President Announces Temporary Safeguards for Steel Industry

Ending heavy lobbying by the U.S. steel industry, President George W. Bush announced temporary tariffs to be imposed on a host of steel products from a number of countries that have been accused of dumping various steel products into the United States.

In a statement by the President, the issue of free trade was a cornerstone of the decision.

“An integral part of our commitment to free trade is our commitment to enforcing trade laws to make sure that America's industries and workers compete on a level playing field. Free trade should not mean lax enforcement. Consistent with this commitment, last June I launched a three-part initiative designed to restore market forces to world steel markets. This initiative includes international discussion to encourage the reduction of excess global steel capacity and negotiations to eliminate market-distorting subsidies that led to the current glut of capacity. I also called upon the United States International Trade Commission (ITC) to investi-gate the impact of imports on the U.S. steel industry under section 201 of the 1974 Trade Act. The ITC subsequently found that increased steel imports are a substantial cause of serious injury to our domestic industry.

“Today I am announcing my decision to impose temporary safeguards to help give America's steel industry and its workers the chance to adapt to the large influx of foreign steel. This relief will help steel workers, communities that depend on steel, and the steel industry adjust without harming our economy. “

While issuing temporary tariffs, President Bush also called for the domestic steel industry to make changes to remain a viable, competitive entity going forward.

“The U.S. steel industry must use the temporary help today's action provides to restructure and ensure its long-term competitiveness. Restructuring will impact workers and the communities in which they live, and we must help hard-working Americans adapt to changing economic circumstances. I have proposed a major expansion of the National Emergency Grants program to assist workers affected by restructuring with effective job training and assistance. I have also proposed direct assistance with health insurance costs that will be available to workers and retirees who lose their employer-provided coverage. And I support coordinated assistance for communities and a strengthened and expanded trade adjustment assistance program. America's workers are the most highly skilled in the world, and with effective training and adjustment assistance we will help them find better, higher paying jobs to support their families and boost our economy.”

Components of the decision are the following

* Flat Products: A tariff of 30 percent will be imposed on imports of plate, hot-rolled sheet, cold-rolled sheet, and coated sheet. This remedy provides substantial relief for the sector of the industry that has been hardest hit by imports and which is the anchor for many struggling U.S. companies. This tariff is higher than the 20 percent tariff recommended by the plurality of ITC commissioners. The higher tariff enhances the ability of U.S. producers to adjust to import competition without placing an undue burden on U.S. steel consumers or on the country as a whole.

* Tin Mill Products: A tariff of 30 percent will be imposed on imports of tin mill products. The ITC commissioners were evenly divided as to whether imports were a substantial cause of serious injury to the domestic industry. As permitted by the statute, the President has decided to treat the commissioners? findings as an affirmative determination, and has therefore decided that relief is appropriate. A tariff of 30 percent is appropriate for the same reasons that such a tariff is appropriate for other flat products.

* Hot-Rolled Bar and Cold-Finished Bar: A tariff of 30 percent will be imposed on imports of hot-rolled bar and cold-finished bar. This tariff is higher than the 20 percent tariff recommended by the plurality of ITC commissioners. The higher tariff enhances the ability of U.S. producers to adjust to import competition without placing an undue burden on U.S. steel consumers or on the country as a whole.

* Rebar: A tariff of 15 percent will be imposed on imports of rebar. This tariff is higher than the 10 percent tariff recommended by the plurality of ITC commissioners. The higher tariff enhances the ability of U.S. producers to adjust to import competition without placing an undue burden on U.S. steel consumers or on the country as a whole.

* Certain Tubular Products: A tariff of 15 percent will be imposed on imports of certain welded tubular products. This tariff will provide a higher level of relief than the tariff-rate quota recommended by a majority of ITC commissioners.

* Carbon and Alloy Fittings and Flanges: A tariff of 13 percent will be imposed on imports of carbon and alloy fittings and flanges. This tariff is equal to the tariff recommended by the plurality of ITC commissioners. This tariff is sufficient to facilitate industry restructuring without unduly burdening U.S. steel consumers or the country as a whole.

* Stainless Steel Bar: A tariff of 15 percent will be imposed on imports of stainless steel bar. This tariff is equal to the tariff recommended by the plurality of ITC commissioners. This tariff is sufficient to facilitate industry restructuring without unduly burdening U.S. steel consumers or the country as a whole.

* Stainless Steel Rod: A tariff of 15 percent will be imposed on imports of stainless steel rod. This tariff is lower than the tariff recommended by the three commissioner plurality. Given the conditions prevailing in the domestic stainless steel market, this tariff is sufficient to facilitate industry restructuring without unduly burdening U.S. steel consumers or the country as a whole.

* Stainless Steel Wire: A tariff of 8 percent will be imposed on imports of stainless steel wire. The commissioners were evenly divided as to whether imports were a substantial cause of serious injury to the domestic industry. As permitted by the statute, the President has decided to treat the commissioners? findings as an affirmative determination, and has therefore decided that relief is appropriate. This tariff is sufficient to facilitate industry restructuring without unduly burdening U.S. steel consumers or the country as a whole.

* Slab: Imports of slab will be subject to a tariff rate quota (TRQ). The in-quota volume will be set at 5.4 million short tons. The out-of-quota tariff will be 30 percent. A majority of ITC Commissioners recommended a tariff-rate quota on slab, with an in-quota volume roughly equivalent to imports in 2000 and an out-of-quota tariff of 20 percent. Slab is an input for a key segment of the domestic industry. Given market circumstances, including the level of current demand, the TRQ announced today is sufficient to ensure continued access to slab without undermining the relief applied to other flat products.