The American steel industry is in trouble. It's long been under pressure from cheaper foreign imports. Then, demand dropped off a cliff during the recession as construction slowed. And over the past few months, as activity was recovering -- especially natural gas extraction, which requires miles and miles of steel tubing -- a flood of production started coming online from Asia, sending prices through the floor.

Asian production is off the charts. (Economic Policy Institute)

Unable to compete, U.S. steel companies have cried foul. In a hearing on the Hill a couple months ago, executives said that South Korean steel companies were dumping massive amounts of supply on the American market, vaguely suggesting they were up to dirty tricks. So far, though, the Commerce Department has disagreed. Since Korean companies weren't artificially depressing prices, it didn't qualify as illegal dumping, the department ruled in February.

But the U.S. companies -- as well as the unions whose membership depends on domestic production -- haven't given up. They've asked the Department of Commerce to reevaluate its decision, and on Tuesday they put out a report by the Economic Policy Institute making the case for why America ought to fight back. In a rare moment of accord, Sens. Sherrod Brown (D-Ohio) and Jeff Sessions (R-Ala.) -- both from heavy steel-producing states -- got on a call with reporters to drive that message home.

The argument boils down to this: Regardless of whether or not Korean firms were selling their steel for lower prices, many of the companies are state-owned and thus receive advantages that U.S. private industry doesn't. Also, not being market-driven actors, the Koreans don't adjust production when demand stagnates, driving the price lower than it might otherwise be.

"They see us as a big fat market that they can exploit when they're in trouble to keep their employees working," as Sessions put it. "We're not in a free market... I think the ideal of trade is correct, but I don't think the single, overriding goal must always be the lowest price for everybody in America." 

He's put his finger on the tradeoff between economic freedom and American jobs: Someone's cheap goods are another person's pink slip. Except it's a little more complicated than that. If the natural gas industry can get cheaper tubing, maybe it will produce even cheaper gas, which has created hundreds of thousands of jobs by making American manufacturing more competitive. Even Brown agrees with that -- he signed a letter a couple days ago asking that the United States not allow gas exports to China, which would theoretically keep prices lower for Americans.

But Brown thinks that gas companies don't pass savings from cheaper inputs onto consumers, and in any case, insists that those low prices are ill-gotten gains. "Drilling into the Marcellus shale is profitable enough already," he said. "It's a little bit like arguing that it's okay for people to buy stolen TVs just because they're cheaper."

But if Korea has been careful with its export strategy -- unlike China, which the United States slapped with heavy duties on steel after determining that it was in fact dumping -- American steel companies may not have a way to make it stop. And steel jobs, which had just begun to recover, might go back into a long decline.

(Economic Policy Institute)