CITAC STEEL TASK FORCE: DOMESTIC STEEL PRODUCERS'
BID TO EXPAND STEEL TARIFFS ANOTHER ATTEMPT
TO CLOSE U.S. MARKET TO IMPORTS

Move Shows That No Amount of Protection
Will Satisfy the Protectionists in the US Steel Industry

Washington, DC - The Consuming Industries Trade Action Coalition Steel Task Force (CITAC STF) submitted a letter today to US Trade Representative Robert Zoellick and Commerce Secretary Donald Evans urging the Bush Administration to reject a recent request by seven U.S. steel producers to expand the Section 201 tariffs to include 30 developing countries plus Mexico, and requesting the Administration examine the impact that the tariffs have had on steel consumers in the U.S.

In the letter signed by its counsel Lewis Leibowitz and Lynn Kamarck, the CITAC STF stressed that the existing tariffs have already caused severe damage to U.S. downstream industries. "The competitive impact on steel consuming industries is clear and simple: while steel imports are restricted, imports of steel-containing manufactured goods are not. Many U.S. manufacturers have lost considerable business to foreign competitors who have access to lower-priced steel that is available in international markets, but is now denied to U.S. manufacturers."

"The Administration should not further restrict imports without full consideration of the effects of such restrictions on U.S. manufacturers, including steel consuming industries," continued Leibowitz and Kamarck. "Such an analysis is not only essential for downstream U.S. manufacturers; it is also essential to safeguard the customer base for U.S. steel producers. Apparently oblivious to the effects of their efforts on their own customers, U.S. steel producers are rapidly undermining their own future by urging ever-higher prices."

Last week, the domestic steel industry submitted a letter to Ambassador Zoellick and Secretary Evans, using skewed statistics in an attempt to make it appear that steel imports from developing countries and Mexico — exempted from the Section 201 tariffs by President Bush — are "surging."

A closer look at the statistics submitted by the domestic steel industry reveals that slab (semifinished) products are conveniently excluded from total imports of flat-rolled products even though the International Trade Commission (ITC) and President Bush included slab products in the flat-rolled category during the Section 201 process.

"It's obvious why the domestic steel industry omitted slabs," William Gaskin, President of the Precision Metalforming Association (PMA) and member of CITAC STF. "Developing countries on the list don't export much slab to the U.S. When imports are totaled using all flat-rolled imports including slabs, the percentage of import share from these developing countries is actually much lower — proving there is no 'surge of imports' and therefore no evidence for additional tariffs."

Said Gaskin, "In their letter, U.S. producers also blame developing country imports for falling prices in recent months and reduced capacity utilization, ignoring the fact that several dormant domestic steel mills have been restarted since the 201 tariffs, adding 8.5 million tons of steel production into the U.S. market."

Gaskin continued, "The tariffs imposed last year led to huge price increases, supply disruptions and massive business and financial losses to steel consumers. Many downstream industries are going out of business, or being forced to move overseas, causing Americans to lose their jobs. Attempting to expand tariffs to developing countries isn't going to solve the domestic steel industry's biggest problem: their refusal to compete in the global marketplace."

Gaskin pointed out that the Bush Administration last week rejected proposed quotas to limit imports of mechanical devices from China after considering the estimated damage it would cause downstream industries.

"As with the recent case on mechanical devices, the Bush Administration should consider the needs of steel consumers in formulating steel trade policy." He concluded, "We ask that the Bush Administration direct the U.S. International Trade Commission (ITC) to gather evidence of the impact of the Section 201 steel tariffs already in place on both steel producers and steel consumers."

To read the text of the letter submitted today by the CITAC STF, please visit www.citac.info/steeltaskforce/currentnews/01_22_2003.php.

CITAC is a coalition of companies and organizations committed to promoting a trade arena where U.S. consuming industries and their workers have access to global markets for imports that enhance the international competitiveness of American firms. The CITAC Steel Task Force is comprised of steel consumers working to achieve the termination of the 201 steel tariffs by mid-point review and reform U.S. trade laws and policies to benefit steel consumers.