The International Trade Commission ruled yesterday that Japanese steel producers were guilty of an "unfair trade practice" by selling stainless steel pipe and tube below the cost of production and the commission said it will order them to halt the practice shortly.
In making the ruling, on a four-to-two vote, the independent commission appeared to be encroaching on an area of trade enforcement that has resided traditionally and by law at the Treasury Department.
While the International Trade Commission found the Japanese producers guilty of "predatory pricing," the definition of predatory pricing is similar to dumping violations that are ruled on by Treasury.
In fact a parallel dumping investigation is being carried out at Treasury, based in part on information supplied by the International Trade Commission.
The President may overturn the International Trade Commission's ruling within 60 days and the finding can be challenged in court.
Yesterday's ruling should delight steel makers and other manufacturers and labor unions who think their industries and jobs are being victimized by low-priced foreign products.
Many industries, especially the steel industry, feel that the Treasury has not been receptive enough to dumping complaints in the past, a charge that President Carter admitted last year when he established a task force to decide how best to help the financially troubled steel industry.
Last December a special goverment task force under the direction of Treasury Undersecretary Anthony M. Solomon devised a special program to help the industry, the linchpin of which a set of minimum prices for steel imports that is supposed to go into effect this month.
If steel comes into the country below the minimum, or reference prices, the Treasury will launch an accelerated dumping investigation to determine if the product is being sold below the cost of production. If a dumping finding is made, the agency then levies a duty.
In yesterday's ruling by the International Trade Commission, a body established by Congress to administer the 1974 trade laws no duties will be levied. But by issuing a "cease and desist" order to prohibit the Japanese from selling at a predatory level, the commission implicitly sets a minimum price for stainless steel price and tube.
Specialty steel products, like stainless pipe, are not a part of the administration's trigger price system. Many specialty products, however, are under a special quota established in 1976, although pipe and tube are not. Imports of stainless pipe and tube total about $20 million a year.
Administration officials, especially at the Treasury and State Departments, have been unhappy with some previous trade commission decisions, feeling that the agency often makes decisions that complicate carrying out international economic policy.
The commission came close to upsetting the administration's trigger price mechanism for steel by threatening to carry its own investigation under the same section 337 of the unfair trade practices portion of the 1974 trade laws that yesterday's ruling is based on.
Treasury trade officials do not believe that what is essentially a dumping charge can be tried under the unfair trade practices section of the law.
Commission Chairman Daniel Minchew said yesterday that the ruling - the first major case that did not concern patent violations - gives the public an alternative to using the dumpling statutes to get an illegal, below-cost selling of products on the American market.
He noted that the ruling in effect extends U.S. antitrust provisions against predatory pricing - selling low to drive competitors out of the market - to foreign competitors.