Steel users have banded together to fight for removal of the special tariffs on steel imports imposed by President Bush this year. The mills, under the umbrella of the American Iron and Steel Institute are gearing up to resist tearing down the import barriers, claiming the industry needs more time to restructure and recover from low prices before this year.

The Consuming Industries Trade Action Coalition (CITAC), which includes the American Institute for Imported Steel (AIIS), is lobbying the administration and Congress to lift the duties next year. The administration is scheduled to conduct a mid-term review to determine whether to continue the three-year import program (initiated last March) beyond September 2003. In return for 201 protection, the administration required the U.S. steel industry to take steps to consolidate and restructure.

AIIS president David Phelps says that the first round of the battle will be to seek more exemptions, with companies filing for more easing of tariffs on specific products they claim cannot be procured domestically. The administration granted its last round of exemptions in August.

"Our members are working with customers who are continuing to rely on exemptions," Phelps says. In quite a number of cases the exemptions are not accepted because domestic producers argue they can produce an item. "But when the requester goes back and says 'Let's have the steel,' the answer is 'No we won't (make it).'"

The midterm review process for the Bush steel import program begins in March. ."We're hoping [the review] moves forward quickly because of some of the problems with the current exemption process," Phelps explains.

In September, the Coalition went before the House Small Business Committee to charge that the steel duties were contributing to high prices, shortages, and job losses among small manufacturers.

"CITAC's top priority is the repeal of the steel tariffs that are wreaking havoc in the steel market for downstream manufacturers," according to CITAC president Jon Jenson. He claims that manufacturers are experiencing skyrocketing prices (increases of up to 70%), uncertain supply due to allocations, lengthening leadtimes (increases of up to 60%), broken contracts and quality problems.

The exemptions have provided no relief to manufacturers who really need it, according to Jensen. He calls the process "flawed, inadequate, ineffective, inherently unfair, and manipulated—to the disadvantage of the steel user."

The Coalition found a sympathetic ear in House Small Business Committee Chairman Don Manzullo (R-Ill.) who says the effects of the import program on small manufacturers have been "devastating" from price hikes and product shortages. The result, he says, is to "make it nearly impossible for America's manufacturers to compete with foreign companies, which don't pay inflated steel prices."

Andrew Sharkey, president of the American Iron and Steel Institute (AISI), counters that the president's tariff remedies have helped to "stabilize the domestic steel market." and will ultimately benefit the country's economy as the steel industry has a chance to continue to invest, restructure and consolidate. "It is critical that the administration stay the course on the president's steel tariff remedy, enforce (it) strictly, monitor the import situation carefully and counter any import surges," he adds. Regarding steel industry measures, Phelps says: "To date, there is little evidence to suggest that this restructuring is taking place."

Meanwhile, the International Trade Commission (ITC) in a case not related to the president's program recently lifted import duties on steel from five countries charged with dumping cold rolled steel, claiming the imports are not hurting U.S. industry. The countries are Australia, India, Japan, Sweden and Thailand. A further ruling is expected on whether to maintain duties imposed in May on cold-rolled steel from about 20 countries. A decision from ITC is due shortly on the remaining countries, which include major producers such as China, Brazil, and South Korea.