Steel Producers React Angrily To US Import Tariff Decision

by Mike Godfrey, Tax-News.com, Washington

07 March 2002

The decision made by the Bush administration to impose import tariffs of 25% on flat-rolled steel, and between 8% and 30% on other steel products, has been widely condemned by the global business community, with the EU, Australia, Japan, and Korea all indicating that they intend to take the matter before the World Trade Organisation (WTO).

The US steel industry had demanded a 40% import tariff on all steel products over a four year period, in order to protect the domestic industry, and there have been complaints that the action taken by President Bush was not firm enough. However, his decision has provoked howls of outrage from the steel sectors in several of the US's trade partners.

When the US President visited Japan last month, all talk of trade issues was studiously avoided, with discussions centring instead on structural reforms to help revive the ailing Japanese economy. However, the country- which is the world's second largest steel producer, and the United States' top trading partner in steel- expressed its anger earlier this week.

'If safeguards are implemented, we will thoroughly examine the background and discuss the issue with affected countries, and consider what steps to take including bring it to the WTO,' Vice Trade Minister Katsusada Hirose commented on Wednesday.

Speaking on behalf of the Korea Iron and Steel Association, head of the Trade Department, Kim Sung-woo said that Korea was also considering filing a complaint with the WTO, and a spokesman for China Steel, Taiwan's top steel producer expressed grave concerns that the move could spark 'trade friction' on a global level.

The reaction to the US import tariff decision in Europe was no less heated, with EC President Romano Prodi, and Trade Commissioner Pascal Lamy both threatening retaliatory action.

However, there are several exemptions from the new protective measure, which will come into effect on March 20. The Bush administration revealed earlier this week that Canada, Mexico, and developing economies such as Argentina, Thailand and Turkey will not be subject to the punitive import tariff.

Recommended