He promised to do something about it.

This occurred within days of his Commerce Secretary, Wilbur Ross, demanding “fair, free and reciprocal” trade in an op-ed in the Wall Street Journal.

At the same time, Congressional Democrats offered a seven-point plan to give workers what they called “A Better Deal on Trade and Jobs.”

American workers want all of these proposals achieved. They’ve heard this stuff before and supported it then.  That includes ending tax breaks for corporations that offshore jobs – something that never happened. It includes the promise to confront China over its steel and aluminum overcapacity – a pledge followed by delay. Talk is cheap. Jobs are not. The factory anchoring a community’s tax base is not. America’s industrial strength in times of uncertainty is not. All the talk is useless unless workers get some action.

President Trump is expected to announce within days the launch of an investigation into China forcing American corporations to transfer technology to the Asian giant’s companies as a price of doing business there. The technology transfer boosts China’s goal of becoming the leading manufacturer within a decade in high-tech areas such as semiconductors, robots, and artificial intelligence. In addition to seizing American research and know-how, Beijing advantages its technology companies by granting them government cash.

This is the kind of unfair competition that Secretary Ross talks about in his Wall Street Journal op-ed.Under so-called free trade rules, governments aren’t supposed to subsidize industry or demand that foreign investors fork over research.

These kinds of violations, not just with China but with other trading partners as well, have occurred for decades now. And the upshot for American workers is lost jobs and stagnant wages.

More than 5 million American manufacturing jobs disappeared between 1997 and 2014. Most of these vanished, according to the Economic Policy Institute (EPI), because of growing U.S. trade deficits with countries like Mexico and China that had negotiated trade and investment deals with the United States.

The United States’ massive trade deficit with China alone accounted for 3.4 million jobs lost between 2001 and 2015, with 2.6 million of those in manufacturing, according to EPI research.

While offshoring manufacturing has often padded corporate profits, it has suppressed wages in the United States and in trading partner countries like Mexico. United Technologies (UT) is a good example.

UT moved to Mexico this year its Electronic Controls unit, which manufactures microprocessors for heating, ventilation and air conditioning (HVAC) equipment. UT did this even though its 700 American workers had produced consistent profits for UT at a factory in Huntington, Ind. UT also moved a big chunk of its profitable Carrier HVAC manufacturing from Indianapolis to Mexico this year. UT’s stock price rose, so the already-rich who have cash to invest, made out.

They did it on the backs of workers in the United States and Mexico, however. The move to Mexico rendered jobless more than 1,000 skilled American workers. Studies show that if they’re lucky enough to land new employment, the pay will be substantially less.

Mexican workers gained the jobs, but the pay they’re getting is little better than before NAFTA. More than half of Mexicans still live below the poverty line, a figure no different than before NAFTA. The New York Times cited this case: “For 10 years, Jorge Augustín Martínez has driven a forklift for Prolec, a joint venture with General Electric that makes transformers. A father of two, he earns about $100 for a six-day workweek.”

Mexican wages have remained stagnant for a decade.

In the United States, wages have been flat for longer – several decades.

This as corporate profits rise, the stock market skyrockets and CEO pay surges limitlessly.

Trade deals worked great for the already-rich, CEOs and corporations. They’ve crushed workers.

So it’s encouraging that both President Trump and the Democrats are talking about solutions.

The president is right. American corporations shouldn’t have to transfer technology to China to operate there. The United States doesn’t require that of Chinese companies manufacturing here. No such demand was made of Foxconn when it agreed to build a $10 billion factory in Wisconsin last week – though it is true that Wisconsin Republicans plan to force the state’s taxpayers to contribute $3 billion toward the plant, nearly a third of the total cost.

And the Democrats are right about every point in their “Better Deal” plan. Workers need an independent trade cop they can turn to for quick results to combat trade violations before they cost Americans jobs. Corporations like UT and Rexnord should be penalized when they offshore and when they seek government contracts. Corporations that restore jobs to the United States should be rewarded.

So do it. And don’t procrastinate like the administration is doing on its investigation of the national security threat posed to the United States by steel and aluminum overproduction in China. The report in that case originally promised for June 30 now has been indefinitely delayed. Each day’s wait means more American workers without jobs as illegally subsidized, grossly underpriced Chinese steel and aluminum floods the international market.

