A Blow To Big Steel's Recovery

Big Steel was ready to whoop it up, but the U.S. International Trade Commission canceled the bash. On July 27, the ITC ruled that U.S. steelmakers had not been injured by many imports, and lifted about half of the tariffs applied two months earlier by the Commerce Dept.

Steel executives called the decision "mixed." But Wall Street saw nothing mixed about it. Leading steel stocks plummeted, with National Steel dropping 27% to 14 7/8, on the news. The ITC tariffs were key to Big Steel's survival strategy. With protection against imports, the companies had figured to raise depressed steel prices by 15% to 20% a year, creating a profit for 1993 after three years of big losses. The companies hoped a profitable year would persuade Wall Street to underwrite major capital investments.

Meanwhile, the rulings almost certainly will bolster the tottering Uruguay Round of global trade negotiations. Sir Leon Brittan, the European Commission vice-president for external economic affairs, applauded the ITC for defusing "what had become a very grave trade dispute." But momentary world accord may have its price: For now, forget about healthy steel profits.

Before it's here, it's on the Bloomberg Terminal.