Many Applaud President's Decision in Steel Import Case
-Components of the President's Decision-

Washington, DC - The American Iron and Steel Institute (AISI), on behalf of its U.S. member companies, commended President Bush for his decision, under Sections 201/203 of U.S. trade law, to impose tariffs ranging up to 30 percent on certain steel imports for a period of at least three years, noting that this will give the industry a much needed breathing space to begin to recover from the worst crisis in the history of the American steel industry.

Against enormous opposition from foreign governments and others, "the President has made a courageous decision in the national interest," Andrew G. Sharkey, III, AISI President and CEO, said. "While the import relief program announced is not everything the U.S. steel industry felt was needed to address effectively the crisis in this industry, the President deserves great credit for resisting the intense pressures to do nothing or to impose considerably less relief than what was announced. This decision will be critical in helping to return the American steel industry to a position of health. It shows that the President wants to address and reverse the damage to U.S. steel companies, employees and communities. It shows also that the President understands that a strong domestic steel industry is essential to the long-term interest of U.S. steel-using industries, the U.S. economy and U.S. national security." Mr. Sharkey also called the President's 201 decision "thoroughly defensible under existing World Trade Organization (WTO) rules," and congratulated the Administration for its "careful attention to detail to ensure that this safeguard measure complies fully with WTO requirements."

Thomas J. Usher, chairman of United States Steel Corporation, thanked President Bush, "for taking a bold step to carry through on his promise to address the serious injury to the domestic steel industry caused by record levels of imported steel. My hat's off to the President for demonstrating strong leadership in taking this action.

Pennsylvania Gov. Mark Schweiker said, "From the very beginning, President Bush has faced the complex issue of steel dumping when others in Washington would not. Because of his leadership, we finally see decisive action. The remedies imposed by President Bush put a serious dent in the business of importing unfairly traded steel. And that is good news for Pennsylvania and its steel workers."

The Port of New Orleans, one of the Nation's largest ports, expressed deep disappointment over President Bush's decision to impose tariffs and quotas on steel imports.

Gary LaGrange, executive director of the board of commissioners of the Port of New Orleans, said, "This protectionist decision will only serve to eliminate American jobs and delay the recovery of our economy."

The Port of New Orleans was part of a nationwide effort to oppose the anti-free trade campaign of the steel companies. "I am extremely concerned about the jobs impact that this decision will have on our Port," said Mr. LaGrange.

Components of the President's Decision

Consistent with U.S. international trade obligations, President George W. Bush's Administration is announcing temporary safeguard measures on key steel products. As required by U.S. law and international trade rules, the level of relief is reduced periodically throughout the duration of the measure:

Flat Products: A tariff of 30% will be imposed on imports of plate, hot-rolled sheet, cold-rolled sheet, and coated sheet. This remedy provides substantial relief for the sector of the industry that has been hardest hit by imports and which is the anchor for many struggling U.S. companies. This tariffs higher than the 20% tariff recommended by the plurality of ITC commissioners. The higher tariff enhances the ability of U.S. producers to adjust to import competition without placing an undue burden on U.S. steel consumers or on the country as a whole.

Tin Mill Products: A tariff of 30% will be imposed on imports of tin mill products. The ITC commissioners were evenly divided as to whether imports were a substantial cause of serious injury to the domestic industry. As permitted by the statute, the President has decided to treat the commissioners' findings as an affirmative determination, and has therefore decided that relief is appropriate. A tariff of 30% is appropriate for the same reasons that such a tariff is appropriate for other flat products.

Hot-Rolled Bar and Cold-Finished Bar: A tariff of 30% will be imposed on imports of hot-rolled bar and cold-finished bar. This tariff is higher than the 20% tariff recommended by the plurality of ITC commissioners. The higher tariff enhances the ability of U.S. producers to adjust to import competition without placing an undue burden on U.S. steel consumers or on the country as a whole.

Rebar: A tariff of 15% will be imposed on imports of rebar. This tariff is higher than the 10% tariff recommended by the plurality of ITC commissioners. The higher tariff enhances the ability of U.S. producers to adjust to import competition without placing an undue burden on U.S. steel consumers or on the country as a whole.

Certain Tubular Products: A tariff of 15% will be imposed on imports of certain welded tubular products. This tariff will provide a higher level of relief than the tariff-rate quota recommended by a majority of ITC commissioners.

Carbon and Alloy Fittings and Flanges: A tariff of 13% will be imposed on imports of carbon and alloy fittings and flanges. This tariff is equal to the tariff recommended by the plurality of ITC commissioners. This tariff is sufficient to facilitate industry restructuring without unduly burdening U.S. steel consumers or the country as a whole.

Stainless Steel Bar: A tariff of 15% will be imposed on imports of stainless steel bar. This tariff is equal to the tariff recommended by the plurality of ITC commissioners. This tariff is sufficient to facilitate industry restructuring without unduly burdening U.S. steel consumers or the country as a whole.

Stainless Steel Rod: A tariff of 15% will be imposed on imports of stainless steel rod. This tariff is lower than the tariff recommended by the three commissioner plurality. Given the conditions prevailing in the domestic stainless steel market, this tariff is sufficient to facilitate industry restructuring without unduly burdening U.S. steel consumers or the country as a whole.

Stainless Steel Wire: A tariff of 8% will be imposed on imports of stainless steel wire. The commissioners were evenly divided as to whether imports were a substantial cause of serious injury to the domestic industry. As permitted by the statute, the President has decided to treat the commissioners' findings as an affirmative determination, and has therefore decided that relief is appropriate. This tariff is sufficient to facilitate industry restructuring without unduly burdening U.S. steel consumers or the country as a whole.

Slab: Imports of slab will be subject to a tariff rate quota (TRQ). The in-quota volume will be set at 5.4 million short tons. The out-of-quota tariff will be 30%. A majority of ITC commissioners recommended a tariff-rate quota on slab, with an in-quota volume roughly equivalent to imports in 2000 and an out-of-quota tariff of 20%. Slab is an input for a key segment of the domestic industry. Given market circumstances, including the level of current demand, the TRQ announced is sufficient to ensure continued access to slab without undermining the relief applied to other flat products.

Other Provisions

NAFTA partners. For those products where the ITC recommended the inclusion of a NAFTA partner, or reached a tie decision on whether NAFTA imports should be excluded, the Administration asked for supplemental information on whether imports from countries besides Canada and Mexico were by themselves a substantial cause of serious injury to the domestic industry or threat thereof. The ITC found in each case that they were. Based on these findings and the specific factors enumerated in the statute, and consistent with the obligations of the United States under its free trade agreements and the WTO, the President has determined that our NIFTY partners should be excluded from the relief on all products.

Imports from developing countries. Consistent with WTO rules, the Administration will exclude from the relief imports from developing countries that exported only small amounts of steel to the U.S. and that are WTO members.

Import licensing and surge protection. The President will impose an import licensing system to allow the U.S. government to obtain more timely information about changes in steel trade trends for products covered by the relief. The President will closely monitor imports to ensure that the purpose of the 201 remedy is not undermined, and retains the discretion to impose safeguard measures on products from excluded countries should imports of such products surge during the duration of the relief.

Duration. The safeguard measures will remain in place for three years, rather than the four years recommended by the ITC. In light of the strength of the relief imposed, the President has determined that a remedy of three years is appropriate.

Product exclusions. The President retains the discretion to consider requests for product exclusions within 120 days after the date of the Proclamation and will consider requests for product exclusions each year thereafter. This will help ensure that U.S. consumers have access to needed products.

Trade remedy laws. The Administration will continue to enforce vigorously our antidumping, countervailing duty and other trade remedy laws.