Section 201 Tariff Remedies Have Harmed U.S. Steel Consuming

Market conditions in the U.S. have worsened considerably for steel using manufacturers since the steel import restrictions were imposed in March 2002. These conditions are clearly due, at least in part, to the steel 201 tariffs.

  • Steel prices in the U.S. have dramatically increased.

Prices of benchmark steel products (especially flat-rolled prices) have soared 30 to 50% this year-far more than domestic producers predicted during the Section 201 investigation. The Section 201 tariffs have greatly exacerbated the situation.

  • U.S. steel producers cannot meet domestic demand for steel.

U.S. steel producers have broken contracts with U.S. steel consumers, put their long-standing customers on allocation, and have turned away new business. As a result, a number of steel consumers report that they will run out of steel before the end of July.

  • U.S. steel consumers are being forced into the volatile spot market.

The fact that U.S. steel producers are reneging on firm contracts with U.S. consuming industries means that purchasers are forced into the volatile spot market, which is being buffeted by huge price increases. As a result, steel consumers have experienced greater price increases, as well as greater uncertainty in supply.

  • U.S. steel using manufacturers cannot count on reliable steel supplies at globally competitive prices.

Many U.S. steel-consuming industries will run out of current steel availability by the end of July and they have no assurance that they will be able to obtain new steel supplies after that date. Even if companies are fortunate enough to obtain steel, they have no idea whether they can get steel they need at globally competitive prices, because steel producers are refusing to make advance commitments regarding pricing. Steel consumers cannot commit to pricing or availability for their customers, which in turn is leading customers to look offshore for their steel-containing products.

  • The Section 201 remedy is harming the international competitiveness of U.S. steel-using industries.

Steel prices have gone up in several global markets, but not as much as the U.S. As a result, the price for steel in the U.S. greatly exceeds the price in foreign markets. The gap is widening. Steel consumers have lost business to foreign competition that has a built-in cost advantage and will continue to do so as customers look to foreign suppliers as a way to control costs. Jobs of American workers are at risk.




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