WARREN WCI Steel fights trade exemptions

Seven of the foreign steel types granted tariff exemptions will have a negative affect on WCI.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WARREN -- Three months ago WCI Steel officials were effusive in their praise of President Bush's steel tariff plan.
Now, 224 exemptions later, the honeymoon is over.
WCI spokesman Tim Roberts said the Bush administration has approved three rounds of exemptions for different types and grades of imported steel, and seven of them will have a direct effect on the Warren integrated steelmaker.
WCI has joined with other steel producers in lobbying against the exemption requests. "In general, we feel like we're seeing a gradual disintegration of the Section 201," he said, referring to the tariff package. "None of the exemptions are major products for us, but they add up over time."
This week, for example, the Commerce Department and the Office of the United States Trade Representative approved 116 exemptions for foreign steel products.
Among those, Roberts said, was an exemption for silicon electrical steel slabs, which are used in electrical transformers, motors and generators. The first 8,000 tons of silicon electrical steel imports will not be subject to tariffs under the exemption.
U.S. companies affected
WCI and AK Steel in Middletown, Ohio are the two largest domestic makers of silicon electrical steel, Roberts said, so WCI was among the steel representatives lobbying against the exemption.
Silicon electrical steel is a small, niche market for WCI, so the exemption will not be a major blow, Roberts said.
"It's not a big chunk, but it's a profitable chunk of our business. It's a growth market for us," he said. "In our thinking, it's probably the exemption which will affect us the most."
The Commerce Department generally makes exemptions when officials determine that the United States does not make enough of a particular product to satisfy domestic demand.
The latest round of exemptions included grades of stainless steel bar, stainless steel wire, welded pipe and tube and both hot-rolled and cold-rolled steel. Decisions on more exemptions are expected before next Wednesday and in October.
Trading partners object
Tariffs the Bush administration approved in March were designed to protect the beleaguered U.S. industry from a flood of imports that left thousands jobless and helped to push more than 30 U.S. steel companies into bankruptcy.
However, some U.S. trading partners, including Japan and the European Union, have objected to the tariffs and threatened to impose retaliatory tariffs on U.S. products.
Roberts said the silicon electrical steel exemption and many others might have been granted as part of an attempt to compromise with those foreign trade partners. "There's a lot of politics involved," he said.
vinarsky@vindy.com