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By Bernie Woodall
DETROIT, Aug 12 (Reuters) - Moves by Chinese steel exporters Wednesday to cut prices provoked cries of foul from the U.S. steel industry, and gave politicians skeptical of the pending Trans Pacific Partnership trade agreement new ammunition.
Reuters reported Wednesday that Chinese steel producers were cutting export prices, riding the fall of the yuan currency after the central bank devaluation on Tuesday.
“This devaluation is just the latest attempt to support Chinese industry at the expense of producers in the rest of the world who have to earn their cost of capital to survive,” said Alan Price, a lawyer who represents U.S. steelmaker Nucor Corp .
United Steelworkers union president Leo Gerard said: “Washington has been asleep at the switch in dealing with China” and called for action against “China’s predatory practices” before more U.S. jobs were lost.
The union represents 850,000 members in North America.
Trade policy and steel industry jobs are important to several states that will be pivotal in the 2016 presidential election, including Ohio. That state’s Republican and Democratic senators both criticized China’s devaluation and linked it to the Trans Pacific Partnership trade talks, even though China was not a party to those negotiations.
“The U.S. needs to ensure American businesses and workers have a backstop to fight back against currency manipulation,” Ohio’s Democratic Senator Sherrod Brown said.
Ohio Republican Senator Rob Portman struck a similar note.
“We cannot afford to sit idly by as China refuses to play by the rules,” Portman said. “Any negotiations on the Trans-Pacific Partnership must prioritize combating currency manipulation by our foreign competitors.”
Democrats and labor unions say the TPP deal could unleash a flood of cheap imports, forcing U.S. plant closures and killing good jobs in steel and other industries.
Steel has been a source of tension in the U.S.-China trade relationship for years.
U.S. steelmakers have filed a series of actions accusing rivals in China and other countries of dumping products below cost in the U.S. market. The Obama administration has backed the industry on some of those petitions, slapping duties on imported steel products.
Since July, U.S. steelmakers including AK Steel, U.S. Steel Corp and Nucor have filed trade petitions over imports of hot-rolled steel and cold-rolled steel. China was named in the cold-rolled steel complaint.
In June, the U.S. Department of Commerce said it would look into a third complaint about imports of corrosion-resistant steel, which also named China.
U.S. steelmakers scored a victory in June when Congress approved stronger anti-dumping and countervailing duty laws.
“China has consistently intervened directly in foreign exchange markets to ... make their exports more competitive and impose new barriers to imports,” said Thomas J. Gibson, head of industry group American Iron and Steel Institute.
Price, representing Nucor, said China had built “massive excess capacity in steel, aluminum, and many other industries that is unrelated to market demand or legitimate development needs.”
The solution, he said, should be for Chinese steelmakers to shut some of those plants. (Reporting by Bernie Woodall and Joe White in Detroit; Kevin Drawbaugh and John Whitesides in Washington; Sweta Singh in Bangalore; Editing by Grant McCool)