Keep tariff, say steelmakers

Automakers seeking end of levy

October 12, 2006|By Detroit Free Press

WASHINGTON -- U.S. steelmakers struck back this week against a push by the six largest automakers that assemble vehicles in the United States to end tariffs on certain types of imported steel. They warned that thousands of steel-making jobs could be at risk if the tariffs are lifted.

The U.S. International Trade Commission will hear arguments as to whether tariffs on corrosion-resistant steel from six countries should end. The tariffs have been in place since 1993, after the steel industry accused foreign producers of dumping their products in the United States.

The automakers - General Motors Corp., Ford Motor Co., DaimlerChrysler AG, Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. - and their suppliers contend the domestic steel industry has returned to profitability, making the tariffs ranging from 10 percent to 30 percent unnecessary. Corrosion-resistant steel is the main type of steel used in vehicle frames and many parts.

Stand Up For Steel, a coalition of steelmakers and the United Steelworkers union, launched an ad campaign on Tuesday with the headline "Don't Let America's Steelworkers Get Run Over By Auto Companies."

Steel industry executives said without the tariffs, imported steel would flood the market again and punish U.S. steelmakers who have slim profit margins. They also contend that GM, Ford and DaimlerChrysler fight to sustain their own trade protections, namely the tariff on imported pickups, and complain a weak Japanese yen boosts their competitors.

"It is outrageous to us that the auto industry in this case would be supporting unfair trade," said Terrence Straub, senior vice president for public policy and governmental affairs at U.S. Steel. "We should all be working together to save American manufacturing."

Steelmakers note that the steel in question accounts for about $400 in value on the average vehicle built in the United States, and most of the auto companies that oppose the tariff have been making sizable profits on the vehicles they build with that steel.

"There's just finally a bit of breathing room," said Tom Conway, international vice president for the United Steelworkers. "For the auto industry and others to step in and say we should go back to the days of dumping seems completely foolish."

The move by the auto companies, the first time they have united on a trade issue, occurred as steel prices hit 18-month highs.

"None of the recent performance by the U.S. steel industry supports continuing the protections," said GM spokesman Greg Martin. "Their profit and price increases have exponentially outpaced any other performance, whether it's the auto industry or durable goods."

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