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Manufacturers Clash Over U.S. Steel Tariffs
Mar 4, 2005
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U.S. lawmakers, steel companies, and unions have urged a trade panel to keep steel tariffs on some foreign imports for 5 more years. Carmakers and appliance manufacturers said it's time to let competition back into the market.

The U.S. International Trade Commission is reviewing penalties put in place in 1999 to stop a flood of low-priced hot-rolled steel from Brazil, Japan, and Russia. A second wave of steel imports from 11 other countries led to additional tariffs in 2002, which U.S. President George W. Bush lifted in late 2003.

"Unfortunately, unfairly traded imports of hot-rolled steel have continued to plague this industry and continued to harm steel workers and their families," Rep. Ted Strickland, D-Ohio, U.S., told the panel. "Now is not the time to terminate relief as the domestic hot-rolled steel industry has only just begun to recover."

About two dozen other lawmakers from steel-producing states, including Pennsylvania, West Virginia, Michigan, North Carolina, and Illinois, also testified in favor of keeping the tariffs.

But domestic manufacturers such as Ford Motor Co., General Motors Corp., Maytag Corp., Whirlpool Corp. and auto parts maker Dana Corp. told the trade panel that the tariffs are causing higher steel prices and harming their business.

"We believe that the restitution in this case are no longer needed," said Jeff Engel, executive director for American production purchasing at Ford. "The industry has consolidated, it is competitive, it has recorded record profits and it is improving."

The U.S. steel industry has rebounded and reorganized since the tariffs were first ordered. International Steel Group was born after merging several bankrupt steel companies, including LTV and Weirton, while U.S. Steel and Nucor each acquired other companies.

In 2004, the industry turned its first profit in years. But steel companies and unions say one year does not make a trend. They want the ITC to continue the tariffs so they can earn enough cash to ensure financial viability, make capital investments and fund retiree benefits.

The Commerce Department already has determined that lifting the tariffs would result in more imports from these countries. Trade commissioners at Wednesday's hearing are to decide by mid-April whether those imports would harm the U.S. steel industry, a key finding that would guarantee the continuation of the tariffs.

"It's almost impossible to imagine that if they acted as they did in 1998, that injury would not occur," said Terrence Straub, vice president of public policy for U.S. Steel. "It could destabilize the market."

But Rep. Joe Knollenberg, R-Michigan, U.S., told commissioners that automakers in his state are struggling under higher steel prices and if they don't get a break soon, more manufacturers will go bankrupt or move overseas. (The Associated Press)

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