The long-simmering steel industry controversy over alleged “dumping” of foreign steel on the American market may be shaping up for an overdue solution.
And with the domestic steel industry running at less than 60 percent capacity – 77,000 workers on layoff and another 17,500 on short work weeks – the country will be eagerly awaiting the outcome.
Witnesses for seven domestic steel companies who charge illegal dumping by foreign producers, told a U.S, International Trade Commission hearing that rising imports are hurting the American market and boosting unemployment.
They charged that 11 nations – Britain, France, Belgium, West Germany, Luxembourg, Netherlands, Italy, Brazil, Spain, South Africa, and Romania – are subsidizing steel exports to the U.S.
In their response. the foreign companies denied they are selling steel below their cost of production and argued that U.S producers have not modernized rapidly enough to meet foreign competition.
The ITC will decide Feb. 18 whether a “reasonable question” exists that dumping has occurred. In the event of such a finding the Commerce Department will be asked to investigate the charges.
The American companies – U.S, Steel Bethlehem, Republic, Jones and Laughlin, National, Inland and Cyclops – have claimed “unfair” trade practices by the importers. The term “dumping” is applied to selling products below cost or granting government subsidies for steel imports.
Describing the increasing severity of the problem domestic firms say imports accounted for 2 percent of steel used in America in the 1950s, 9 percent in the 1960s, 15 percent in the 1970s, 19 percent in 1981 26 percent last November and 23 percent in December.
A spokesman for U.S. Steel Corp. said imports accounted for 43 percent of the western market for the first 11 months of 1981, 10 percent in the central market 18 percent in the South and 12 percent in the East. U S. Steel’s Geneva Works in Utah whose current layoffs 21,100, serves 11 western states.
In a second pending action domestic companies have filed suits with the Commerce Department against a number of importers.
Long-range solutions to the sticky imports question ultimately may rest with Congress and the Administration in enforcing present trade laws and adopting needed new measures.
Rep. Joseph M. Gaydos, D-Pa., chairman of the House’s ”Steel Caucus ” declared recently that the trigger price mechanism (TPM), adopted by the Carter Administration to limit dumping of foreign steel, hasn’t worked effectively, “nor have voluntary quotas.”
Gaydos believes the time has come for “mandated quotas set by Congress” which he believes “can effectively defend our nation’s basic steel industry from competitors who engage in unfair trade practices.”
Similarly Robert G. Welch, Former president of the Steel Service Center Institute, proposed in an article in Industry Week Magazine the scrapping of the TPM which “never has worked and never will work ” and adoption of some form of mandatory quotas backed by countervailing duties.
Perhaps the upcoming ITC decision and subsequent actions will allay the problem. If they don’t, the government should waste no time considering other solutions including the ideas offered by Gaydos and Welch.