America’s highly skilled, dedicated steel and aluminum workers perform their jobs faithfully every day with the expectation that their government will enforce international trade regulations. They also expect their government to support their right to join together and collectively bargain for better wages and benefits. As right-wingers have eroded workers’ bargaining rights over the past half century, unions have declined, and with them, workers’ ability to secure raises. This is true in Mexico too, where there are virtually no legitimate, worker-run unions.

Timothy A. Wise, a research fellow at Tufts University, put it this way to the New York Times: “Mexico is seeing exactly the same phenomenon as in the United States. Workers have declining bargaining power on both sides of the border.”

To ensure there are no more crummy trade deals, workers must be at the table when these pacts are negotiated. To get better wages, workers in all the countries involved in these deals – from China to Mexico to the United States – must be able to form real, worker-controlled labor organizations to bargain with corporations.

Leo W Gerard: Don’t Dawdle on Economic and National Security

The future of the American steel and aluminum industries is not a matter for dithering.

Steel worker takes a sample from oven

Each mill and smelter that remains operating is too vital. Each is too crucial to the economic viability of a corporation, a community, and thousands of workers and their families. Each also is too essential to national security, which relies on American-produced metals for critical infrastructure, from bridge construction to the electrical grid, and for munitions, from fighter jets to bullet-proof vests.

There is no more time for waiting. International trade law must be enforced now. Throughout his campaign, Donald Trump pledged his support to workers and these industries. And he followed through by launching within three months of taking office as president special investigations into the effects of steel and aluminum imports on national security. Such inquiries may take as long as a year to conclude, but the administration expedited the process. Until it didn’t. Now steel and aluminum corporations, their communities and their workers are being told to wait. It’s a delay that could kill more American mills and smelters.

The nation lost nine aluminum smelters over the past six years, leaving only five in the entire country, and most of them are now operating at reduced levels. Beginning in January 2015, steel companies laid off 14,000 workers as they closed mills and sections of mills. For example, Allegheny Technologies shuttered a plant that made grain oriented electrical steel in 2016, leaving only one U.S. company, AK Steel, now producing this component critical to electricity transmission.

As mills and smelters disappear, the military is further restricted in its ability to secure domestically produced essential metals in time of crisis.

The primary culprit in this scary scenario is overcapacity and overproduction in China, which overwhelms the world market with illegally subsidized, grossly underpriced aluminum and steel.

China has promised repeatedly to solve this problem. On Thursday it pledged again, this time contending it wanted to work globally to deal with the issue of aluminum overcapacity – a problem Beijing created. Over the past six years, using massive government subsidies, China quickly ramped up capacity to become the largest aluminum producer in the world.

China can’t be trusted on this because it never keeps its promises. It has never cut its steelmaking capacity after announcing again and again that it would. In negotiations last week, Trump cabinet members could not even get a specific commitment out of China to do it. There’s no evidence China will stop overproducing steel or aluminum now. Waiting is useless. And destructive to American manufacturing.

The American steel and aluminum industries have fought back, filing and winning dozens of trade cases against imports of specific products. But the resulting tariffs and other penalties imposed by the U.S. Commerce Department and U.S. International Trade Commission (ITC) didn’t solve the problem. Instead of paying U.S. tariffs, China shipped its government-supported excess of these products to other countries, artificially suppressing world prices and warping what is supposed to be a free market.

Also, this traditional process for seeking relief from unfair trade takes too long. More than a year may elapse before companies and workers get a final decision. And that will be for just one product, like aluminum extrusions, aluminum foil, welded stainless steel pressure pipe or corrosion-resistant steel, to name a tiny number of cases from recent years.

That’s part of what made the special investigations into steel and aluminum imports so attractive. If the U.S. Commerce Department determined under Section 232 of the Trade Expansion Act of 1962 that imports of steel and aluminum jeopardized national security, then the president could impose penalties broadly to ensure the country could meet its own needs. The effort might also spur allies to join the United States in finally pressuring China sufficiently to actually reduce capacity.

Although Section 232 allows for nine months of investigation, after which the President would have three months to determine a remedy, the administration promised quick action when it announced the inquiries in April. The steel report was to be completed by June 30, with a speedy decision by the president after that.

That suggested the administration understood this was urgent.

But June 30 came and went. Now there’s an official delay. The administration told the Wall Street Journal that the steel investigation is on hold until after health care reform, tax changes and infrastructure spending are accomplished.  “We don’t want to do it at this moment,” the president said Tuesday of the steel case.

That’s devastating. Especially because steel imports have jumped 22 percent since Jan. 1, placing additional pressure on the American industry.

