International Reaction To Tariffs On Steel Imports Is Swift, Angry

By Agence France-Presse U.S. President George W. Bush announced 30% tariffs on the bulk of U.S. steel imports for three years, provoking a swift and angry international reaction. "Today I am announcing my decision to impose temporary safeguards to help give America's steel industry and its workers the chance to adapt to the large influx of foreign steel," Bush said in a statement March 5. "I take this action to give our domestic steel industry an opportunity to adjust to surges in foreign imports, recognizing the harm from 50 years of foreign government intervention in the global steel market, which has resulted in bankruptcies, serious dislocation and job loss," he said. Japanese steel makers immediately criticized the tariffs, which would hit Japan in particular while U.S. trading partners Canada and Mexico escaped any penalty. "President Bush's decision to limit fairly traded steel imports into the United States is plainly wrong," said Hidenori Tazawa, executive vice president of NKK America Inc. Europe warned of a trade war. "Let us agree to work together to resolve this difficult problem for I fear the alternative is a major trade conflict," European Commission President Romano Prodi warned in a letter on the eve of the decision. Bush's decision was taken under Section 201 of the 1974 trade law, which lets the president impose punitive tariffs on imports found to have caused injury to the domestic industry. The measures included 30% tariffs on flat steel, hot-rolled bar and cold-finished bar and tin mill products -- accounting for the biggest slice of imports. Tariffs of 15% were slapped on stainless steel bar, stainless steel rod, rebar and certain tubular products. Tariffs of 13% were put on carbon and alloy fittings and flanges. An 8% tariff was put on stainless steel wire. Imports of slab, a major imported product, would face a quota of 5.4 million short tons. Above that level, they would face an import tariff of 30%. "Today the president announced a comprehensive, three-year plan to help the American steel industry and its workers get back on their feet," U.S. Trade Representative Robert Zoellick said. It would exclude countries that have signed free trade agreements with the United States such as Canada and Mexico, he said. Steelmakers had called for 40% import tariffs across the board for four years. Bush said he had proposed a major expansion of the National Emergency Grants system to give retraining and assistance to workers affected by restructuring. "I have also proposed direct assistance with health costs that will be available to workers and retirees who lose their employer-provided health coverage," he said. The steel industry had pleaded for a $10 billion dollar government bailout to fund the massive health costs of retirees from failed steel firms. Copyright Agence France-Presse, 2002