The American Iron and Steel Institute is applauding a letter by 50 members of the Congressional Steel Caucus that has been sent to the U.S. Treasury Secretary requesting a close examination of a proposed joint venture between the Chinese company Anshan Iron and Steel Group and U.S.-based Steel Development Co.
In the letter, caucus members expressed concern that Anshan’s investment could “threaten American jobs and our national security.”
In supporting the letter, the AISI concurred that any investment by Anshan, which is owned by the Chinese government, would allow China to use its full economic force to exploit the American steel market.
The letter notes that allowing even partial ownership of the steel mill “enables the Chinese government to direct Anshan to pursue China’s aims” and could “force American steelworkers to compete against a blank check.”
In supporting the letter, Thomas Gibson, president and CEO of the AISI, notes, “China’s strategic plan for its steel industry has been to create massive state-owned and controlled national champion companies like Anshan. These companies operate at the direction of the highest levels of the Chinese government and benefit from massive government subsidies and other trade-distorting policies that give them an unfair advantage in international trade. Given the economic and national security issues raised by a Chinese government investment in a U.S. steel company, this matter certainly deserves very careful and thorough review by the appropriate U.S. authorities.”
In a written statement, a spokesman for Steel Development Co. LLC, says, “Steel Development has a number of investors. As a private company, it is not our practice to share investor names or the level of their investments. However, due to unfounded concern regarding controlling interests in our company, we confirm that Anshan contributed less than 20 percent of the total investment in Steel Development.
“As Steel Development endeavors to finalize the financing necessary to create 1200 construction jobs and 100 permanent jobs in the domestic steel market, it has come under fire for incorporating this investment from Anshan. With Steel Development projecting production of 350,000 tons of rebar per year in a 120 million ton steel market (less than three tenths of percent), the promotion of national security fears due to the Anshan investment is, at best, difficult to rationalize.
“Notwithstanding the extensive political pressure applied by certain members of congress and other steel producers seeking to impede competition by stopping Steel Development's efforts to build one of the world’s most technologically advanced steel mills, we will continue to focus our efforts on creating jobs right here in America.”