STEEL INDUSTRY Caucus concludes tariffs are working

The steel industry is not out of the woods yet, a steel official said.
By JIM GERAGHTY
STATES NEWS SERVICE
WASHINGTON -- When the Congressional Steel Caucus met Thursday to review the International Trade Commission's report on steel tariffs and their impact so far on domestic producers and consumers, there was not a wide variety of opinions in the room.
The unanimous message from lawmakers from steel-heavy districts, industry executives and union representatives was clear: The tariffs are working and giving the hurting industry time to get back on its feet.
"The ITC report confirmed what many of us had predicted for some time -- that President Bush's steel policy is working, and steel consumers on the whole have not suffered as a result of the steel safeguard," said Caucus Chairman Phil English, a Republican from Erie.
Commerce Department officials have made comments indicating they're wavering on whether to recommend the tariffs stay in place until their expiration date in 2005. In March 2002, President Bush imposed the tariffs, ranging from 8 percent to 30 percent, on certain types of foreign steel, contending that domestic steel producers needed time to consolidate their operations.
Continuing relief
Members of Congress who represent districts and states with heavy manufacturing are strongly pushing the White House to lift the tariffs.
But steel industry executives said that move would be akin to ending the medication of a sick person as soon as there were signs of improvement.
"The answer to the question, where do we go from here, is a simple one," said Wilbur L. Ross, chairman of International Steel Group. "Continuation of relief will provide the industry with the time it needs to complete the process of adjusting to import competition. Many investments made to restore the industry to global competitiveness were premised on the full three-year period of relief that the President originally called for."
He pointed to his company's purchases of Bethlehem Steel, LTV and Acme Steel LTV as examples of consolidation in the industry.
Still uncertain
William J. Kleinfelter, legislative and political director of the United Steelworkers of America, said that the ITC report revealed that the steel industry is not out of the woods yet.
"While domestic producers have moved to restructure and consolidate capacity, the ITC's report recognizes that there remains enormous excess steel-making capacity in foreign countries -- approximately 200 million tons of overcapacity," Kleinfelter said. "Such overwhelming overcapacity would undoubtedly flood back into the U.S. market if the Section 201 relief [the tariffs] were to be prematurely terminated."
The lawmakers seemed optimistic that a combination of their efforts and political realities are likely to convince Bush to keep the tariffs.