Ailing U.S. steel industry gets boost from Commerce

It is encouraging to see the Bush administration move so quickly to halt the dumping of foreign steel in the United States. While former President Bill Clinton bobbed and weaved when faced with demands from domestic steel producers to punish foreign manufacturers, President Bush is showing a willingness to enter the fray.
Hence, a ruling Monday by the Commerce Department that penalties should be imposed on foreign steel manufacturers that are subsidized by their governments. Companies in India, Indonesia, South Africa and Thailand are being targeted and the preliminary order allows the Customs Service to collect fees ranging from 1 percent to 34 percent of the value of the hot rolled steel the foreign companies export to the U.S.
While it is too early to tell whether this action will result in any financial benefit to the 20 U.S. companies, including several in Ohio, that have been hurt by the dumping, the mere fact that the Bush administration is moving so expeditiously sends a clear message to those countries that have shown no willingness to change their cheating ways.
Escrow account: The fees would be placed in escrow until a final decision is made by the Commerce Department and the U.S. International Trade Commission, which is also reviewing the matter. The commission could well overturn the Commerce Department's ruling. If it does, President Bush, in conjunction with Congress, should find other ways of forcing foreign steel manufacturers to play fair.
We have long argued in this space for federal action, not because we believe in trade protectionism, but because the facts support the domestic steel industry's contention that foreign steel is being sold in the U.S. at prices that are artificially low. Foreign governments subsidize the manufacturers, which is how they stay in business.
The numbers speak for themselves: Almost 40 million tons of steel were imported last year, a 12 percent increase over 1999 and just shy of the record 41.5 million tons brought in three years ago.
Job loss: There are very real consequences to this flood of foreign steel: Since 1990, the number of U.S. steel workers fell from 124,500 to 81,000.
Mahoning Valley residents don't have to look very far to see what has happened to the U.S. steel industry. CSC Ltd. of Warren is currently in bankruptcy court trying to keep its doors open and Cleveland-based LTV Steel Co. Inc.. which is also in bankruptcy court, has announced the closing of a Cleveland plant.
No one is suggesting that the problems confronting American steelmaking have all been caused by foreign manufacturers flooding the market with low-priced products, but so long as the playing field is uneven, U.S. producers will be at a disadvantage.