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The United States and China have reached an agreement where China will end its subsidies on steel exports, which enable them to undercut American steelmakers on price and led to more than 1,000 steelworker layoffs in Northwest Indiana last year.

China exported more than 112 million tons of steel last year, more than the United States can even produce. Chinese companies were often able to sell steel abroad at a loss because they received heavy government subsidies, such as having the Communist government pay the entire power bills for steel mills.

“Today we have signed an agreement with China to eliminate export subsidies that the United States challenged because they are prohibited under WTO rules," U.S. Trade Representative Michael Froman said. "This is a win for Americans employed in seven diverse sectors that run the gamut from agriculture to textiles to medical products, who will benefit from a more level playing field on which to compete."

The agreement underscores President Barack Obama's commitment to aggressively enforce trade rights to secure results for American workers, farmers, and businesses, Froman said.

The deal was announced after a two-day hearing in Washington by the U.S. Trade Representative and the U.S. Department of Commerce. The United Steelworkers union and steelmakers gave federal officials an earful about the 13,500 steelworkers that have been laid off because of the global import crisis.

Froman said China has agreed to withdraw central government funding for exports, including steel and aluminum, to end preferential service agreements that enable companies to get free or discounted services, and to end cash grants for exports.

"The agreement is one good step forward; however, the agreement will not make the 700 million tons of excess global steel capacity, including China’s 425 million tons of excess steel, vanish into thin air," he said. "China continues to pose a real and constant threat to American workers and their families, and I will continue to work every day to fully enforce all of our trade laws and stop the influx of illegal steel imports." U.S. Sen. Joe Donnelly said there was reason to be wary, given China's past track record.