U.S. seeks duties on foreign steel 'Dumping' penalties could result in up to 400 Point jobs

June 23, 1993|By Jeff Leeds | Jeff Leeds,Contributing Writer

WASHINGTON -- The Commerce Department, capping a yearlong inquiry, proposed punitive import duties yesterday on companies from 19 countries for "dumping" steel on the U.S. market at unfairly low prices.

The department also found that 12 countries -- 11 of which were also found to be dumping -- had subsidized the price of these steel products, helping hold down prices.

Angering European and Asian steelmakers, the finding was hailed by U.S. manufacturers. The duties would take effect later this year if the U.S. International Trade Commission also finds the imports threaten U.S. steelmakers.

The import penalties could result in 400 new jobs at Bethlehem Steel Corp.'s Sparrows Point plant if it gains a share of the business that would be opened by decreased foreign trade, said the company's chief executive, Curtis H. Barnette.

"Today's decision confirms an egregious distortion of the international marketplace by foreign steel producers," Mr. Barnette said. "Foreign steelmakers must stop exporting unemployment to the United States, they should stop complaining about U.S. trade policy, and they should start making the same tough decisions that American producers made years ago . . . . to downsize and restructure."

Leading American companies, including Bethlehem, charged last year that foreign competitors were selling their product in the U.S. below market value and that several governments were illegally subsidizing their steel industries.

About $3.2 billion worth of steel was imported last year from the 20 countries found guilty of dumping or subsidizing steel.

The duties, if imposed by the ITC, would range from a 1.47 percent tax on a Canadian company to effectively doubling the price of steel from British and Brazilian companies.

If the ITC, a six-member independent panel, imposes the penalties, limiting imported steel, U.S. companies would be expected to pick up the slack. The ITC has 45 days to decide whether to enact the sanctions.

In a complaint aimed at bolstering the U.S. steel industry's case, domestic producers this week also charged that some European and Asian steelmakers were fixing prices by meeting in cartels to safeguard their home markets from competition.

The separate complaint regarding cartels, filed Monday with the ITC, alleged that Japanese and European Community members have been carving up the world steel market for more than 25 years. Although the arrangements have been kept secret from international trade authorities, "they are well-known to steel traders and marketing executives throughout the world," the claim said.

The biggest EC-Japan secret accord, called the East of Burma Agreement, sets ceilings on the volume of steel shipments between the two and includes commitments to restrain prices in each other's home market, according to the complaint.

Representatives of foreign steel companies denounced the Commerce Department's sanctions yesterday as "protectionist" and said endorsement of the duties by the ITC would effectively make the U.S. steel industry a government-supported cartel.

Horst Buelte, president of the American Institute for International Steel, said that "for every job retained in the U.S. steel industry by tariffs, three jobs will be lost in steel-using manufacturing companies."

But in a statement yesterday, Commerce Secretary Ronald H. Brown sided with the steelmakers.

"The administration fully supports the rights of the domestic industry to obtain relief from unfair trade practices under U.S. law and will make sure these laws are enforced in a fair and effective manner," Mr. Brown said.

The department investigation covered four types of steel: hot-rolled carbon steel flat products, cold-rolled carbon steel flat products, corrosion-resistant carbon steel flat products and cut-to-length steel products.

Thomas J. Usher, president of the U.S. Steel Group, a division of USX Corp., said "a trade war has been going on for years. We've been getting beat. The U.S. is a net importer of steel."

But a spokesman for the European steel industry said steel imports should not "be used as a whipping boy for problems arising largely from domestic competition."

Since the American steel companies began shrinking under the Bush administration, about 200,000 steel workers have lost their jobs, industry leaders said, adding that unfair practices, including foreign cartels, were the reason they were forced to shrink in the first place.

A Bethlehem Steel spokesman said employment at Sparrows Point, has dropped by half, to about 6,000, over the past decade as a glut of cheaper steel depressed the industry.

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