ANNUAL REPORT

111
Figure 6: U.S. Steel Industry Quarterly Net Income, Q1 2009–Q2 2016
Note: Data include financials of AK Steel, Carpenter Technology, Commercial Metals Company,
Nucor, Steel Dynamics, and U.S. Steel.
Source: U.S. Department of Commerce, International Trade Administration, Steel Industry Executive
Summary: September 2016, September 2016.
To offset Chinese companies’ unfair practices, the United States
began imposing some heavy tariffs on Chinese subsidized industries
in March 2007.* 172 In June 2016, the U.S. International
Trade Commission approved an increase for duties on Chinese coldrolled
steel, which will now reach more than 500 percent—consisting
of a 266 percent AD duty and a 266 percent CVD—in response
to dumped and subsidized steel from China. 173
Along with reduced profits and mass layoffs at U.S. steel factories,
the influx of Chinese steel poses national security risks to
the United States. Over the past 30 years, as U.S. steel manufacturing
jobs have been eliminated or moved abroad where manufacturing
costs are lower, the United States’ critically important defense
industrial base has been dramatically reduced. 174 According
to Aaron Friedberg, a professor of politics and international affairs
at Princeton University, a hollowing out of the U.S. industrial base
could become disastrous if the United States is unable to prepare
for a protracted conflict. 175 The Specialty Metals Clause (10 U.S.
Code § 2533b) currently prevents products like steel armor plate (a
critical component for producing and maintaining ground combat
vehicles, ships, and submarines) from being melted abroad and imported
for military use. 176 However, Brigadier General John
Adams, U.S. Army (Ret.) warns that if the U.S. steel industry is
hollowed out, U.S. manufacturers of military equipment and ma-
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* Under Title VII of the Tariff Act of 1930, a sufficient percentage of U.S. domestic production
for a given industry must support a trade case in order for the Department of Commerce to
initiate proceedings. However, increasing investment by Chinese state-owned and controlled enterprises
in the United States could reach levels that limit the ability of cases to proceed if the
domestic subsidiaries choose to oppose action. Tariff Act of 1930, Pub. L. No. 103–465, 1930,
codified at 19 U.S.C. § 1677(18).
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