AMERICAN STEEL IS TOUGH ENOUGH FOR FREE TRADE
The July 27 ruling by the International Trade Commission, lifting tariffs on many grades of steel imported into the U.S., is an important victory for fair and competitive international trade. But it may also have done American Big Steel a favor. By keeping the door open to many imports, the ITC's decision may pave the way for U.S. exports. And that could induce U.S. steelmakers to look more favorably on the stalled talks to hammer out an accord to settle trade disputes among steelmakers worldwide.
In removing some of the tariffs that the Commerce Dept. last month had slapped on diverse steel imports from 20 countries, the ITC rejected U.S. steelmakers' arguments that a broad range of dumped and subsidized foreign steel was injuring them. The ITC did find that foreigners' predatory pricing on certain products hurt the domestic industry, and it let tariffs on those items stand.
Now, steelmakers will have to rely more and more on productivity and quality gains to be profitable. That may not be so difficult. Since 1980, U.S. companies have undergone a painful restructuring, closing plants, shedding jobs, and investing $35 billion in new plants and machinery. Today, the operating cost per ton of steel is lower in the U.S. than in Germany, Japan, France, or even Mexico.
Now that the ITC has kept the door open to many imports, the Clinton Administration might rethink its trade policy. Steel manufacturers should be protected only if unfair trade occurs. Otherwise, manufacturers should be urged to think more globally. Bringing U.S. steelmakers into multilateral talks on a steel accord--a move that steelmakers resisted as they pushed for tariffs--would help pave the way.