Steep tariffs announced on many steel products; stainless sheet and strip remain exempt

Stainless rod and stainless bar are subject to tariffs of 15 percent the first year, 12 percent the second year, and 9 percent the third year. Tariffs on stainless wire will be 8 percent all three years.

The Consumer-Industry Trade Action Coalition (CITAC), of which NAFEM is a member, expressed dismay over the decision. The dismay came despite opposition from some members of the Bush Administration and a wave of editorials, from the Wall Street Journal to the New York Times, pointing out there are far more employees at steel-using firms than at steel manufacturers. Bob Wilbur, NAFEM vice president for Government Relations, assisted CITAC members at a meeting March 13 in Washington in which small manufacturers using steel products included in the tariff decision reiterated to their Congressmen that these tariffs will make them less competitive with foreign manufacturers, thus resulting in job losses and, in some cases, complete failure of the steel-using firms.

In an off-the-record speech which leaked to the press, Treasury Secretary Paul H. O’Neill was reported to have a stated belief that the decision risked more hobs in steel-using industries than it would protect among steel manufacturers. More economists believe that the old-line coke-and-iron-ore steel manufacturers are so far from being competitive with newer plants, both domestic and foreign, that the tariffs will only stretch out their demise.

While applauding the tariffs, the Congressional steel caucus has turned its efforts to promoting a bill which would put a 1.5 percent tariff on all steel sold in the United States. These funds would be used to support pension and healthcare costs for steelworkers whose firms have gone out of existence. NAFEM has joined CITAC in opposing this bill, which would target steel users with costs of change in the national economy for which they have no responsibility.

NAFEM does not expect this bill, nor others introduced by members of the steel caucus that would put quotas on all steel, including stainless sheet and strip, to move in Congress this year. Next year is less certain. There also is some speculation that the stainless industry, encouraged by recommendation of the ITC on the cases just decided, might itself initiate a similar action, including stainless sheet and strip, next year. NAFEM will be watching this situation closely.