The American Iron and Steel Institute (AISI) reported that the bill introduced Wednesday known as the "Currency Reform for Fair Trade Act" passed the US House of Representatives with overwhelming support in the 111th Congress and also has 234 bipartisan cosponsors in the 112th Congress. The legislation gives US manufacturers the ability to use the existing countervailing duty law to obtain a remedy for injury caused by goods benefiting from a currency manipulation export subsidy. The AISI voiced its support for the bill in a press release Wednesday.
"Currency manipulation to gain an unfair competitive advantage is among the most destructive trade-distorting practices used today," said Thomas J. Gibson, president and CEO of AISI. "While China has been the largest offender, in today's weak global economy an increasing number of governments are manipulating their currencies to insulate their domestic producers. This is devastating to US domestic manufacturers - especially the steel industry -- and is contributing to the nation's inability to fully recover from the recession."
Gibson said China continues to provide massive subsidies to its steel industry, in addition to manipulating its currency, allowing it to build export-oriented capacity far in excess of its home market demand. In 2012, China's steel capacity reached 970 million tons, which was 250 million tons beyond Chinese demand.
