Steel Tariffs Anniversary Draws Cheers, Jeers

ByTonya Vinas Today's anniversary of the Bush Administration's steel tariff program has prompted calls of support and howls of protest. In other words, a repeat of what was going on a year ago. The 30% tariffs against certain imported steel products will drop to 24% this year. The "Section 201" tariffs are to be in place a total of three years. The American Iron and Steel Institute (AISI), Washington, D.C., remains a staunch supporter of the program, calling it a necessity to level the trade field for U.S. companies. Members also said the program is working and pointed to an increase in prices and consolidations as evidence. "The U.S. industry will come out of this 201 period much more competitive, [with] better costs and on a product-cost-coming-into-this-country [basis] we'll be competitive with almost anyone in the world," said Thomas J. Usher, an AISI director and chairman and CEO of United States Steel Corp., Pittsburgh. "Now if in fact there is continued bringing into this country well below the cost of production around the rest of the world, there's still going to be a problem. It will be incumbent upon the government to make sure that whatever trade laws are negotiated, and there are laws in place, they still need to be enforced." Bush imposed the tariffs in response to U.S. companies' complaints about cheap steel being sold on the U.S. market at below prevailing production costs. This, and other factors such as retiree benefits costs, caused a drastic downturn in the industry in the U.S. at the beginning of this century, Many industry leaders, such as LTV Corp. and Bethlehem Steel Corp., are now being acquired. While domestic steel producers generally support the tariff program, many importers and steel-consuming companies have complained bitterly about Section 201, blaming it for business shutdowns and massive job losses due to rising prices and a scarcity of some products. The Consuming Industries Trade Action Coalition Steel Task Force (CITAC STF) claims in a recent study that 200,000 were unemployed last year because of rising steel prices. ". . . because of the tariffs, prices have soared, lead time have increased, supplies have been disrupted and customers have moved overseas," said William Gaskin, CITAC STF chairman. "One year of the tariffs has meant a year of massive business and financial losses for steel consumers." Tariff supporters have responded that steel prices have simply returned to normal levels and had they remained at their depressed level, there would be no viable U.S. steel industry.