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US Move Provokes International Outcry

Heavy tariffs now offer the US steel industry the most comprehensive trade protection in its history. Japan and Europe are leading a wave of international protest over the decision.


"European companies will get absolutely killed"

The world's top steel producers condemned the United States on Wednesday for slapping hefty tariffs on steel imports, saying the move undermined the ideals of free trade preached by Washington.

The tariffs exceed the "voluntary" quotas negotiated with Europe and Japan in the mid 1980’s.

This time, billions of dollars worth of steel from the EU, Japan, South Korea, Russia and China are not allowed to be sold to the US, the world’s largest steel market.

" European companies will get absolutely killed," Richard Cunningham, a lawyer representing several European steel companies told the Financial Times newspaper.

Rapid reactions

The European Commission held an emergency meeting to consider its response.

Pascal Lamy, EU trade commissioner, on Wednesday strongly condemned Washington's decision, but said the EU had ruled out unilateral retaliation and would work within World Trade Organisation rules.

Japan announced that it is considering action in concert with the EU, South Korea and others.

A statement from the Ministry of Economy, Trade and Industry in Tokyo said Japan doubted whether the US steel crisis was as deep as had been maintained.

"In particular, imports from Japan have remained at a low level due to the effects of anti-dumping duties continuously imposed by the US government. We have considerable doubt as to whether the US steel industry has sustained the serious injury that would justify any safeguard measures by the US government," the statement said.

The German government also cast doubt on the reasons for the US decision.

"I find the president’s decision backing protectionist measures unjustified," Werner Müller, the German economic affairs minister, said in a statement.

"It is widely known that the problems of the US steel industry are not attributable to imports, but to the failure to restructure over decades and to the lack of international competitiveness," Müller said.

German steel firms might suffer

That failure to evolve has forced 31 US steel companies to go bankrupt since 1998. The price of US steel has never been cheaper. European steel industry experts maintain America would do better to modernise its flagging steel industry rather than seek to protect it.

Germany underwent such a modernization a few years ago, losing many jobs in the process. The country’s steel industry, which employs round 98,000 people, doesn’t stand to lose any jobs through the Bush administration’s action, said a union steel expert.

But German and European steel giants like ThyssenKrupp will suffer as a result of increased competition on the European market. Germany exported 1.6 million tons of steel to the United States last year, about 1.2 million of which will be affected by the import tariffs.

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