NCPA - National Center for Policy Analysis

Steelmakers, Unions Fight Tariff Exemptions

June 7, 2002

When the Bush administration conceded to demands of some domestic steel companies and raised tariffs on imported steel, it left open the door for exemptions for some categories of products. Now U.S. steel producers and unions are pressuring the administration to resist granting exemptions in hundreds of cases.

The tariffs themselves have been roundly criticized by U.S. manufacturers who depend upon steel for their products. Following imposition of the tariffs, prices for some steel products soared and shortages began to appear. Moreover, the controversial tariffs have pushed Europe and Japan close to a trade war with the U.S.

  • The tariffs, announced in March, consist of surcharges of 8 percent to 30 percent on a wide variety of imported steel.
  • The U.S. Department of Commerce is expected to rule on about 600 exemptions requested by foreign steel producers and trading companies within days -- and hundreds of additional requests for exemptions are coming in.
  • The European Union has offered to abandon its plan to tax $360 million of incoming U.S. goods, in exchange for approval of a sufficient number of exemptions.
  • The federal government was to review the tariffs after 18 months -- halfway through the three-year tariff program -- but rapidly rising prices have convinced some government officials of the need to end the tariffs early or scale them back if domestic steel makers are "price gouging" or limiting supplies.

Source: Robert Guy Matthews, "Steelmakers, Unions Pressure Bush on Tariffs," Wall Street Journal, June 7, 2002.


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