The delay occurs as efforts are made by a new company to reopen at least one potline at an aluminum smelter in New Madrid, Mo., that the now-bankrupt Noranda company idled last year. Postponing the Section 232 decision makes for uncertainty for these investors.

It also occurs as a Chinese company is trying to buy Aleris, an Ohio-based manufacturer that supplies aluminum for use in vital infrastructure and military applications. That Asian firm, China Zhongwang, is accused of dodging tariffs and is under civil and criminal investigation for possible smuggling, conspiracy and wire fraud by the Justice Department, Department of Homeland Security and Commerce Department.

Maybe the Aleris smelters would keep operating if China Zhongwang bought them, but at what risk to national security?

The delay occurs as companies that buy steel fear monger that tariffs or quotas would raise prices.

An expert, Stephen Koplan, chairman of the U.S. ITC under Presidents Bill Clinton and George W. Bush, says that’s hogwash. “Predictions of disaster were wrong 15 years ago when I chaired the ITC, and they are wrong again today,” he wrote in an op-ed in The Hill newspaper this week.

When President George W. Bush imposed tariffs and quotas on steel imports under Section 201 of the Trade Act of 1974, there was no price shock afterward, according to a study by the nonpartisan U.S. ITC.  Here is what Koplan, who also served as an attorney at the Small Business Administration, wrote:

“Downstream industries were not devastated by higher steel prices. Nor was the U.S. economy thrown into depression. The U.S. steel industry, however, earned a much-needed relief as the result of action taken by the president that allowed it to restructure and reinvest for the long term. In other words, the Section 201 measures worked as intended.

“We are facing similar challenges again today. . .Now, however, U.S. national security is at great risk if firm action is not taken immediately. The U.S. primary aluminum industry is on the verge of disappearing entirely, and the U.S. steel industry is not far behind.”

AK Steel Corp. CEO Roger Newport agreed with Koplan’s assessment that this is not a time for dawdling, telling the Commerce Department in his testimony on the steel case:

“High-end electrical steel is an incredibly difficult product to manufacture, as it requires a significant amount of dedicated, capital equipment and a sophisticated, well-trained workforce. Therefore, if AK Steel were to exit the market, there would be no operational electrical steel manufacturing equipment in the United States, the specialized labor and related expertise in operations would be lost, and many of AK Steel’s talented operators and researchers would either relocate to other businesses, industries and/or foreign countries, or become unemployed.”

Workers’ and companies’ economic security is at risk. The nation’s security is at risk. Resolution of these cases should be speeded, not delayed.

Leo W Gerard: Subjugation in Steel

Image of USW member at EVRAZ North America by Steven Dietz

One cost of freedom is steel. To remain independent, America must maintain its own vibrant steel industry.

Steel is essential to make munitions, armor plate, aircraft carriers, submarines and fighter jets, as well as the roads and bridges on which these armaments are transported, the electrical grid that powers the factories where they are produced, the municipal water systems that supply manufacturers, even the computers that aid industrial innovation.

If America imports that steel, it becomes a vassal to the producing countries. It would be victim to the whims of countries that certainly don’t have America’s interests in mind when they act. In the case of China, the attempt to subjugate is deliberate. Beijing intentionally overproduces, repeatedly promises to cut back while it actually increases capacity, then exports its excess, state-subsidized steel at below-market costs. This slashes the international price, which, in turn, bankrupts steelmakers in the United States, Canada, Great Britain, Spain and elsewhere. Then, China dominates.

To his credit, President Donald Trump has said America can’t be great without the ability to make its own steel. He ordered the Commerce Department to investigate the extent to which steel imports threaten national security. Commerce officials are scheduled to brief Senate committees on the inquiry today. That’s because they’re being second guessed by a handful of federal officials, exporters and corporations whose only concern is profit, not patriotism. To protect national security, American steel and family-supporting jobs, the administration must stand strong against foreign unfair trade in steel that kills American jobs and creates American dependency.

Imports already take more than a quarter of the U.S. steel market. They rose in May by 2.6 percent, seizing a 27 percent market share. That is dangerous. America can’t rely on unfairly traded foreign steel as it tries to expand manufacturing jobs or when it faces foreign threats. Defense needs are the basis of the administration inquiry, called a Section 232 investigation under the Trade Expansion Act of 1962.

National security relies on dependable, modern transportation and utility systems as well as armaments. To produce defense materials, factories need supplies to arrive routinely and electricity to flow consistently. Steel is just as crucial for roads, bridges, airports and utilities as it is for armor plate.

