U.S. Extends Tariffs on Steel of 19 Nations : Trade: Domestic producers hail anti-dumping action. Exporters’ lobby warns of price pressure.
In a victory for American steel producers, the Commerce Department on Tuesday extended temporary import penalties on 19 foreign steelmakers accused of selling an estimated $3.2 billion worth of the metal in the United States last year at unlawfully low prices.
As a result of the ruling, the Customs Service will collect payments from the offending steelmakers equal to their estimated “dumping” margins--the difference between what the importers charged and U.S. market prices.
Those penalties, which go as high as 109% of the dumping margin, will be permanently imposed as higher import tariffs later this year if the federal International Trade Commission finds that the foreign steel “materially injured” the domestic steel industry. The ITC’s decision is expected within 45 days.
The specter of higher tariffs could lead to higher domestic prices and would slow the importing of steel, a major element of automobiles and large appliances such as washers and refrigerators.
Wall Street saw the Commerce Department’s action as good news for U.S. steel companies, whose stock prices generally rose on the announcement.
“There’s no question that Europe and Japan were dumping steel on our country; this will be the first time the American steel industry will be on a level playing field in 20 years,” said J. Clarence Morrison, a steel analyst at Prudential Securities Research in New York.
Morrison said he expects steel imports to decline to 12.5 million tons this year--from 17.1 million tons last year--as a result of the decision.
Cited in the anti-dumping cases are Argentina, Australia, Austria, Belgium, Brazil, Canada, Finland, France, Germany, Italy, Japan, South Korea, Mexico, the Netherlands, Poland, Romania, Spain, Sweden and Britain.
The American Institute for International Steel, a trade group representing major importers, warned in a statement Tuesday that higher import duties could cost American consumers $1.5 billion annually in the form of higher prices. The group also said that for every job retained in the U.S. steel industry because of the higher tariffs, three jobs in the United States will be lost because employers who use steel will have to cut their payrolls due to the higher prices.
Commerce Secretary Ronald H. Brown said in a statement that the investigations were conducted in a “fair and transparent manner” and took into account comments from domestic and foreign producers.
“The Administration fully supports the rights of the domestic industry to obtain relief from unfair trade practices under U.S. law and will make certain that these laws are enforced in a fair and effective manner,” he said.
The Commerce Department’s decision follows two preliminary rulings that a dozen nations unfairly subsidized steel exported to the United States and that 19 of them were dumping steel on the U.S. market.
Although the duty margins issued by the department are much more punitive than those preliminary rulings, the harsh penalties will have little bearing on the outcome of the ITC’s review of the dumping charges, experts say.
“The domestic producers are betting that the ITC is going to find an injury determination, and the foreign (producers) are hoping against hope that it will go the other way,” said Peter Scolieri, editor of American Metal Market, a trade publication. “But I don’t think anyone can say what will happen before the ITC.”
