Speeches & Floor Statements
Posted on November 11, 2003
Yesterday, the World Trade Organization upheld it's earlier ruling that the steel tariffs imposed in March of last year are illegal and in violation of global trade rules. As a result of this ruling, the European Union threatened to impose trade sanctions on American imports sold in Europe, ranging from footwear to fruits and vegetables. The EU has said that it will impose duties of 13, 15, and 30 percent on these imports as soon as December 6 or at the latest December 15, if the steel tariffs continue to remain in place. The EU trade sanctions alone would amount to about $2.2 billion. Unfortunately though, the EU is not alone. Japan has announced that it will join the EU in retaliatory trade sanctions against the U.S. China, Norway and Switzerland have also notified the WTO that they will possibly impose trade sanctions against the U.S. if the steel tariffs aren't removed. There is plenty of evidence that if the steel tariffs are allowed to continue they will do more harm than good. On September 19, the International Trade Commission released its report on the effects of the steel tariffs on steel consuming industries. Here's what they found:
- One half of the steel-consuming firms that were surveyed reported they had difficulty in obtaining steel in the qualities and quantities they needed.
- Almost one-third of these firms relocated or shifted production to foreign plants or facilities after the implementation of the tariff.
- One quarter reported that their customers had shifted to purchasing finished parts or assemblies overseas as a result of the steel tariff.
- Almost one-third of these firms also reported the contracts that they had in place to purchase steel were broken or modified after the tariff was imposed and reported a loss in profits due to these problems of approximately $190 million.
- One-third of these firms reported longer lead and delivery times.
- 85 percent of the auto-parts suppliers surveyed said that their steel prices in the US were higher than global prices.
- 31 percent reported that customers had shifted purchases to buying finished parts or assemblies overseas as a result of the tariff.
- 74 percent reported changes in contract prices for steel and 55 percent reported that steel tariff was the only important factor in these changes in steel prices.
- 79 percent reported an inability to pass on steel price increases to customers.