Some importers are pressuring Commerce Secretary Wilbur Ross not to recommend imposing limits or tariffs on steel imports, asserting that the only consideration should be price. They contend that if China, South Korea, Japan and Turkey subsidize their steel production, which lowers the cost of exports, then American builders should benefit – no matter how much that damages national security or destroys steelworkers’ family-supporting jobs. Their preoccupation with profit at their country’s expense should disqualify them from consideration.

To be clear, American steel companies and my union, the United Steelworkers, have tried repeatedly to resolve the problem of trade cheating through normal channels – filing trade enforcement cases against the violators. But the United States has refused to take currency manipulation by countries like China into account. And every time an American company wins an enforcement case against a trade law violator and tariffs are imposed on a particular type of steel import, China and other cheaters begin subsidizing a different type of steel and exporting that.

American companies  have won dozens of cases – welded stainless steel pressure pipe, rebar, line pipe, oil country tubular goods, wire rod, corrosion-resistant steel, hot-rolled steel, cold-rolled steel, cut-to-length plate, grain-oriented electrical steel. But in every case, countries like China and South Korea find a way to circumvent the rulings by subsidizing some new steel product and exporting that or by trans-shipping – sending the product to another country first to make it look like the steel originated there to evade the tariffs.

American steel producers and steelworkers can compete successfully against any counterpart in the world, but they can’t win a contest against a country.

The USW and American producers are looking for a broader solution now, something that will prevent cheating and circumvention across-the-board. And they have good reason to believe they can count on Commerce Secretary Ross. This is a guy who knows the industry and has a track record of saving steel mills and jobs.

At the turn of the century, as recession and the Asian financial crisis pushed more than 30 U.S. steel companies into bankruptcy, Secretary Ross bought a half dozen failing steel firms and restored them to solvency.

Because of his experience, Secretary Ross can be trusted to know the difference between China and Canada. American steelworkers and steel producers aren’t looking for blatant protectionism. American firms and Canadian companies have relationships in which steel from Canton, Ohio, may travel to St. Catherines, Ontario, where it is converted into engine blocks that are then shipped back across the border to Detroit, Mich., for installation in cars. Canada doesn’t illegally subsidize its steel industry or manipulate its currency. Only countries like China, Russia, South Korea and others that flagrantly violate international trade rules should be subject to the Section 232 sanctions.

Secretary Ross experienced the hell of 30 steel bankruptcies. He knows just how bad it can be for workers, companies and the country. With President Trump at his back, Secretary Ross now is key to ensuring American steel doesn’t descend back into that hell and that America remains steel independent.

Leo W Gerard: Trump Offers Fool’s Gold to Fund Infrastructure

Image from USW / Getty

Donald Trump surrounds himself in gold. The signs on Trump buildings shimmer in it. His penthouse in New York is gilded in it.

He claims now to have found the alchemy to conjure $1 trillion in infrastructure gold. He plans to put up a mere $200 billion in federal funds and stir it together with $800 billion in private investment and state dollars.

That is fool’s gold. A falsely-funded infrastructure program is a massive broken promise. America needs real improvements to roads, bridges, schools, hospitals, airports, water systems and railways. That requires a commitment of real tax dollars, not the relinquishment of America’s public assets to profit-seeking private Wall Street entities. Americans should not be charged twice for maintenance of the public good, once through tax breaks to investors and again in outrageous tolls and fees the investors charge.

On Wednesday, standing on the banks of the Ohio River in Cincinnati, Trump reiterated the pledge he made repeatedly on the campaign trail to put $1 trillion into infrastructure. He said “restoring America” is a promise that Washington, D.C., has broken. “It has not been kept, but we are going to keep it,” he said.

“Taxpayers deserve the best results for their investment,” he said, “and I will be sure that is what they get.” But the plan to turn over public assets to private corporations for tax-supported investment is gold only for the 1 percent who can afford to invest.

The Wall Street Journal reported last fall that to raise the private funds, Trump planned to give massive tax breaks of 82 percent of equity to investors that help pay for infrastructure repair. For citizens, that’s a crappy deal – giving Wall Street control over public assets in addition to being forced to fork over the taxes that rich investors will not pay.

That financial alchemy creates poison, not gold.

In addition, there is no profit in many types of infrastructure that need repair, like schools and hospitals. A corporation can’t collect tolls from children entering their elementary school each morning.

