Helping U.S. Customs agents catch illegal steel imports

Domestic producers to give classes on ploys used to avoid tariffs

October 29, 2002|By Kristine Henry | Kristine Henry,SUN STAFF

After its hard-won battle for tariffs on imported steel, the domestic industry is taking action to make sure those duties are enforced as rigorously as possible.

To that end, representatives of domestic producers will be in Baltimore beginning today to give "Steel 101" training to U.S. Customs Service officers for the port of Baltimore. The agents are to be educated on how to look for suspicious shipments, such as a load of, say, cold-rolled steel from a country that has no cold mills.

"We tell them to recognize there's ample incentive for people to attempt to get around various duties, so be careful when you're doing your paperwork and look for inconsistencies," said Larry Mosser, a consultant for the American Iron and Steel Institute who will lead the training.

After steel imports into the United States reached an all-time high in 1998, pushing prices to 20-year lows and helping to push dozens of U.S. steel mills into bankruptcy, domestic producers appealed for relief from the federal government. President Bush, who courted steel interests during his presidential campaign, imposed tariffs of up to 30 percent on imported steel in March.

Many developing nations were not included in the tariff order and Canada and Mexico are exempt because of the North American Free Trade Agreement. Additionally, the Bush administration has granted hundreds of exclusions for some products. As a result, more than 3 million metric tons of additional steel, or about one fourth of what was originally covered by the tariffs, may now enter the United States duty free.

With so many exceptions to the tariffs, domestic producers are all the more determined that regulations be followed to the letter.

In the two days of training - today and tomorrow, followed by a tour of Bethlehem Steel's Sparrows Point plant Thursday - Mosser will give customs agents an overview of the tariff order: which countries are excluded, which products are excluded and how the process is supposed to work.

"We consider [the training] extremely important, the reason being first and foremost to make sure that the trade laws of the United States are fairly and effectively enforced," said Robert W. Bilheimer, a spokesman for Bethlehem, which employs about 3,400 in Baltimore and which filed for Chapter 11 protection in October 2001. "Since it is a very complex situation, without training there is a likelihood that trade laws could be misapplied if customs officials do not know what standards to apply."

According to the American Iron and Steel Institute, in the first eight months of the year - the latest figures available - about 20.6 million tons of steel were imported into the United States, up about 4.5 percent from the first eight months of last year.

Much of the steel that is subject to tariffs is carbon-based, Mosser said, so sometimes foreign producers will label their steel as an alloy product instead. "If customs doesn't pick up on it, you've beat the duty," Mosser said.

Customs has the option of holding the shipment until a lab test can be completed, although Mosser conceded that the process is time consuming and almost never happens.

The agents will also be encouraged to look for shifts in imports, such as a country that has never exported cold-rolled steel before suddenly shipping large quantities of the product.

"If all of a sudden you get a bunch of cold-rolled steel from Saudi Arabia and they've never shipped it before, hypothetically, and you find out there is no mill in Saudi Arabia that can make the product, then somebody is trying to pull the wool over your eyes," Mosser said.

A spokeswoman for the Customs Service said no one was available to comment on the training program.

The American Institute for International Steel, which represents foreign producers, said it is supportive of the training but is a "little leery" of it.

"Our enthusiasm is tempered given [the American Iron and Steel Institute's] possibility of using the training for its own propaganda purposes," said spokesman Paul Nathanson. "They have never shied away from making political points on what should be technical issues, but I'm not saying they have done that" here.

Mosser said that, while domestic producers indeed have their own agenda, he keeps the training as fact-based as possible. "We do not spend half the seminar screaming and complaining about illegal imports."

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