Steel's Lament

Going after cheap imports

Two years ago, the Carter Administration put into effect a fragile plan to protect the U.S. steel industry from cheap imports. A so-called trigger price based on the cost of steel production in Japan was established; imports sold below this floor price automatically set off an investigation for dumping, or selling below the cost of manufacturing the goods. But after the Administration last week refused to raise the trigger price of $358 a ton, largely because it was considered inflationary, U.S. Steel, the nation's largest steelmaker, filed a complaint with the Commerce Department and the International Trade Commission. The company charged seven European Community countries with dumping an estimated $1.5 billion worth of steel in the U.S. last year. The Administration retaliated by suspending the trigger-price mechanism.

Big Steel may have fired the first shot in a potentially messy trade war. The Europeans are anxious to keep their steel shipments to the U.S. at a minimum of 5 million tons annually, but they could be forced out of the market if found guilty of dumping steel below cost.

The U.S. regularly enjoys a hefty trade surplus with the Common Market countries, but American exports there may be in jeopardy if the Europeans cannot sell their steel in the U.S. Some companies have already begun submitting evidence to the European Communities Commission that U.S. exporters have been selling liquid nitrogen fertilizers on the Continent at prices 17% below the U.S. domestic level.

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