Carmakers celebrate as steel tariffs end

Automakers expect cost cuts, but steel unions fear loss of jobs

Posted on December 15, 2006

WASHINGTON — Trade regulators on Thursday revoked most of the 13-year-old tariffs and duties against imports of high-grade steel used in cars, giving U.S. and Japanese automakers a holiday surprise and possibly lower steel prices. Automakers including Nashville-based Nissan North America called the ruling an important victory and said it will help their industry without harming domestic steel makers. "We believe this will help to improve competition in the marketplace and promote the competitiveness of U.S. manufacturing," Nissan spokeswoman Katherine Zachary said. U.S. Sen. Lamar Alexander, R-Tenn., applauded the move. Alexander had been a strong opponent of the tariffs, which he said would cost Tennessee valuable automotive supplier jobs. But the United Steelworkers Union said it fears the decision could lead to the kind of job losses in the industry seen in the late 1990s and early 2000s when foreign steel makers were accused of dumping low-priced product in the United States. Since 2001, the price of corrosion-resistant, or galvanized, steel has risen from less than $400 a ton to more than $700. The vote by the International Trade Commission covers all tariffs and subsidy-countering duties against carbon steel plate from 16 countries. The decision appears to indicate the ITC doesn't believe dumping will reoccur. Tariffs are ending on corrosion-resistant steel sheet imported from Canada, France, Australia and Japan. Only steel from Germany and Korea will continue to face the duties, which were first imposed in 1993. DaimlerChrysler AG, Ford Motor Co., General Motors Corp., Honda Motor Co., Nissan and Toyota Motor Corp. had joined on the trade case — a first for the fierce competitors. They contended they had been forced to pay $3 billion in additional costs since 2004 because of artificially high steel prices. The vote offers the promise of help for the struggling U.S. auto industry and manufacturers in dozens of other industries that use steel. Removing the tariffs means "tens of thousands of American auto jobs will stay in this country instead of going overseas," Alexander said in a statement. Lewis Leibowitz, a lawyer for the automakers' coalition, said ending the penalties against Canadian steel was particularly important since the North American market has become so unified in recent years and so much of the steel used in cars comes from Canada. "We got four out of six," he said. "It certainly will improve the competitive situation." Unionized steelworkers aren't so sure. From 1997 to 2004, 45 steel manufacturers, about 40 percent of those operating in the U.S., went bankrupt. More than 85,000 jobs were lost from western Pennsylvania through West Virginia, Ohio, Michigan, Indiana and Illinois, according to the United Steelworkers.