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Section 201 Tariff Remedies Have Harmed U.S.
Steel Consuming Manufacturers
Market conditions in the U.S. have worsened considerably for steel
using manufacturers since the steel import restrictions were imposed
in March 2002. These conditions are clearly due, at least in part,
to the steel 201 tariffs.
- Steel prices in the U.S. have dramatically increased.
Prices of benchmark steel products (especially flat-rolled prices)
have soared 30 to 50% this year-far more than domestic producers
predicted during the Section 201 investigation. The Section 201
tariffs have greatly exacerbated the situation.
- U.S. steel producers cannot meet domestic demand for steel.
U.S. steel producers have broken contracts with U.S. steel consumers,
put their long-standing customers on allocation, and have turned
away new business. As a result, a number of steel consumers report
that they will run out of steel before the end of July.
- U.S. steel consumers are being forced into the volatile spot
market.
The fact that U.S. steel producers are reneging on firm contracts
with U.S. consuming industries means that purchasers are forced
into the volatile spot market, which is being buffeted by huge price
increases. As a result, steel consumers have experienced greater
price increases, as well as greater uncertainty in supply.
- U.S. steel using manufacturers cannot count on reliable steel
supplies at globally competitive prices.
Many U.S. steel-consuming industries will run out of current steel
availability by the end of July and they have no assurance that
they will be able to obtain new steel supplies after that date.
Even if companies are fortunate enough to obtain steel, they have
no idea whether they can get steel they need at globally competitive
prices, because steel producers are refusing to make advance commitments
regarding pricing. Steel consumers cannot commit to pricing or availability
for their customers, which in turn is leading customers to look
offshore for their steel-containing products.
- The Section 201 remedy is harming the international competitiveness
of U.S. steel-using industries.
Steel prices have gone up in several global markets, but not as
much as the U.S. As a result, the price for steel in the U.S. greatly
exceeds the price in foreign markets. The gap is widening. Steel
consumers have lost business to foreign competition that has a built-in
cost advantage and will continue to do so as customers look to foreign
suppliers as a way to control costs. Jobs of American workers are
at risk.
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