Despite Trump’s promise in Cincinnati that he would take care of rural areas, there’s no profit in many crucial infrastructure projects in such regions. Investors won’t pay for a highway needed to connect two isolated towns in West Virginia.

And the profit in some projects is highly questionable. Several corporations that have bought or built toll roads have filed for bankruptcy. This includes highways in Texas, California, Indiana and Alabama.

In other cases, the profits reaped are outrageous. After Chicago sold its 36,000 parking meters to Morgan Stanley, the Wall Street bank doubled the parking rates and charged the city tens of millions annually for meters Chicago took out of service for street repairs, mass transit stops and safety. A city inspector general report on the deal says Chicago under-priced the meters by nearly $1 billion when former Mayor Richard M. Daley signed the 75-year contract in 2008. The bank is expected to make back its $1.15 billion investment by 2020, giving it 60 more years to rake in pure profit on the backs of Chicago taxpayers who paid to install the meters and who feed them daily.

That’s gold for Morgan Stanley, grief for taxpayers.

Another part of Trump’s financing plan is to shift infrastructure costs to states and towns. This also cheats too many citizens. Sure, some places high on the hog like Silicon Valley might be able to afford that. But too many will be left out.

That’s because large numbers of cities and states are facing fiscal crises. Chicago sold its parking meters to fill a budget shortfall. In Oklahoma, where there’s a $900 million budget gap, schools are so underfunded that 96 of the state’s 513 districts have reduced the school week to four days and another 44 may be forced to do that in the fall. The state has shuttered rural hospitals, overcrowded its prisons and limited state troopers to 100 miles of driving a day.

In Kansas, with a $1.1 billion budget deficit, the state Supreme Court just ordered the legislature to properly pay for its schools. The court said Kansas’ under-funding meant inadequate education in basic reading and math for students in one fourth of its public schools. The state shortchanged half of the state’s black students and a third of its Hispanic pupils.

Illinois hasn’t had a budget for two years. The state’s credit rating has been downgraded eight times. It has accrued $14.5 billion in unpaid bills. As a result, more than 1,500 public university and community college workers have been laid off and untold numbers of social service agencies have closed or severely curtailed services.

Other states, including Connecticut, Kentucky, New Jersey and Pennsylvania, face massive pension shortfalls after years of failing to properly pay into the funds.

These places aren’t going to be able to jump up and take on the federal government’s responsibility to invest in infrastructure.

Even the $200 billion that the Trump administration is saying the federal government will provide is in question. It’s in the budget Trump submitted to Congress, but also in that budget is $206 billion in cuts to existing infrastructure programs, including those conducted by the U.S. Department of Transportation and Army Corps of Engineers. That’s the very Corps of Engineers that would pay for the river lock and dam projects that Trump complained Wednesday in Cincinnati were grossly underfunded, causing costly breakdowns.

That kind of budgeting is bad alchemy. That’s not $1 trillion in infrastructure gold.

Trump said Wednesday, “We will build because our people want to build and because we need them to build. We will build because our prosperity demands it. We will build because that is how we make America great again.”

That sounds wonderful. But to build, projects must be properly paid for. And so far, the Trump administration has offered only pyrite.

Leo W Gerard: Workers Want A Green Economy, Not A Black Environment

The BlueGreen Alliance

To justify withdrawing from the Paris climate change accord, President Trump said during his press conference yesterday, “I was elected to represent the city of Pittsburgh, not Paris.”

From terrible experience, Pittsburghers know about pollution.

Before Pittsburgh’s renaissance, the streetlights Downtown frequently glowed at noon to illuminate sidewalks through the darkness of smoke and soot belched from mills. White collar office workers changed grimy shirts midday. To the west 130 miles, the polluted Cuyahoga River in Cleveland burned – several times.

Pollution sickened and killed. It triggered asthma and aggravated emphysema. In Donora, just south of Pittsburgh, an air inversion in 1948 trapped smog in the Monongahela River valley.  Poisonous steel mill and zinc plant emissions mixed with fog and formed a yellow earth-bound cloud so dense that driving was impossible. Within days, 20 people were dead. Within a month, another 50 of the town’s 14,000 residents succumbed.

Some viewed pollution as a blessing, a harbinger of jobs. Air that tasted of sulfur signified paychecks. For most, though, pollution was a curse. It meant scrubbing the grime off stoops daily. It meant children wheezing and gasping for air. It meant early death.

