US: Brazil, Japan Dumped Steel
The Commerce Department said Friday it has found evidence that Brazil and Japan have illegally dumped steel in the United States at up to 70 percent below normal prices.
In a step that could lead to tariffs on imported steel, the government made a preliminary finding that producers from those countries sold steel in U.S. markets at prices dramatically below production costs or home-market prices.
A ruling in an investigation into possible steel dumping by Russia was delayed, however, as negotiations seeking settlement of trade issues with that country continue.
The Clinton administration still faces difficult choices about how exactly to respond to complaints from U.S. steel companies and workers' unions.
Steel imports surged to record highs last year as the Asian economic crisis reduced demand abroad and forced foreign producers to seek U.S. outlets, often by selling goods at prices below the prevailing U.S. levels.
Formal complaints made to the Commerce Department by the American steel industry specifically deal with hot-rolled carbon steel, a common product that can be used as is or turned into more specialized products such as auto parts.
Imports of hot-rolled carbon steel from Japan, Brazil and Russia jumped more than 60 percent during the first six months of 1998, compared with the same period in 1997.
The U.S. producers blame at least 10,000 layoffs and three company bankruptcies on the import surge. Employee-owned Weirton Steel Corp. in Weirton, W.Va., along the Ohio-West Virginia border, has been forced to lay off about 18 percent of its workforce and Cleveland-based LTV said profits have been hurt by the imports.
But while U.S. steel producers accuse them of dumping, the foreign producers blame normal market factors, including devalued currencies abroad and a General Motors strike that temporarily lowered demand in the United States.
The administration said Friday it is continuing its investigation into whether Russia dumped steel at unfair prices, and plans to release findings next week.
But a written statement also noted: "Commerce is discussing with Russia a possible agreement to suspend the hot-rolled steel dumping investigation."
Such an agreement, which the U.S. industry opposes because it would mean a certain amount of cheap imports could continue, could come within weeks and would not require industry consent.
Restrictions under World Trade Organization agreements, which Russia does not participate in, rule out such negotiations with Japan and Brazil.
Commerce found that goods from Japan may have been sold at up to 67.59 percent below the fair value and from Brazil at up to 71.02 percent. The government also found that Brazil may have illegally subsidized its producers, driving down the price of steel by up to 9.45 percent.
Before tariffs could be imposed, Commerce would have to make a final dumping determination by late April and the U.S International Trade Commission would have to find, by mid-June, that the imports injure or threaten to hurt domestic industry.
Any tariffs would be retroactive to Friday at least. For Japan and Russia, the effective date could go back to mid-November if Commerce affirms an earlier ruling that the import surge was unusually high.
There are already signs that imports dropped in December because of fears of retroactive tariffs from Japan and Russia, and Friday's ruling could begin to lower imports from Brazil.
The U.S. industry has urged President Clinton to go beyond the dumping cases, which target one country and one product at a time, and consider broader reviews that could lead to quotas or across-the-board steel tariffs.
Clinton administration officials, however, have been reluctant to take steps that could start a trade war and cut off foreign markets to U.S. exports of other goods.
Written By Anick Jesdanun, Associated Press Writer