CITAC: COLD-ROLLED CASE POTENTIAL DISASTER

72% of cold-rolled imports could be subject to both 201 and antidumping duties

Washington, DC - Member companies of The Consuming Industries Trade Action Coalition (CITAC) are concerned that despite high prices, decreased imports, and tight supplies for steel, the U.S. International Trade Commission (ITC) could decide to impose more penalty duties when it takes its final vote in the cold-rolled steel antidumping case on August 27.

The dumping and countervailing duties on cold-rolled steel, if affirmed by the ITC, would come on top of the 30 percent Section 201 tariffs imposed last March. The cold-rolled antidumping case against 20 countries was filed by the domestic industry during the Section 201 investigation, which also included cold-rolled steel products. "The domestic industry requested 40 percent tariffs in the 201, while holding this case on the back burner to push for additional duties," said Jon Jenson, CITAC's President. "It's unbelievable the way the domestic steel industry has made American steel-using manufacturers the victims of these repetitive trade actions."

Using the most current full-year figures for 2001, approximately two million short tons of imported cold-rolled steel would be affected by both the Section 201 and antidumping duties. This represents approximately 72 percent of all cold-rolled imports. However, all cold-rolled steel in the market has already been affected, whether imported or domestic, through domestic mills breaking contracts to force price increases, placing customers on allocations, and allowing lead times to triple. The 201 alone has resulted in prices of cold-rolled material shooting up about 70 percent since March.

Unlike the 201 tariffs, which must be reevaluated in September 2003, dumping duties last for at least five years. The preliminary duties proposed by the Department of Commerce for major imports of cold-rolled steel would in some cases (Japan) exceed 100 percent. According to Jenson, "If the ITC votes for duties on the 27th, they guarantee an end to cold-rolled imports to the U.S. No one will ship at those rates of duty and the U.S. steel industry can create a solid, long-term tariff wall against most cold-rolled imports."

CITAC Counsel Lewis Leibowitz agreed. "Considering that the U.S. market needs imports of cold-rolled steel to satisfy domestic demand, compounding these tariffs is a disaster for American manufacturers."

Cold-rolled steel is used in a variety of applications including automotive, construction, container, appliance, and electrical equipment manufacturing. Almost all metallic components or parts used in industrial products both at home and in the office are manufactured from cold-rolled steel.

Jody Fledderman, President of Batesville Tool & Die in Batesville, Indiana says the 201 has "created real concern" among steel-using companies. "We just can't do business the way we used to, and it's no fault of our own. We can't get the steel we need, we can't rely on pricing for more than a month at a time, and now the supply that is already uncertain could be cut off entirely. I'm afraid there is an enormous lack of understanding in Washington, DC about what companies are experiencing in places like Batesville, Indiana."

Though cold-rolled imports have significantly declined, from 34,012 short tons in April 2002 to 6,445 short tons in June, and even with significant price increases for cold-rolled steel, steel users worry the domestic industry will rely on political pressure from Congress to influence the vote. "Remember Members of Congress threatening to cut the ITC's funding when it rejected a cold-rolled case in 2000? The possibility of a finding of injury now, despite the merits, is very real. There is a very, very high intimidation factor involved here," continued Jenson.

CITAC is a coalition of companies and trade associations representing the interests of American consuming industries in the trade policymaking process. CITAC's mission is to promote a trade arena where U.S. consuming industries and their workers have access to global markets for raw materials and other imports that enhance the international competitiveness of U.S. firms.

For more information on CITAC, please visit WWW.CITAC.INFO.