Japanese steel tariffs approved 6-0

Trade panel's vote clears the way for punitive sanctions

Basic materials

June 12, 1999|By William Patalon III | William Patalon III,SUN STAFF

A U.S. trade panel cleared the way yesterday for the government to slap punitive tariffs as high as 67 percent on imported steel from Japan.

By a 6-0 vote, the International Trade Commission ruled that U.S. steel mills have been hurt by cheap steel made by three Japanese companies and dumped on the U.S. market.

The ruling allows the Commerce Department to impose the sanctions, which will effectively price Japanese steel out of the market. The department is expected to impose the tariffs within weeks.

"I was kind of surprised it was a unanimous decision, though I did expect the vote to come down on the favorable side" of U.S. steelmakers, said Charles A. Bradford, an industry analyst with Bradford Research in New York City.

Bradford said he also was surprised by the wide divergence in the tariff levels, which were set in April by the Commerce Department. Kawasaki Steel Corp. will see its imports hit with a 67.14 percent tariff; Nippon Steel Corp., 19.65 percent; and NKK Corp., 17.86 percent. The duties will be made retroactive to February.

Dumping is defined as occurring when a foreign company sells a product here for less than it sells the same product at home. U.S. corporations have accused overseas producers of high-end cold-rolled sheet steel, rugged plate products and wire rod of dumping goods here.

The dumping allegations involving hot-rolled steel were made in September by a cadre of U.S. steel companies whose point man is Bethlehem Steel Corp. Chairman and Chief Executive Officer Curtis H. "Hank" Barnette.

Hot-rolled steel is a core Bethlehem product made by the company's mill at its local Sparrows Point Division.

"This is a positive development for Bethlehem Steel, a positive development for the American steel industry and a positive development for Sparrows Point," Barnette said in a telephone interview yesterday. The U.S. steel companies, which include USX-U.S. Steel, also alleged that companies from Brazil and Russia dumped hot-rolled steel. Those allegations have yet to be settled.

Japanese steelmakers were furious over yesterday's ITC ruling.

"The decision is unjustified, ill-conceived and counterproductive," said Masaki Sato, president and CEO of Nippon Steel USA Inc., an arm of Nippon Steel, the world's second-largest steelmaker. "Facing the overwhelming political pressures, the commissioners ignored the facts. It's a victory for the forces of protectionism."

Barnette said the dumping was obvious from the way imports were accelerating. In 1996, Japan shipped 250,000 tons of hot-rolled steel into the United States. In 1997, that total jumped by more than 1,000 percent, to 2.7 million tons -- clear evidence that Japanese firms were selling steel below fair market value, Barnette said.

In November alone, steel imports from Japan totaled 440,000 tons, he said -- an annualized rate of more than 5 million tons.

Before the dumping began, hot-rolled steel sold for $350 to $400 per ton; when the price war started, that same steel was selling for an average of $250 per ton, Barnette said.

In February, imports of hot-rolled steel from Japan totaled only 10,000 tons, evidence that country had reduced imports as a direct result of the trade cases pending against it.

But prices have yet to return to their previous levels, Bradford said. Barnette conceded that prices were lingering around $300, but he said he believed that they would rise.

U.S. firms have lodged similar complaints relating to cold-rolled steel and steel plate, and have pushed Congress and the Clinton administration to establish other restrictions on imported steel.

Frederick Rocchio Jr., chief executive officer of Northwestern Steel and Wire Co., said this week that the Sterling, Ill., mill is weighing a complaint against imports of steel beams and flanges.

And Barnette has said Bethlehem may go after imports of tin and rail products.

Wire services contributed to this article.

Pub Date: 6/12/99

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