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Bush OKs weaker tariff package for relief of U.S. steel, ore industries

Date Posted: March 15 2002

President Bush earlier this month offered a middle-of-the road solution to aid the ailing U.S. steel industry, imposing tariffs of 8-30 percent on several types of imported steel, as well as import quotas on steel.

He didn't impose the across-the-board 40 percent tariffs requested by American steelmakers, but he didn't completely ignore the needs of the domestic producers, who have complained that the governments of nations like China and Korea are subsidizing the manufacture of cheap steel, which is being "dumped" on the U.S. market.

Still, Congressman Bart Stupak, whose Upper Peninsula district includes the Empire and Tilden iron ore mines, said the tariffs would do little to help the mining industry. He said the tariff on imported slab steel hasn't changed from previous levels - and it's the same level that has caused the Empire mine to be shut down since November, although it's expected to re-open this month. If imported slab steel is sufficiently cheap, steel manufacturers can use it instead of iron ore pellets mined in the U.P. and other areas.

"Now the president has responded by setting an import quota for slab steel - 5.4 million tons - that matches the level already being imported from countries subject to these penalties," Stupak said. "Because this import level for slab steel has already caused mine shutdowns and layoffs in northern Michigan, it appears we have won nothing."

U.S. Sen. Carl Levin agreed that the president's tariff levels on most imported steel are too low to help the U.S. steel and iron ore industries, although the Steelworkers Union and steel manufacturing executives expressed optimism that the tariffs would help them.

"The president's decision today does not go far enough to assure survival of our devastated steel industry, which has already suffered 31 bankruptcies and the loss of over 35,000 jobs in less than three years," Levin said. "The remedies recommended by the president are seriously deficient in stopping the surge of cheap imports - including steel slab imports, which displace the iron ore mined in Michigan's Upper Peninsula. Slab steel dumped in our market is particularly injurious to our domestic iron ore industry."

Bush's decision on tariff levels is the culmination of the efforts of a coalition of unions, steel manufacturers and iron ore producers, who have urged the president to "Stand Up for Steel and Iron Ore."

The most recent U.S. steelmaker bankruptcy took place the day after Bush imposed the tariffs: Indiana-based National Steel, Michigan's largest steel producer, filed for Chapter 11 bankruptcy on March 6, but is expected to continue to operate for now without layoffs after they secured a $450 million line of credit. Of National Steel's 8,400-member workforce, 3,000 work in the steelmaker's Detroit-area facilities.

The fortunes of the domestic steel and iron ore industries have a tremendous affect on Michigan's construction workers. There are 30-40 operating engineers who work at the Empire and Tilden mines full-time - when they are open - as well as scores more construction Hardhats who regularly perform maintenance and renovation work.

Downstate, thousands of construction workers over the past several decades have built and renovated steel mills - the permanent loss of Rouge Steel or the Great Lakes Steel division of National Steel would be a tremendous blow to long-term construction industry employment.