Guest Column Steel Tariffs Hurting Wisconsin Companies

by Bill Jens

Wisconsin State Journal ALL (Page A12)
September 13, 2002

Seven months ago, President Bush applied tariffs as high as 30 percent to steel imported into the United States in an attempt to help failing steel-producing companies. I, like many steel -using manufacturers in Wisconsin, believe the domestic steel industry should be strong and vigorously competitive. However, the tariffs have done far more harm than good by creating hardships for many of our small businesses that consume steel .

This is an important issue for Wisconsin because steel -consuming jobs are a major part of the state's economy. Manufacturers who use steel employ 162 workers for every one steel -making job in our state. That's a total of about 366,000 steel -consuming jobs. More than 77,000 of those are in the 9th Congressional District, where I have operations, and 36,000 jobs are in the 2nd District, which includes Madison.

My company manufactures metal components for automotive, off- road, electric motor, and lawn and garden companies. Like other manufacturers in Wisconsin and across the country, I am losing competitiveness in U.S. and foreign markets. In fact, one of my biggest customers has threatened to take its business to Mexico.

Actions such as the increase in steel tariffs, which could devastate my company, also threaten the 13 million Americans that steel -consuming manufacturers employ. These hard-working men and women face reduced hours, fewer benefits, and even layoffs if something doesn't change.

Unfortunately, misconceptions about steel tariffs hurt our efforts to save jobs and businesses here. There are folks who think that all imports are cheap and "dumped" in this country, or that the president was required by law to take action on steel imports . This just isn't true.

In what is called the Section 201 process, the International Trade Commission decides if domestic producers of certain products have been injured by imports , and then passes its recommendations on to the president. In the case of steel imports , the ITC suggested tariffs. The president, while not compelled by law to take any action, chose to impose tariffs of up to 30 percent.

As a result, since March, my prices have gone up by as much as 60 percent, and across the country steel prices are up as much as 50 percent to 75 percent. Supplies are tight, and quality is beginning to suffer.

Small businesses can't absorb these changes. Overseas, steel may be more expensive than six months ago, but it is not nearly as expensive as in the United States . America is an island of high- priced steel and the companies stuck on that island are being robbed of their chance to compete.

Wisconsin steel consumers are not asking for cheap steel or an end to the domestic steel industry. What we want is to have choices like every other industry in this country - to choose our raw materials based on processing characteristics, quality, availability, price and customer needs.

There is still hope. The president has the authority to reassess the 201 tariff action, and to make a mid-course correction. Wisconsin lawmakers and steel consumers must urge the administration to do a thorough and public review of the effects of these tariffs, and reduce, redirect or rescind the restrictions as soon as possible.

The United States could have a healthy and competitive steel industry and a prosperous steel -consuming sector. However, tariffs are not the means to either end and can only do more damage to companies and jobs in Wisconsin.