US Grants Exclusions To Steel Tariffs

by Mike Godfrey, Tax-News.com, New York

11 April 2002

After meeting Laurent Fabius, French finance minister, Paul O'Neill, US Treasury secretary, said that the US was likely to grant additional exclusions from its tariffs imposed last month on various types of steel import. "I think as some of these exemption requests are processed that the shrillness of this conversation will be reduced," he said.

In March, the US administration imposed import tariffs on many steel products, including an average 25% on flat-rolled steel, which accounts for more than half the value of all steel imported into the US, and between 8% and 30% on other steel products.

From the beginning there were a number of exemptions from the new tariffs, including NAFTA partners Canada and Mexico and developing countries such as Argentina, Thailand and Turkey. BHP, the Australian minerals company, was last Friday granted the largest exemption yet after John Howard, Australian prime minister, lobbied Mr Bush. The exclusion, which allows the shipment of hot-rolled steel to the US west coast, covers about 75% of Australia's A$450m ($235m) steel sales to the US, according to an Australian trade official.

The exclusion process is a normal one when new import tariffs are imposed. But the steel exclusions have become subject to high-level political lobbying by some of the countries affected. Tony Blair, the British prime minister, last weekend weighed in during his meetings with US President George W. Bush to seek an exclusion for Corus, the UK steel producer, on the grounds that its high-grade output was not threatening to US producers.

Robert Zoellick, US trade representative, yesterday warned China against joining the "running dogs of European imperialism" in oppose the tariffs at the WTO, but Chinese officials said they would press on with their complaint.

Mr Zoellick's office has published a notice giving companies until May 20 to request further exclusions, on top of about 1,000 requests already being processed. The notice indicates that exclusions might be granted even if the products can be made in the US, on the grounds that importers already have contracts with foreign suppliers or want to maintain more than one supplier.

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