On December 7, the International Trade Commission issued their remedy recommendations on 16 steel products as part of the Section 201 investigation on steel imports. The Commissioners' recommendations varied widely from increases tariffs ranging from 8% to 40%, depending on the steel product line, to quota restrictions or combinations of both, known as a tariff rate quota. The Commission will formally submit its recommendations to the president in a report on December 19. He will then have up to 75 days to announce his final import relief plan.
In the large category of carbon and alloy flat steel products, recommendations included additional tariffs of 20% and 40%, which would be reduced over four years. With respect to the stainless products, the recommendations were in the form of both tariffs and quotas, and ranged from 8% to 25%. (See sidebar for a complete breakdown of these products.)
The ITC had investigated 33 steel products in four product groupings. It voted affirmatively for 12 products; and returned a 3 to 3 vote on four others. Under ITC rules, a tied vote moves that product to the remedy phase. Together, these products covered about 74% of US steel imports or about 27 million tons valued at $10.7 billion.
The ITC then moved to the remedy phase for the 16 products found to be seriously injured or threatening to be seriously injured by imports. Of special interest to AWPA members are the stainless steel wire rod and stainless steel wire industries that were both found to be injured. Thanks goes to Cheryl Coelho, from ECD, Inc. who came to Washington to testify at the ITC's remedy hearing. Despite the time constraints and large number of witnesses, Cheryl was able to interject that if relief is granted on stainless wire rod, and not on wire imports, than wire producers will be hit doubly hard because the result will be increased imports of wire. There are currently outstanding dumping orders on stainless rod from all but one major importing country.
For these products, the ITC investigation focused on the five-year period between 1996 and 2000. The steel industry argued that during that time US steel producers were forced to compete against vastly increased levels of imports that reduced US market share, depressed prices, and prevented producers from any profitability. Producers asked for between 40% and 50% tariffs on their products, as well as quotas in some cases. The products covered 80% of what is imported to the US from abroad.
Contrary to what carbon flat-rolled and long products producers asked for as a remedy, producers of stainless and tool steel asked for a three-year quota on imports of stainless bar and light shapes, rod, tool steel, wire and flanges and fittings. They also requested a tariff on all imports in the first year. However, they asked for the quotas to be based on the 1993-1995 period, a much lower import level than recent years.
Specifically the stainless industry recommended quota levels of 69,512 net tons of stainless bar, 53,540 tons of tool steel, 50,210 tons of stainless rod, 21,858 tons of stainless wire, and 16,153 tons of stainless flanges and fittings, with a proposal for an annual increase of 3%. Further, producers recommended that if imports surge in the fourth quarter of 2001 compared with the first three quarters, the excess should be deducted from the first-quarter quota in 2002.
Stainless Product Recommendations
Below is a summary of the ITC's recommendations on stainless steel wire and stainless steel wire rod.
Stainless Steel Wire
The three commissioners who made affirmative determinations recommended
the following remedies:
Chairman Koplan recommended increased duties for a period of four years.
The increased duties would be 8% during the first year of relief, followed
by 7% during the second, 6% in the third, and 5% in the fourth. Commissioner
Bragg recommended increased duties for a period of three years. The increased
duties would be 15% first the year; 10% in the second; and 5% in the third.
Commissioner Devaney recommended quarterly and country-specific quotas
for three years. The quotas would be set at the average amount of imports
during 1996 through 1998. He also recommended an increased duty of 15%
during the first year of relief.
All three recommended the exclusion of Canada, Mexico Caribbean Basin Initiative beneficiaries, Andean Trade Preference Act beneficiaries, Jordan (except Koplan) and Israel.
Stainless Steel Wire Rod
Chairman Kopan and Commissioners Hillman and Miller recommended increased duties for a period of four years. The increased duties would be 20% during the first year, 17% in the second; 14% in the third; and 11% in the fourth. Commissioner Bragg recommended duties for a period of three years. The increased duties would be 25% during the first year; 20% in the second; and 15% in the third. Commissioner Devaney recommended quarterly and country-specific quotas for three years. The quotas would be set at the average amount of imports during 1996 through 1998. He also recommended an increased duty of 15% during the first year. Vice Chairman Okun recommended quotas for three years. The quota would be set at 62,573 short tons during the first year; and it would be increased by 3% during each of the remaining two years (64,450 in the second, and 66,384 in the third).
All recommended the exclusion of Canada, Mexico Caribbean Basin Initiative beneficiaries, Andean Trade Preference Act beneficiaries, and Israel. Devaney and Bragg also added Jordan.
Back to Wireline Contents
American Wire Producers Association
801 North Fairfax Street, Suite 211
Alexandria, VA 22314-1757
Tel (703) 299-4434 | Fax (703) 299-9233 | E-mail info@awpa.org | Web: www.awpa.org
