Trade panel rules steel imports harming U.S. industry

Associated Press WriterWASHINGTON -- Much of the beleaguered American steel industry has been significantly harmed by cheap foreign imports, a U.S. trade panel ruled Monday, taking a first step toward protective barriers that would make most steel costlier for American consumers.

The six-member U.S. International Trade Commission found 12 of 33 domestic steel product lines have suffered serious injury because of the imports. Those dozen product lines -- from steel slabs to hot- and cold-rolled steel -- account for 79 percent of all steel produced in the United States.

The commission next will hold hearings about remedies and then submit recommendations to the Bush administration by Dec. 19. Among the possibilities are import quotas, tariffs or a combination of the two.

The commission, an independent government agency, began its investigation in June at the request of President Bush.

U.S. Trade Representative Robert Zoellick wrote to the commission and said the American industry is "suffering financially, with marked declines in profits, returns on investment and market share."

Foreign steel makers have blamed the U.S. industry's problems on overproduction and the failure of some American companies to cut costs and modernize.

Global steel production increased 7 percent last year to a record 747 million tons, and efforts are under way to negotiate a worldwide reduction in steel production.

Last week, Bethlehem Steel Corp. became the 26th domestic steel company to file for bankruptcy protection since 1998. During that period, more than 25,000 jobs have been cut, according to industry figures.

American firms that use steel have said tariffs could increase the price of their products and cost many more jobs than would be saved in the steel industry.

The U.S. steel industry employs about 175,000 people. By contrast, companies that consume steel employ about 9 million people, according to the Consuming Industries Trade Action Coalition, a coalition of companies that use steel.

Steel imports come mostly from Brazil, China, Russia and Japan. Jon Jenson, chairman of the coalition, said if tariffs are imposed he expects the countries will respond by cutting access to their markets.

After receiving the commission's recommendations, the Bush administration will have until Feb. 19 to decide what action to take.

------On the Net:

Trade coalition: http://www.citac-trade.org

ITC: http://www.usitc.gov

Steelworkers: http://www.uswa.org