Newspaper article The Christian Science Monitor

Price of Steel Could Jump under Proposed Tariffs US Seeks Anti-Dumping Duties against Steel from 19 Nations

Newspaper article The Christian Science Monitor

Price of Steel Could Jump under Proposed Tariffs US Seeks Anti-Dumping Duties against Steel from 19 Nations

Article excerpt

SIX months ago the price of leaded hot-rolled bar was $500 a ton. Although demand for this steel, used in the auto industry, is far from robust, the price today is closer to $600.

The reason for the price rise: The Commerce Department declared foreign producers were dumping the steel, a practice of selling a product abroad at prices lower than fair value. The ruling allowed domestic producers to raise prices because of new tariffs on imported steel.

On Wednesday, the Commerce Department made a preliminary decision that steel mills in 19 countries were dumping other more-common types of steel: flat-rolled products that are mainly used in the cars and appliances. As a result of the finding, the agency proposed tacking on duties as high as 109 percent.

Last Friday, both LTV Corporation and US Steel raised prices on flat-rolled products by $20 a ton or 3 to 5 percent, effective April 4. The price hike, which analysts expect to hold, came despite the fact the industry is operating at 80 percent of capacity.

"There could be some panic by the service centers {wholesale buyers of steel}, and end users could be concerned that a shortage could develop," says Fred Lamesch, president of Trade Arbed, a Luxembourg steel company. "If they all try to buy enough to cover themselves, the domestic mills could get booked out and prices could go through the roof."

Although the decision stems from Bush administration policies, it is being treated abroad as a Clinton administration decision. Hence the ruling is likely to push trade policy closer to President Clinton's front burner. The European Community called the action "unwarranted and wholly disproportionate" and said it would seek urgent consultations with the United States at the General Agreement on Tariffs and Trade organization in Geneva.

The duties hit some countries harder than others. Most steel products from Belgium and Canada received small tariff increases. But Japanese, Brazilian, Mexican, Spanish, British, and French steel products were assessed large duties. Nippon Steel, for example, will have a 27-percent duty added to its corrosion-resistant steel, while the British Steel Corporation will have a 109- percent tariff added to its plate steel exports.

"The tariffs will virtually eliminate a lot of producers from the US market," says Mr. …

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