Hard-Pressed US Manufacturers Call For Steel Export Taxes

by Leroy Baker, Tax-News.com, New York

15 March 2004

Small US businesses being crippled by the high price of steel are urging Congress to place a tax on steel exports.

"With these types of (price) increases and (supply) shortages, it will be a matter of weeks before some companies go out of business," said Barbara Hemme, controller of an Illinois-based vacuum furnace manufacturer, in testimony to the House Small Business Committee last week.

"An immediate tax on scrap and steel exports would help keep some of the steel here in the United States," she added. "We cannot afford to have all our raw materials shipped to China."

The price of flat-rolled steel has almost doubled over the last year to around $600 per ton, although this is in part due to the increase in price of raw materials used to make steel, such as coal and coke according to analysts. Also, whilst steel prices in the US are amongst the highest in the world, experts are suggesting that the current price hike will be short-lived, and many forecast the market will peak in the coming months before falling back.

The manufacturers' plea comes only a matter of weeks after the United States abolished tariffs on steel imports in the face of much international pressure.

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