Global Fastener News

ITC Releases Midterm Review on Steel Tariffs

Jason Sandefur

The steel tariffs imposed by President Bush in 2002 negatively impacted the economy, according to the U.S. International Trade Commission�s midterm review of the trade remedy. However, the ITC also concluded the 201 tariffs helped steelmakers restructure without �drastically harm(ing) small steel consumers,” the Washington Times reported. In a finding that could help the White House retain the tariffs, the ITC claimed that “a majority of steel-consuming firms indicated that neither continuation or termination of the safeguard measures would change employment, international competitiveness, or capital investment,” the Times reported.
Bush is expected to use the review to help decide whether to uphold, modify or repeal the three-year tariffs.

The review found that steel safeguards resulted in increased prices and a net loss to United States businesses of some $680 million in decreased returns on capital and labor in steel consuming industries. Nearly half the 485 questionnaire responses reported significant declines in the availability and quality of steel in the year following the imposition of the tariffs. Nearly one-quarter of responding firms reported that their customers shifted to offshore sourcing in the first year of the tariffs (37 percent of metal fabricators reported this shift).

While steel producers have called on the president to maintain the tariffs for a full three years, steel consumers urge Bush to repeal the protections immediately.
“What the president did is, he completely disrupted the market overnight,” Mike Lynch, vice president of government affairs for Illinois Tool Works, told the Times. “From our perspective the problem wasn’t price, it was availability, chemistry and quality. In some cases we’re still not finding the quality we need.”

The Consuming Industries Trade Action Coalition, formed to fight the tariffs, welcomed the ITC�s report.
“The report confirms what we have been saying for a year and a half: small steel-consuming manufacturers are being forced to lay off workers and move production out of the U.S. because of the higher cost and reduced availability of steel. Many thousands of jobs have been lost, and the economy as a whole has been damaged,” said William E. Gaskin, CITAC STF Chairman and President of Precision Metalforming Association.

Lewis Leibowitz, Counsel to the CITAC Steel Task Force, said eliminating the protection would boost domestic manufacturing.
�Removing the steel tariffs is a real solution to stem the flow of manufacturing outside the country and to help the economy.”

The ITC report is available at usitc.gov. �2003 FastenerNews.com