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US Rules Brazil, Japan Dumped Steel

February 12, 1999

WASHINGTON (AP) _ Japan and Brazil face steel tariffs of up to 71 percent following a Clinton administration ruling Friday that they may have illegally dumped steel in the United States.

The preliminary finding that producers from those countries sold steel in U.S. markets at prices dramatically below production costs or home-market prices triggers a full investigation that could lead to tariffs by this summer.

In the meantime, the U.S. Customs Service will collect cash deposits or bonds from imports to cover any duties later applied retroactively. Commerce Secretary William Daley said the steel industry would get immediate relief as a result.

Steel imports surged to record highs last year. The Asian economic crisis reduced demand abroad and forced foreign producers to seek U.S. outlets, often by selling goods at prices below the prevailing U.S. levels.

The Clinton administration still faces difficult choices about how exactly to respond to complaints from U.S. steel companies and workers’ unions. The industry is seeking stronger trade sanctions from the administration and in Congress.

Wary of further aggravating a troubled Russian economy, the Commerce Department held off announcing findings in a similar complaint against that country, saying the United States could reach a settlement agreement by next week to avert tariffs.

Formal complaints made to the Commerce Department by the American steel industry specifically deal with hot-rolled carbon steel, a common product that can be used as is or turned into more specialized products such as auto parts.

Complaints against a less common but important product, cut-to-length plate, are expected as early as Tuesday. Several cases also have been filed covering stainless steel, with duties already imposed in some of them.

Imports of hot-rolled carbon steel from Japan, Brazil and Russia jumped more than 60 percent during the first six months of 1998, compared to the same period in 1997.

The U.S. producers blame at least 10,000 layoffs and three company bankruptcies on the import surge. But, while U.S. steel producers accuse the foreign producers of dumping, the exporters blame normal market factors.

Fujio Ono, chairman of the Japan Steel Information Center, called the dumping charges ``unjustified, ill-considered and counterproductive″ and said those same market forces ``are working to lower imports without government intervention.″

There are already signs that imports dropped in December because of fears of retroactive tariffs from Japan and Russia, and Friday’s ruling could begin to lower imports from Brazil.

The Commerce Department found that goods from Japan may have been sold at up to 68 percent below the fair value and from Brazil at up to 71 percent. The government also found that Brazil may have illegally subsidized its producers, driving down the price of steel by up to 9 percent.

The U.S. industry has urged President Clinton to go beyond the dumping cases, which target one country and one product at a time, and consider broader reviews that could lead to quotas or across-the-board steel tariffs.

The industry and their supporters in Congress found hope in the preliminary dumping determinations but opposed the Russian talks.

``They’re really saying in order to further our initiative in foreign policy in Russia, we’re willing to sacrifice American steelworkers jobs,″ said Rep. Ralph Regula, R-Ohio, chairman of the House steel caucus.

Sen. Jay Rockefeller, D-W.Va., said the ruling ``represents only a small step toward stopping the flood of cheap imports.″

Although labor unions are traditional allies of Democrats, Clinton has also been a strong supporter of free trade, pushing other countries to open up their markets to U.S. exports.

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