White House Imposes Tariffs on Steel Imports
President Bush said in a statement this afternoon, ”This relief will help steelworkers, communities that depend upon steel, and the steel industry adjust without harming our economy.”
Duties between 8 and 30 percent will be levied against several types of imported steel products from the European Union, Russia, Japan, and South Korea. The duties will begin March 20, or after imports exceeded a new quota, and last up to three years.
The tariff and quota plan can be amended, said administration officials, if the U.S. steel industry improves.
Mexico, Canada, Argentina, and several developing countries are exempt from the tariffs.
The new tariffs provoked protest from Russia, Japan and the EU, which had warned Washington against erecting trade barriers.
The EU, Japan, South Korea, and Brazil warned they would challenge the trade restrictions before the World Trade Organization.
The Bush administration defended the tariffs under Section 201, an “escape clause” of the 1974 Fair Trade Law, which allows countries to protect severely weakened industries.
“The global steel industry has been rife with government intervention, subsidies and protection,” U.S. Trade Representative Robert Zoellick told reporters. “These unfair practices have hurt the U.S. steel industry because our market has been much more open than others.”
U.S. steel companies have accused foreign exporters of selling low-priced steel in U.S. markets, or “dumping” steel at prices far below fair market value, prompting the new policy.
As many as 31 steel producers have declared bankruptcy since 1997, and the U.S. steel industry lobbied the Bush administration for a forty-percent tariff over the next four years to protect domestic steel companies.