September 15, 2015

Wyden, Barrasso Introduce Bill to Help American Soda Ash Producers Compete in Global Market

Bipartisan bill follows China’s recent decision to devalue its currency by 4.4 percent

WASHINGTON, D.C. – Today, U.S. Senators Ron Wyden, D-Ore., and John Barrasso, R-Wyo., introduced bipartisan legislation to maintain competitive royalty rates on America’s natural soda ash, which is critical in manufacturing industrial products like glass. The Soda Ash Competitiveness Act will set the royalty rate on sodium compounds (and related products) produced from federal land at 2 percent for five years.

“Natural soda ash produced in the United States directly supports hundreds of jobs in Oregon and across the country and was the second largest export for the Port of Portland last year,” Wyden said. “Continuing the royalty relief for domestic soda ash keeps the playing field level so American producers can stay competitive in a global market where China is gaming the system and producing synthetic soda ash exports at the expense of U.S. producers and the environment. The current royalty rate reduction is set to expire this year, so now is the time for the Senate to act and create certainty for this thriving American industry.”

“American soda ash producers are battling unfair foreign trade practices of China and other countries. The last thing Washington should do is raise costs here at home,” Barrasso said. “American soda ash production supports thousands of jobs across the country in a variety of sectors, including mineral production, shipping, and manufacturing. Our bipartisan bill will give American soda ash producers the certainty they need to stay competitive in the global market and keep these jobs here in the United States.”

Senators Mike Enzi, R-Wyo., and Jeff Merkley, D-Ore., are original co-sponsors of the Soda Ash Competitiveness Act.

Background:

Natural soda ash, also known as sodium carbonate, is a raw material used to manufacture glass, detergents, and other industrial goods. Natural soda ash is produced from trona, a mineral found in high concentrations on federal land, primarily in California and Wyoming.

The United States exports approximately 57.5 percent of its natural soda ash. In 2014, the U.S. exported about $1.3 billion of soda ash, making soda ash our second-largest inorganic chemical export as measured in terms of value.

For years, China has sought to capture global market share from U.S. soda ash producers through unfair trade practices. China has given its own synthetic soda ash producers a 9 percent rebate on China’s value-added tax (VAT). In addition, China devalued its currency by 4.4 percent to boost Chinese exports. It is estimated that China’s VAT rebate and devaluation give Chinese synthetic soda ash producers a $27 per-metric-ton benefit.

When compared to Chinese synthetic soda ash, U.S. natural soda ash has significantly lower lifecycle emissions of carbon dioxide, sulfur dioxide, nitrogen, particulate matter, and contributors of ground-level ozone. 

Under current law, the royalty rate on sodium compounds (and related products) produced from federal land is 4 percent. The royalty rate will increase to 6 percent on October 2, 2015.

The bill is the Senate companion to H.R. 1992, which Rep. Paul Cook introduced on April 23, 2015, and the House Natural Resources Committee reported on a bipartisan vote on July 29, 2015.