- The Washington Times - Tuesday, February 4, 2003

Manufacturers that buy steel and their allies in Congress are trying to draw the Bush administration's attention to the downside of steel tariffs.
Rep. Joe Knollenberg, Michigan Republican, and 51 of his colleagues last week introduced legislation that would push the Bush administration to consider formally the tariff's effect on steel consumers, not just producers.
The move comes as the companies, mostly automotive suppliers, are working to quantify the negative effect of higher steel costs caused by the tariffs. Trade groups today plan to release a report that indicates "staggering" numbers many thousands of American jobs lost to higher steel prices during 2002.
The administration in March imposed tariffs ranging from 8 percent to 30 percent on some imported steel products to help ailing steel producers and to shore up voter support in politically important states such as Pennsylvania and West Virginia.
"What we are asking for is reasonable: Consider the impact of the Steel Safeguard Program on both steel producers and steel consumers and then make a fully informed decision on whether the benefits of continuing the tariffs really outweigh the costs," Mr. Knollenberg said in a statement.
But members of the Congressional Steel Caucus and major manufacturers say the tariffs are working, the steel industry is consolidating as planned and the measure is not necessary.
"In deciding to implement the safeguard action, the president carefully considered the national economic interest, including those of steel consumers. The president's economic review was sound, and his steel program is working," said Rep. Phil English, a Pennsylvania Republican and chairman of the steel caucus.
As proof, pro-tariff legislators and firms point to International Steel Group's offer to buy bankrupt Bethlehem Steel, and U.S. Steel's and AK Steel's bids for bankrupt National Steel Corp. Most major steel producers' fourth-quarter earnings reports also indicate a return to profitability.
Mr. Knollenberg's legislation would have the U.S. International Trade Commission expand its midterm review of the tariffs, due out in September, to assess the effect of tariffs on steel consumers.
Companies pushing for the review say that higher prices may force them to shift work and jobs overseas.
The midterm review of the tariffs is designed to help the administration assess the effect of the tariffs and decide whether to extend them for the full three-year term.
Chris Close, spokesman for Mr. Knollenberg, said that victory would not necessarily come through adoption of the measure.
"The president can do this without any sort of passage. We're continuing to push and raise awareness of the issue," he said last week.
The effort comes as steel producers are working to draw attention to a historically high level of steel imports. Despite tariffs, the American Iron and Steel Institute estimates that 2002 imports were the fourth-highest in history.
Several steel companies in January urged the administration to expand trade protections, though analysts said that appears unlikely amid domestic pressure and a trade suit against the United States at the World Trade Organization.
Major steel-exporting countries say the tariffs go against U.S. trade obligations and should be removed. To enforce their claim, they filed a case at the WTO, and a ruling is expected this spring.

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