Panel Urges Tariffs On Steel Imports

WASHINGTON – The U.S. International Trade Commission Dec. 7 recommended that President Bush slap tariffs of 5% to 40% on low-cost steel imports that domestic producers say have crippled their industry. For some U.S. steel makers, the penalty is not stiff enough.

Andrew G. Sharkey III, president and CEO of the American Iron and Steel Institute, an association of 36 North American companies, said: "The United States needs the strongest possible steel tariff remedy, not just to enable U.S. steel producers to recover and continue their efforts to restructure and improve their competitiveness. We also need this remedy to promote urgently needed adjustment abroad, that is, to send the strongest possible signal to offshore governments that the steel market of the United States is no longer open for ‘business as usual’ to the injurious dumping of excess ... steel."

Although the recommended tariffs for 16 product lines go up to 40%, most fall in the 8% to 20% range. Domestic steel producers had sought tariffs between 30% and 50%.

Five of the six commissioners voted for four years of tariffs ranging from 20% to 40% on major categories of finished carbon and alloy steel imports. Two of the three Republican commission members voted for relatively stronger tariffs on tubular (30%), long (35%) and all flat-rolled (40%) carbon and alloy steel imports covered by the ITC’s previously announced determination that imports had injured the U.S. market (November 2001, pg. 1).

"America’s steel industry is in its worst crisis in history, and a strong steel tariff remedy is an essential part of the solution," said Duane R. Dunham, AISI chairman and president of Bethlehem Steel Corp., which filed for Chapter 11 bankruptcy protection in October. "Clearly, we need the most effective steel tariff remedy possible. This is because over the past five years, due to record surges of unfairly traded imports, steel prices in the United States have declined by more than 40% — and they are today at unsustainable, record-low levels."

Steel makers in the European Union, Canada, Mexico, China, Brazil, Argentina, South Korea, South Africa, Russia, Ukraine and Taiwan are among the leading suppliers of steel sent to the United States. Some of them have contended that tariffs will increase prices on goods such as trucks and appliances bought by U.S. consumers. They’ve also accused the U.S. steel industry of inefficient production methods.

U.S. Trade Representative Robert Zoellick has said the Bush administration would crack down on steel imports only if domestic producers consolidate their operations. In early December, USX, Bethlehem, and "four or five" other U.S. steel makers said they are talking about merging. The other firms were not identified. As part of the agreement, the steel companies apparently want the federal government to help pay their workers’ pension and other retiree costs.

President Bush has until mid-February to accept, reject or revise the ITC’s recommendation on imports.