ITC recommends tariffs on most steel, but stainless largely exempt

Stainless steel sheet and strip was exempted from the ITC investigation, under section 201 of U.S. trade law, as the result of a successful petition made by NAFEM last March when the Bush Administration was developing request for ITC action.

In a letter to the Office of Special U.S. Representative for Trade and to the Department of Commerce, NAFEM Immediate Past President John Nackley, CFSP, pointed out that imports of stainless steel sheet and strip had not risen in the past year, and most importantly, that past quotas or tariffs had damaged the international competitiveness of this successful, export-oriented industry.

In addition to most carbon steel, the ITC has recommended duties of 15 to 20 percent in the first year of relief, scaling down in subsequent years, on stainless steel bar, stainless steel rod, and stainless fittings and flanges. However, the ITC voted against recommending import duties on stainless plate.

While the food equipment industry is not greatly impacted by this immediate case, we need to be vigilant. Steel industry supporters in Congress have introduced legislation calling for quotas on all steel products, including stainless. While the ITC recommendations for additional tariffs probably mean no action will be taken on that proposal, the worsening situation of the steel industry means protectionist pressures will remain.

Commenting on the ITC case, the Specialty Steel Industry of North America, the trade association of stainless steel producers, cautioned that “other industry sectors, such as flat-rolled products, are struggling with imports in this weak economy. We will continue to monitor the actions of foreign producers and take action as necessary.”

The Bush Administration also is attempting to forge international agreements to reduce excess capacity, and therefore over production in the worldwide steel industry, thereby reducing the temptations to sell steel overseas below domestic costs. These negotiations focus on carbon and steel where over-capacity is most pronounced.

NAFEM also is continuing efforts, in conjunction with the Consuming Industries Trade Action Coalition (CITAC), to obtain changes in U.S. trade laws to ensure that users of imported materials, such as steel, have a full opportunity to present their case in any future trade cases taken before the ITC. At present only the complaint – usually the U.S. steel producer – and the foreign supplier are parties to these cases. The economic effects on steel-using companies and industries are essentially ignored.

As a member of CITAC, NAFEM is helping Congressman Jim Kolbye (R-AZ) obtain additional co-sponsorship for H.R. 2270, the legislation he has introduced that would give steel-using industries full standing in ITC cases. Current co-sponsors are Jim Moran (D-VA) and Jim Ramstad (R-MN), NAFEM members should urge their Congressmen to co-sponsor this legislation to allow NAFEM or its members to participate in any future ITC action concerning stainless steel sheet and strip.