The preventable deaths are why my union, the United Steelworkers (USW), has fought against pollution for decades, long before scientists conclusively linked it to global climate change. That connection made combatting pollution even more urgent. It crystalized our obligation to save the planet for posterity. Signing the Paris Climate Accord last year committed the United States to preserving what we all share, the water and the air, for our children and their children. Donald Trump’s withdrawal from that agreement moves the United States, and the world, back in time to rivers so toxic they burn and air so noxious it poisons. Trump’s retreat makes America deadly again.

Don’t get me wrong. The USW supports job creation. But the union believes clean air pays; clear water provides work. Engineers design smokestack scrubbers, skilled mechanics construct them and still other workers install them. Additional workers install insulation and solar panels. Untold thousands labor to make the steel and other parts for wind turbine blades, towers and nacelles, fabricate the structures and erect them. Withdrawing from the Paris Accord diminishes these jobs and dispatches the innovators and manufacturers of clean technologies overseas where countries that continue to participate in the climate change agreement will nurture and grow them.

Eleven years ago, the USW joined with the Sierra Cub to form the BlueGreen Alliance because USW members believe Americans deserve both a clean environment and good jobs. The USW believes Americans must have both. Or, in the end, they will have neither.

The Alliance, which now includes more than a dozen unions and environmental groups, has collaborated with industry leaders to find solutions to climate change in ways that create high -quality jobs.

It’s an easy sell to many corporate leaders. Shortly after the election last fall, hundreds of companies and investors, including the likes of Nike and Starbucks, signed a letter asking Trump to abandon his campaign rhetoric about withdrawing from the Paris Accord.

In April, more than a dozen Fortune 500 companies, including giants Google, BP and Shell, also wrote Trump urging against reneging on nation’s climate commitment. They said that because the agreement requires action by all countries, it reduces the risk of competitive imbalances for U.S. companies that comply with environmental regulations.

More recently, Apple CEO Tim Cook told Trump that disavowing the accord would injure U.S. business, the economy and the environment. Tesla CEO Elon Musk told Trump that if he turned his back on the accord, Musk would resign from two White House advisory boards.

Secretary of State Rex W. Tillerson, the former CEO of ExxonMobil, also urged Trump to keep the United States’ commitments under the 195-nation pact, rather than joining Syria as an outlier. Syria and Nicaragua are the only non-signatory countries, but Nicaragua declined to sign because its leaders felt the accord was not strong enough.

The streetlights never switch on at noon in Pittsburgh anymore. The Cuyahoga River now supports fish that live only in clean water. Donora’s sole reminder of those dark days in October of 1948 is a Smog Museum.

But the United States remains the world’s second-largest greenhouse gas polluter. It has an obligation to lead the world in combating climate change. Great leaders don’t shirk responsibility.

Leo W Gerard: Trump’s Budget Slashes Opportunity

A few hundred billion cut here, a few hundred billion slashed there, and the Trump budget proposal released this week adds up to real crushed opportunity.

Image From Getty Images

The spending plan slices a pound of flesh from everyone, well, everyone who isn’t a millionaire or billionaire. For the rich, it promises massive tax breaks.

There are cuts to worker safety programs, veterans’ programs, Social Security, Medicaid, Medicare, food stamps, vocational training, public education, environmental protection, health research and more. So much more. The list is shockingly long.

Each incision is painful. But what’s worse is the collective result: the annihilation of opportunity. The rich can buy opportunity. The rest cannot. What was always special about America was its guarantee of opportunity to everyone. All who worked hard and pulled themselves up by their  bootstraps could earn their own picket-fenced home. This budget terminates the goal of opportunity for all. It declares that the people of the United States no longer will help provide boots to those who lost jobs because of NAFTA, the residents of economically depressed regions, the children of single mothers, the sufferers of chronic diseases, the victims of natural disasters. No bootstraps for them. Just for the rich who hire servants to pull the straps on their fancy $1,500 Gucci footwear.

The minimum-wage servant class doesn’t have a prayer under this budget. Trump condemns them to a perpetual prison of poverty. His budget denies them, and even their children, the chance to rise. It treats no better the precarious middle class and workers whose jobs are threatened by imports. It even screws veterans.

Achieving the American Dream depends on a good education, and the Trump budget would extinguish that possibility for tens of millions. The breadth and depth of the cuts to public education are gobsmacking. They’ll enable billionaire Education Secretary Betsy DeVos to use the money instead to subsidize private school tuition for the Gucci class.

