U.S. Imposes Punitive Tariffs on Steel Imports; Backlash Feared

Under pressure from U.S. steelmakers and labor unions, President Clinton on Friday imposed punitive tariffs on steel imports in a move that could increase trade tensions between the United States and major steel- producing nations such as Brazil, Japan and South Korea.

The White House said the tariffs will apply to imported steel wire rod, which is used to make hangers, cables and fasteners, and imported line pipe.

The duties--increased by 10% for wire rod and 19% for line pipe--will remain in place for three years and aim to help U.S. firms hard-hit by low-cost imports, chiefly from Asia, the White House said.

The decision, delayed for months by a divided U.S. administration, could spark a backlash by the world’s major steel producers.

Japan’s trade minister had warned that an increase in steel wire rod tariffs could spark a protectionist backlash and undermine U.S.-Japan market-opening efforts.

The European Union, a major producer of wire rod, had also urged Clinton to show restraint in the highly politicized case.

U.S. steelmakers welcomed the decision, though they had pressed for even higher duties.

“There’s been a bloodletting in the market. The companies have been beat up. Employment has been very severely impacted,” said Charles Verrill, attorney for the steelmakers in the wire rod case. “I would have preferred more, but 10% I’ll take.”

Labor unions, traditionally allied with Clinton’s Democratic party, had pressured the president and Vice President Al Gore to rein in steel imports, particularly from Japan.