Steelworkers' Union Chief Becomes a Force in Trade

The U.S. trade complaint against China's tire exports, and a new case involving paper, are examples of how union leader Leo Gerard is exerting influence in Washington

By Steve LeVine

Over the past eight years, Leo W. Gerard has earned a reputation as a labor strongman with a pragmatic streak. The 62-year-old Canadian who heads the 850,000-strong United Steelworkers has played a pivotal role in the consolidation of the American steel industry, engineering mergers while fighting to save as many union jobs as possible. Now, as the leader of the country's largest industrial union, Gerard is becoming a major force in U.S. trade policy.

It was a complaint by the USW that prompted President Barack Obama's Sept. 11 decision to slap a punitive 35% tariff on Chinese tire imports, which total some $2 billion a year. The union is now contemplating action on numerous other possible violations by U.S. trading partners. Says Gerard: "We're [not] lining up with a bag full of cases." But "if we find other places where we feel the rules have been violated, it is our responsibility to try to get the government to enforce the rule."

On Sept. 23, the USW filed one of those new cases with the U.S. Commerce Department—this time against both China and Indonesia. The anti-dumping case, filed jointly by the USW and three U.S. paper companies, alleges that the two Asian countries have subsidized their coated paper industries and sold the paper in the U.S. below the cost of production. It claims that in the first half of this year, the Chinese and Indonesians doubled their share of the U.S. coated paper market compared with the same period in 2008, to about 30% from 15% respectively. U.S. sales of coated paper were about $1.8 billion in 2008.

Some economists and industry analysts have worried that such union actions will trigger retaliatory trade protectionism, but Gerard takes the position that he is merely invoking the law. The Chinese "think that because we owe them so much money that they can push us around," he told reporters in a phone call Sept. 24. "I don't think it's protectionism. That's a misuse of language. We are applying the law as it exists."

Always an important political constituency for Obama, labor has become all the more crucial now that the President faces stiff opposition from Republicans on key initiatives, notably health-care reform. Gerard—along with AFL-CIO President Rich Trumka and Andy Stern, president of the Service Employees International Union—are key to Obama's efforts to energize his base. "Labor must be kept happy so that they will continue to push hard to produce the Democratic votes in the House and Senate needed for a health-care victory later this fall," says Larry Sabato, director of the Center for Politics at the University of Virginia.

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