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U.S. Trade Panel Seeks Steel Tariffs

Thu December 13, 2001 - National Edition
Construction Equipment Guide

A federal trade panel recommended a range of tariffs and quotas on imported steel Friday to boost the battered domestic industry.

Foreign producers and U.S. companies that use imported steel condemned the move as protectionism that will drive up prices for American consumers.

Each of the six members of the International Trade Commission made recommendations on how the U.S. government could offset steel imports that the panel earlier this fall ruled were unfairly subsidized by foreign governments. The Bush administration must decide by mid-February whether to accept, reject or modify them.

The tariffs suggested for 16 steel product lines ranged from 5 percent to 40 percent, with most between 8 percent to 20 percent. Two commissioners also recommended quotas. Among the products covered are cold-rolled steel, which is used in cars and appliances, and welded pipe, used in construction projects.

The remedies would be in place for four years while the industry restructures itself to become more competitive.

Without the tariffs and the additional help to deal with the other costs, the industry will continue to suffer injury from the predatory penetration of our markets,’ Commissioner Dennis P. Devaney said.

European Union (news - web sites) Trade Commissioner Pascal Lamy warned the EU would file a complaint with the World Trade Organization (news - web sites) if the Bush administration imposes tariffs or quotas.

"The EU calls on the U.S. administration to reject this call for the protection of an industry that is already sheltering behind numerous defensive measures,’ he said. ”The U.S. steel industry needs to put its own house in order. This should not be done at the expense of those who have already done so.’

The U.S. steel industry has been in decline for years. Only about 210,000 people are employed in the industry now, down from 600,000 in 1980. And 26 companies have filed for bankruptcy since 1998.

The industry had sought tariffs ranging from 30 percent to 50 percent - the maximum allowed - saying anything less wouldn’t do enough to save most remaining companies.

Leo Gerard, president of United Steelworkers of America, and John H. Walker, president of Weirton Steel Corp., urged Bush to go beyond what the panel recommended.

"Anything less than the maximum will enable foreign producers to continue selling steel in the U.S. at cutthroat prices that will only prolong our struggle,’ Walker said. ”This may be our last chance to close the wound, stop the bleeding and move toward a full recovery.’

A spokesman for Commerce Secretary Donald Evans said the department looks forward to reviewing the recommendations and to working with officials of steel companies and unions before making a decision.

U.S. Trade Representative Robert Zoellick had previously has said the administration would impose protective trade barriers only if the steel industry consolidates some of its operations. This week, two of the largest domestic steel producers, USX and bankrupt

Bethlehem Steel Corp., announced they and three other companies are discussing the possibility of merging.

David Phelps, president of the American Institute for International Steel representing companies that use steel, said the tariffs would raise prices for consumers without helping U.S. steel companies. He estimated the proposed tariffs would add $150 to the price of a car.

"It’s not going to save the weakest companies but those firms that import will have to eat the duty, raise prices and have a harder time staying in business,’ he said.

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