(Bloomberg) -- Chilean politicians are clamoring to convince the country’s only steelmaker to overturn a decision to shutter operations due to an influx of cheap Chinese alloy, testing the nation’s free-trade resolve.

This week, the lower house of Congress passed eight resolutions to urge President Gabriel Boric to defend the loss-making steel industry. Economy Minister Nicolas Grau told a Senate committee that it wasn’t too late to seek stricter anti-dumping measures and called for mining companies not to be “indifferent” to the steel-making crisis. On Thursday, regional authorities and union leaders will address lawmakers on Cap SA’s announcement last month to wind down its mills.

Read more: Cap Surges on Decision to Close Loss-Making Chile Steel Plants

While Chile accounts for a tiny fraction of a global steel industry that’s dominated by China, the case is putting the Boric administration’s priorities to the test. On one hand, raising tariffs to the 25% levels of North America and Europe would help keep the mills running, safeguarding 20,000 jobs. On the other, it would erode a free-trade strategy that’s helped Chile prosper in relative terms, as well as risking the ire of top trading partner China.

The dilemma is shared by other steel producers in the region such as Brazil and Colombia amid an up-tick of cheap imports due to slower domestic demand in China and years of prohibitive tariffs elsewhere. While steel-making is a small part of regional economies, it’s use in infrastructure and manufacturing makes it strategic.

The predicament was exemplified by a protesting steel worker this week: “To President Boric, you have a commitment to the Chilean people, not to the Chinese,” Jorge Gonzalez told Radio Bio Bio.

(Adds congressional session with regional authorities and unions)

©2024 Bloomberg L.P.