October 31, 2002   The PBN Company



Washington, DC - Consuming Industries Trade Action Coalition (CITAC) President Jon Jenson stood squarely behind CITAC's estimates of steel-consuming employment in the U.S., and described Professor Peter Morici's "new analysis" of CITAC's study as "a weak effort to deny that tariffs are hurting U.S. manufacturers."

Professor Morici's latest charges, funded by the American Iron and Steel Institute, contests CITAC's estimate that there are 13 million jobs in steel-consuming sectors in the United States that can potentially be impacted by the 201 steel tariffs.

"To be more precise," Jenson stated, "there are not 13 million workers potentially affected by the 201 tariffs as Professor Morici points out - the more accurate number is in fact 17.7 million workers. We were consciously conservative in our estimate."

Jenson continued, "Where Professor Morici is quite wrong, is in stating that 'the vast majority of steel purchased by steel-consuming sectors is not affected by the [201] tariff.' American steel users purchase both domestic and imported steel. The 201 tariffs raised the price of imported and domestic steel prices, in upwards of 50 percent for some products."

According to Laura Baughman, President of the Trade Partnership, the firm that prepared the employment estimates, the U.S. Department of Commerce's input-output table of 84 industry sectors shows 66 sectors as steel consumers. CITAC used employment data for only 29 of these 66 sectors in defining steel-using industries. "We could have - perhaps, should have - included even more sectors," said Baughman.

When these excluded sectors (including furniture and fixtures, scientific and controlling instruments, primary nonferrous metals manufacturing, and others which use steel) are added to the original estimate, the amended number of those employed in the steel-consuming sector actually totals 17.7 million.

"Contrary to the unspecified 'data' Professor Morici used to make these accusations, steel is used by virtually all industries in the United States," stated Baughman. "There is not a single sector that does not use steel either directly or indirectly through purchases of products containing steel."

She continued, "This means that increases in domestic and imported steel prices due to the Section 201 tariffs will affect virtually all sectors of the U.S. economy." In fact, the International Trade Commission, in a 1985 publication, also confirmed that, "&[A]n increase in the price of steel has implications for all sectors of the U.S. economy." 1

Regarding the analysis of the likely impact that the ITC's remedy recommendations would have on American jobs, Baughman stated, "Had Professor. Morici closely read CITAC's study, he would have known that the study excluded imports from Canada and Mexico from the estimated impact of steel tariffs. We have always said that the likely job impact of the tariffs leveled by President Bush will fall between the ranges we estimated in the study."

"Protectionists believe that if they keep saying that steel tariffs aren't hurting anyone, people will start believing the rhetoric, and U.S. steel users will think that the steel shortages, price hikes and loss of business to overseas competitors are part of a bad dream," stated Jenson. "However, steel users can't wake up from this nightmare."


1. U.S. International Trade Commission, The Effects of Restraining U.S. Steel Imports on the Exports of Selected Steel-Consuming Industries, 1985. Inv. No. 332-214, USITC Pub. 1788, p.3.





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