While DeVos helps the already-rich attend pricey private schools, she and Trump would cut $345.9 billion from public education, training, employment and social services. That includes $71.5 billion from public elementary, secondary and vocational education. They’d take $11.4  billion from education for disadvantaged children and $13.9 billion from special-needs children.

They’d withdraw $183.3 billion from higher education including $33 billion from financial assistance. They say to kids who failed to be born to wealthy parents – too bad for you, no low-interest student loans for brilliant poor students and far fewer grants for the talented who could cure cancer if only they could afford college tuition.

Many of these aspiring students can’t turn to their parents for help because they’ve lost jobs as manufacturers like Rexnord and Carrier closed American factories and shipped jobs to Mexico or China. Trump and DeVos would also decimate help for the parents to get back on their feet, eliminating $25.2 billion for training and employment.

If the parents’ unemployment insurance runs out as they search for new jobs and their cars are repossessed, mass transit may not be an option for commuting to new positions. Trump would cut it by $41.6 billion.

If a furloughed worker in North Dakota or Minnesota or Pennsylvania can’t afford to pay the heating bill, Trump’s government would no longer help. He would eliminate entirely the Low Income Home Energy Assistance Program, ending aid that can mean the difference between life and freezing to death for 6 million vulnerable Americans.

If laid-off workers ultimately also lose their homes to foreclosure, Trump is unsympathetic. He’d cut $77.2 billion from housing assistance. His advice: take your bootless feet and live in the street.

And don’t expect any government cheese once there. Trump would carve $193.6 billion out of food stamps. He doesn’t even spare infants, with an $11.1 billion smack to the program that feeds pregnant women and their babies. School kids can’t expect food either. Trump and DeVos say too bad for them if they can’t hear their teachers over their growling stomachs. Trump takes nearly 21 percent away from the Agriculture Department, which subsidizes school lunches for low-income kids.

Trump also stiffs families that lose their health insurance because they can’t afford COBRA premiums after a job loss or can’t find new employment before their COBRA eligibility expires. Trump slashes $627 billion from Medicaid, and that’s on top of draconian cuts in his so-called health plan that would cost 14 million Americans their insurance coverage next year and 23 million over 10 years. Trump says: no health care for the down and out.

For the residents of West Virginia glens with closed coal mines, and the citizens of shuttered mill towns in Western Pennsylvania and the in habitants of Michigan municipalities struck down by offshored auto manufacturing jobs, Trump would purge $41.3 billion from the community development program that provides both jobs and otherwise unaffordable crucial municipal improvements.

The unemployed or under-employed who hoped for jobs in Trump’s promised $1 trillion infrastructure program receive no reprieve in this proposed spending plan. It removes $97.2 billion from airports, $123.4 billion from ground transportation and $16.3 billion from water transportation projects.

Trump is mulling sending thousands of new troops to Afghanistan, and for some young people with few options, that service is attractive because it comes with good medical and education benefits. But the Trump budget diminishes that chance at success as well, ripping $154.1 billion from veterans’ services including $94.4 billion from hospital and medical care and $511 million from veterans’ education and training.

For young people who thought the AmeriCorps program might be an employment substitute for the military, no luck. Trump’s spending plan abolishes that service program.

Trump’s $4.1 trillion budget redefines America.  No longer the land of opportunity, it would be a place of welfare for the rich in the form of million-dollar tax breaks and subsidies for exclusive private schools. For the rest, hope would be extinguished. For them, Trump’s budget would convert America the beautiful into America the hellish hole.

Leo W Gerard: Stop China’s Stealth Invasion

A country claiming the greatest military on earth can’t be without some things. Steel is an obvious one.

Image from Getty Images

In the age of drones, aluminum is another. Aluminum is essential for flying machines like the F-35 joint strike fighter and Boeing F/A-18 Super Hornet, for armor plating on army vehicles and naval vessels and for countless infrastructure projects including bridges and roads.

Obviously, then, for the United States to retain top ranking, it must protect its aluminum industry. That industry, though, is under a two-pronged stealth attack from China. For more than a decade, the Chinese have ramped up their own aluminum production and dumped the excess on the world market, depressing prices and bankrupting Western producers. Now, a corrupt Chinese company that is under investigation by three U.S. agencies is trying to buy an American aluminum firm. To ensure national security, that must be stopped. America can’t be beholden to China for aluminum.

