Canton Repository

August 23 ,2002

Steel makers, companies object to latest exclusions 

By Paul M. Krawzak
Copley News Service

WASHINGTON — The Bush administration announced a final set of steel imports that will escape tariffs this year, triggering a volley
of protests from steel companies and steelworkers.

The administration approved 178 more exclusions, including various types of flat rolled sheet, bar, wire and pipe. That brings the
total of excluded steel products to 727.

The excluded steel is exempt from “safeguard” tariffs on imports that President Bush imposed in March. The purpose of the duties of
up to 30 percent is to give struggling U.S. steel makers a chance to recover from foreign competition. The tariffs will decline each
year until they expire in 2005.

Since they took effect five months ago, the duties have contributed to dramatic increases in the price of some types of steel. The
cost of sheet steel, for example, has risen 50 percent or more since March.

In a joint statement from the Department of Commerce and U.S. Trade Representative, officials said they determined the products
excluded “are not sufficiently available from U.S. producers and that excluding these products would not undermine the
effectiveness of the safeguard on steel products.”

The exclusions are meant to insure that American manufacturers can get steel from foreign producers when similar steel products
are unavailable from domestic makers.

The exclusions also have played a role so far in dissuading the European Union from retaliating against the United States for the
tariffs. Europeans say the duties violate international trade laws. The Bush administration insists the tariffs are legal.

U.S. steel makers countered they are making many of the products that were excluded. The United Steelworkers union also
objected.

Of the 178 exclusions announced Thursday, domestic steel makers had objected to 104 them, industry representatives said.

“We are disappointed by the number of exclusions announced today,” said Thomas J. Usher, chief executive officer of U.S. Steel
Corp. “Unfortunately, a number of the exclusions granted today are for products that we produce every day.”

One example is an exclusion requested by German automaker DaimlerChrysler, which allows the tariff-free import of
corrosion-resistant sheet steel used in auto bodies.

“That is made by any number of domestic producers,” including U.S. Steel, Bethlehem and National steel companies, said Kevin
Dempsey, an attorney representing all three companies.

The exclusion allows the import of 80,000 metric tons of that type of steel each year, he said.

During a background briefing, U.S. trade officials said the exclusions apply only to steel unavailable from U.S. steel makers.

“We are confident these are products that are not available,” said an official who spoke on condition he not be identified.

According to an attorney for U.S. steel makers, the government granted some exclusions after hearing arguments that certain
products were not available in sufficient quantities from U.S. producers.

“There were allegations based on insufficient material that we saw that were filed by the other side that there was not as much steel
available on the market as they wanted,” said Alan Wolff, an attorney for the steel industry. “We think those surveys (of steel
availability) were off base.”

Even with the exclusions, the Bush tariffs still apply to almost 10 million metric tons of steel imports, or three-fourths of the imports
that would have been subject to the tariffs without any exclusions.

The government will not approve any more exclusions this year. However, officials will begin considering new requests for
exclusions as early as November. However, further exclusions would not be approved until next March at the earliest.

The Timken Co., a Canton, Ohio-based maker of specialty steel and high performance bearings, does not appear to be hurt by the
latest exclusions.

“We are still studying it, but after a quick review, we don’t see anything major there relative to our business at this early point,” said Jason Saragian, a spokesman for the company.