Dara Klatt

September 3, 2002


The PBN Company







Brookfield, WI - Wisconsin members of the Consuming Industries Trade Action Coalition (CITAC) Steel Task Force met Friday with Congressman James Sensenbrenner (R-WI-9) to detail the serious and growing crisis they are facing as a result of both the 201 tariffs on steel imports imposed by the Bush Administration and anti-dumping suits filed by steel producers.

Steel-consuming company representatives of CITAC and the Precision Metalforming Association (PMA), met with Rep. Sensenbrenner in his district office to discuss the problems they are experiencing with inadequate steel supplies and price gouging by domestic steel producers as well as competitive threats they are facing from overseas manufacturers.

Most of these problems are a result of the 30 percent tariffs imposed by President Bush on steel imports and/or the onslaught of anti-dumping cases brought by domestic U.S. steel producers. Together, these actions isolate the domestic steel industry from competition, driving up steel prices and causing supply shortages for American steel users. These American steel users in turn must compete with imports of finished products produced overseas with locally priced steel and therefore, are unable to pass on price increases to their customers, who are also under market pressures to contain prices.

"I wanted the Congressman to understand that, as our industry continues to struggle in this recession, the last thing we needed were tariffs," said Timothy Clark of Mayville Engineering Company in Mayville, Wisconsin. Clark's company, which produces metal components for the marine, agricultural and computer industries, has been forced to eliminate a third of its employees in the last eighteen months and fears more due to the impact of the steel price increases.

"We have seen 30-50% increases in steel prices since the imposition of the tariffs, and it has been difficult, if not impossible, to pass the increases on to our customers," said Clark. "Even as steel prices for us have skyrocketed, our U.S. customers continue to demand price decreases to match prices from Asia."

In Wisconsin, there are approximately 366,000 steel-consuming jobs and 2,300 steel-producing jobs, or 162 steel-consuming jobs for every one steel-producing job. In Rep. Sensenbrenner's district, there are nearly 78,000 steel-consuming jobs and barely any steel-producing jobs.

Another steel-consuming participant in Friday's meeting was William Jens, the President of Ataco Steel Products Corporation in Cedarburg, Wisconsin, a producer of metal components used for lawn and garden and electrical companies. "Steel import restrictions have resulted in my overseas competitors gaining an advantage over our company. Unless something changes, our business will continue to deteriorate and ultimately, our entire 90-person staff may be out of work."

Jeffrey Clark, President of Waukesha Tool and Stamping in Sussex, Wisconsin, also had the same concerns. According to Clark, countries such as China are now able to offer even more competitive prices than his company can. His company manufactures precision metal products for industries ranging from electrical and automotive, to appliances and tools. In August, Clark was informed that one of his largest customers is taking their business overseas, a loss for his company of about a million dollars.

"We are just watching manufacturing jobs run away from the U.S.," said Clark. "The tariffs are making it more difficult for us to compete in a global environment and we are trying to figure out how we will survive if we can't get to a level playing field."

The meeting with Rep. Sensenbrenner is one of a series of Congressional meetings held by consumers to inform their representatives of the unintended negative effects of the steel tariffs. Friday's visit follows the July 23rd House of Representatives Small Business Committee Hearing held by Chairman Donald Manzullo (R-IL) in which CITAC member companies testified about steel shortages and massive price increases caused by the 201 steel tariffs and anti-dumping duties. Chairman Manzullo invited the steel users to testify before the Committee after receiving more than a hundred letters from downstream users suffering serious dislocations from the Bush Administration's decision to impose up to 30% tariffs on imported steel.

Similarly, on September 3, the House Small Business Committee held a field hearing near Los Angeles to hear from area businesses about the government's efforts to meet the needs of small businesses, including local steel consumers who have been impacted by the 201 tariffs.

CITAC is a coalition of companies and organizations committed to promoting a trade arena where U.S. consuming industries and their workers have access to global markets for imports that enhance the international competitiveness of American firms.




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