In 2000, China produced only 11 percent of the world’s aluminum. Now it’s more than 50 percent. Just between 2010 and 2015, China doubled production, even as demand for aluminum within the country slowed. Chinese companies continued to ramp up because they received massive government subsidies, including cheap power, loans and raw materials. That kept Chinese workers employed but created stockpiles of aluminum. So China exported the excess, overwhelming the world market and driving down prices.

This shattered the U.S. industry. In 2000, 23 aluminum smelters operated in the United States. Now there are only five, with just two at full capacity. Thousands of American aluminum workers lost their good, family-supporting jobs in just the past three years.

Aluminum producers filed formal complaints with the U.S. Department of Commerce about the illegal subsidies and about Chinese companies dumping products in the United States at prices below production costs. And in 2011, the department penalized Chinese extrusion producers, including one called China Zhongwang, with tariffs as high as 374.15 percent.

With that added cost, China Zhongwang’s U.S. sales plunged. Zhongwang, the world’s second-largest producer of aluminum extrusions, then schemed to dodge the sanctions, leading to criminal and civil investigations of possible smuggling, conspiracy and wire fraud. The Justice Department, Department of Homeland Security and Commerce Department are all scrutinizing Zhongwang.

Zhongwang and associates are accused of shipping nearly 1 million tons of aluminum to Mexico with the intent of then sending it across the border tariff-free under the terms of the North American Free Trade Agreement, as if it had been manufactured in Mexico. Shortly after the aluminum trade association discovered this massive stash, amounting to 6 percent of the world’s aluminum inventory, much of it was whisked away to Vietnam, another country notorious for involvement in what is called transshipment, that is, concealing commodities’ country of origin to evade tariffs.

In addition, the U.S. Aluminum Extruders Council accused Zhongwang and companion companies of another plot to skirt tariffs. Firms associated with Liu Zhongtian, a Chinese billionaire who controls Zhongwang, shipped thousands of tons of pallets made of aluminum extrusions to a factory in a Philadelphia suburb.

These “pallets,” which weighed more than three times American-made aluminum pallets, escaped tariffs specific to extrusions because, supposedly, they were pallets. Pallets, typically though, are designed to be light to reduce shipping costs.

Company officials contended the heavyweight pallets made from extrusions were to be sold as pallets, not dismantled or melted for other uses. Shortly after the Wall Street Journal began asking questions about them, though, they disappeared. Just like the $2 billion worth of aluminum in Mexico.

The Commerce Department wasn’t fooled by this sleight of hand. In November, it announced that the pallets were an attempt to circumvent the 2011 tariffs on extrusions.

Even while Zhongwang remains under investigation, it announced plans to buy American aluminum company Aleris for $2.3 billion from a private equity firm. Aleris, with 14 plants around the world, makes rolled aluminum for a variety of industries, including aerospace and automotive, and significantly, armor plate for the U.S. military.

The U.S. military cannot be dependent on a Chinese-owned company to outfit American armored vehicles or meet other critical needs. In November, a dozen U.S. senators asked Obama’s treasury secretary to block the deal because it would “directly undermine our national security, including by jeopardizing the U.S. manufacturing base for sensitive technologies.” My union, the United Steelworkers (USW), which has 950 members employed at Aleris, also has repeatedly protested the proposed sale, including in a letter sent last week to new Treasury Secretary Steven Mnuchin.

It would be far too easy for Zhongwang to appropriate Aleris’ trade secrets, then run the company into the ground, further cementing China’s illegally-subsidized domination of the world aluminum market. Zhongwang could also exploit Aleris operations to circumvent U.S. tariffs. Based on past performance, that would be no surprise.

The U.S. government has taken important steps toward protecting the crucial American aluminum industry. Before he left office in January, former President Obama launched a formal complaint with the World Trade Organization against the Chinese government over its subsidies to the aluminum industry.

In March, the Commerce Department began investigating complaints that Beijing illegally subsidized aluminum foil shipped to the United States by 230 Chinese companies.

Last month, the Trump administration initiated an inquiry into the effect of aluminum imports on U.S. national security, which could lead to tariffs or import restrictions. But it’s not Canada or some other allied country causing the problem. It’s China.

And just last week, the Senate confirmed Robert Lighthizer as U.S. trade representative. He has railed against America’s comatose response to abusive Chinese trade practices that have bankrupted American industries and killed American jobs. That includes dirty tricks like creating pallets out of extrusions and transshipping from Mexico and Vietnam.

Lighthizer assured the Senate he intended to firmly enforce trade law. That’s good because he must stop China’s stealth invasion before it overcomes the entire U.S. aluminum industry.

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