U.S. levies duties in steel case

Brazil, Japan face tariffs for `dumping' low-priced steel here

Decision on Russia near

Beth Steel-led effort brings ruling that will severely limit imports

February 13, 1999|By William Patalon III | William Patalon III,SUN STAFF

The Commerce Department imposed preliminary duties of 25.1 to 71 percent yesterday on hot-rolled steel from Brazil and Japan, and made the tariffs retroactive to mid-November.

Siding with the U.S. steel industry, the department said it imposed the duties -- which would effectively ban imports -- because it had found evidence that the two dumped hot-rolled steel in this country.

The findings were the result of a dumping petition filed in September by the U.S. steel industry in an effort that was spearheaded by Bethlehem Steel Corp. Chief Executive Officer Curtis H. "Hank" Barnette.

The industry claimed that Brazil, Russia and Japan were selling steel in this country for less than the same products were selling for at home. That is known as "dumping" and is illegal. In some cases, the steel was being sold for less than it cost to make, the U.S. steel companies said.

According to one set of statistics, steel imports from those three countries were 60 percent higher in the first half of 1998 than in the same period a year earlier.

"The situation here cries out for action because of the abuse," said Commerce Secretary William M. Daley.

The tariffs imposed range from 50.7 percent to 71 percent on hot-rolled sheet steel from Brazil and 25.1 percent to 67.6 percent on the same goods from Japan.

Daley said the department postponed applying duties on Russian steel to allow negotiators a few more days to reach an agreement that would set quotas and minimum prices on all steel products from there.

He noted at a news conference that 10,000 steel workers had lost their jobs in the past year, probably because imports of cheap steel into this country ballooned.

Against Brazil, the Commerce Department also levied additional preliminary tariffs ranging from 6.6 percent to 9.45 percent of the value of imports, after finding that country was subsidizing the hot-rolled steel exported into this country.

Before tariffs can be imposed, the Commerce Department must make a final determination by April. The U.S. International Trade Commission would then have to find by mid-June that the imports injured the U.S. steel industry. The U.S. Customs Service will collect cash deposits or bonds from imports to cover any duties later applied retroactively.

Bethlehem Steel, which operates the Sparrows Point Division where hot-rolled steel is made, said "these findings confirm these countries have been dumping steel in America in massive quantities causing serious injury. Between 1995 and November 1998, hot-rolled imports from the three countries surged 630 percent, increasing their U.S. market share tenfold, from 4.3 percent to 42 percent."

Officials with the United Steelworkers union could not be reached.

Fujio Ono, chairman of the Japan Steel Information Center, called the charges "unjustified, ill-considered and counterproductive" and said market forces "are working to lower imports without government intervention."

The steel-dumping issue poses a quandary for the government and the industry. There is reportedly a split within the Clinton administration that pits Daley and U.S. Trade Representative Charlene Barshefsky, who want sanctions to restrict imports, against Treasury Secretary Robert E. Rubin, who fears that a closed U.S. market would exacerbate economic problems in Asia, Latin America and Russia.

Steelmakers want imports restricted, which the tariffs would do.

steel consumers, particularly automakers and heavy-equipment makers, don't want the tariffs, because they want to be able to buy the cheapest and best-quality steel available. The steel users fear that a rise in steel prices would make their products less price-competitive with similar, foreign-made products abroad.

"They get killed," said Daniel T. Griswold, an associate director of the Cato Institute, a Washington free-trade think tank.

This month, because of heightened demand, U.S. companies including Bethlehem Steel, LTV Corp. and other steel companies announced they would raise prices on steel as the flood of imports ebbed.

Duties of 20 percent or more "could be an effective ban on imports," said Charles A. Bradford, of Bradford Research in New York.

However, Morgan Stanley analyst Waldo Best said yesterday's ruling won't affect steel pricing in the U.S. market because Japanese importers "backed away from our market at least two months ago."

Wires services contributed to this article.

Pub Date: 2/13/99

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