U.S. Steel Consumers Urge Bush to End Steel Tariffs
Jun 20, 2003
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U.S. automotive suppliers, other manufacturers, and even some fellow Republicans called for U.S. President George W. Bush to end his emergency steel tariff program, saying it contributed to massive job losses in the manufacturing sector.
"U.S. manufacturing, as a whole, is in a crisis and tariffs on steel are part of the problem," Rep. Joseph Knollenberg, a Michigan Republican, told the U.S. International Trade Commission at the start of 2 days of hearings on the effect of the tariffs on steel consuming companies and the overall economy.
President Bush imposed tariffs of up to 30 percent in March 2002 to help the U.S. steel industry get back on its feet after a string more than 30 bankruptcies. U.S. trading partners challenged the action and the tariffs were declared illegal by the World Trade Organization earlier this year.
The U.S. has appealed the decision and is awaiting a final ruling this fall. In the meantime, as part of a mid-term review ordered by Bush, the ITC is preparing a report on whether the 3-year tariff program is having its intended effect of promoting steel industry restructuring. Once receiving that report, President Bush could decide to continue, modify, or terminate the steel tariffs, which already have fallen to a top rate of 24 percent in the second year of the program and will drop further in the third and final year.
U.S. steel consuming companies, such as Caterpillar Inc., have successfully lobbied key Republicans to order a second report requiring the ITC to examine the effect of the steel tariffs on different manufacturing sectors and the U.S. economy. Both reports are due to be sent to President Bush by Sept. 20.
The ITC, which recommended protection for the steel industry in late 2001, was scheduled to hear testimony opposed to the tariffs on Thursday from more than three dozen witnesses representing automotive suppliers, machinery manufacturers, port operators, and other sectors. They've been given a boost by Federal Reserve Chairman Alan Greenspan, who last month called for the tariffs to be ended.
Rep. Nancy Johnson, a Connecticut Republican, called the steel tariffs "an important contributing factor in the recent precipitous decline in the health of the manufacturing sector," which has lost 2 million jobs over the past 2 years.
But Rep. Peter Visclosky, an Indiana Democrat, said they were a vital lifeline for an industry that had been injured by a surge in unfairly priced and subsidized imports from abroad. He warned that ending the steel tariffs early would be a "devastating blow" to ongoing steel industry efforts to restructure and become more competitive. (Reuters)
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