The International Trade Commission yesterday recommended tariffs of up to 40 percent on certain steel imports to help protect the domestic industry from cheap foreign steel that has driven down prices, but the rulings fell short of domestic producers' expectations.
At the direction of President Bush, the ITC began last summer studying the question of whether imports were harming U.S. steel producers. The commission ruled in October that the industry had been harmed and yesterday's action addressed what remedies should be put into place.
Steel makers had been hoping for a unanimous recommendation of tariffs in the range of 30 percent to 50 percent. Instead, the six commissioners recommended a hodgepodge of tariffs that ranged from 5 percent to 40 percent.
Bush now has 60 days to act on the proposals and steel makers hope he will act on the advice of the commissioners who recommended the most stringent remedies.
"The ITC's decision in October and again today support the president's position and underscore the urgency with which the government must now move forward to correct the situation," said Robert S. "Steve" Miller, chairman and chief executive of bankrupt Bethlehem Steel Corp. "We urge the president to act promptly and forcefully."
The six-member commission recommended a range of tariffs on a variety of steel products with most of the tariffs at about 8 percent to 20 percent.
"Tariffs in that range should certainly help reduce imports further and help pricing in the U.S.," said steel analyst Aldo Mazzaferro of Goldman Sachs & Co., who noted that prices are off about 30 percent from their levels of 18 months ago.
Shares of Bethlehem, which have been pummeled in the wake of repeated losses and its Chapter 11 filing in October, rose 20 percent yesterday to 71 cents.
While steel producers are hoping for strong actions, a group representing steel users was disappointed with the recommendations and will continue to urge the Bush administration to resist imposing high tariffs.
"It could devastate a lot of the downstream industry, many of which are small businesses," said Janet Kopenhaver, executive director of the Consuming Industries Trade Action Coalition.
Bush's request for an investigation by the commission was only the fourth made by the White House since the Trade Act of 1974 was created.
"I call on [President Bush] to impose a significant enough penalty to ensure that the price of imported steel is competitive with U.S.-produced steel," said Maryland Democratic Rep. Benjamin Cardin. "He also needs to address the ... pension and health care costs for retired workers."
Bethlehem has been pushing for the federal government to take over the health cares costs of its retirees in order to make it a more attractive acquisition target. U.S. Steel has said it would acquire Bethlehem if the retiree health care obligation were off the books. The companies have suggested that the money raised from import tariffs could be used to offset those costs.
The head of the United Steelworkers of America, which backs Bethlehem's health care proposal, said he was pleased with the commission's recommendations but said he hopes the president will go above and beyond its directives.
"Now it's crucial for the Bush administration to implement the strongest remedies possible - even stronger on slabs than those recommended by the ITC - to prevent further damage from a crisis that has already sent 26 companies into bankruptcy and wiped out 13 million tons of American steel-making capacity," said Steelworkers President Leo Gerard.