The Carter administration yesterday suspended the "trigger price" support system for the nation's steel indusrty after U.S. Steel Corp. filed dumping complaints against seven European countries.
The suspension backs up months of administration threats to suspend the minimum steel import price requirements, if a major antidumping case were filed.
U.S. Steel President David M. Broderick, who for months had threatened to file the complaint if nothing were done to help domestic steel makers, made good on his warnings by filing 80 cartons of complaints with the Commerce Department and the International Trade Commission shortly after 10 a.m. yesterday.
Suspension of the trigger price mechanism by the Commerce Department could be lifted if the petitions are withdrawn "or otherwise satisfactorily resolved," Commerce officials said.
The U.s. sTeel case could take as much as a year on as little as 20 days, which is the deadline for Commerce to decide if the case should be heard. Within 45 days, the ITC must make a preliminary decision on whether the steel industry was injured, and Commerce has up to seven months to determine whether imports are being sold at prices below their fair value.
Meanwhile, the European Economic Community commission "has not reacted officially" to the U.S. Steel case. EEC representatives and U.S. officials are discussing the case and the suspension of trigger prices in Belgium, and EEC spokesman here said.
"The commission is quite dissatisfied with the suspension of the trigger price mechanism," the spokesman continued. "This is contrary to what the Carter administration was asked to do."
Western European steel producers were reacting cautiously to news of the suit as were domestic steel makers.
Industry sources feared that the suspension would trigger trade wars and a snowballing of protectionist moves by other countries. Some industry experts also suggested that European producers could flood U.S. markets with cheap steel once the trigger prices were suspended. Others said that foreign steel producers would not operate in U.S. markets for fear that a decision could be granted in U.S. Steel's favor and heavy duties would then be levied on them.
For example, the French steel makers may suspend exports of some steel products to the U.S. -- such as cold rolled sheets often used in automobile manufacturing -- pending the outcome of the case, Reuther news agency said.
The Eec spokesman said that the commission does not anticipate a trade war or retaliation, but he added, "Once you begin a protectionist policy," other countries could do the same.
The spokesman also suggested that some steel producing countries could react cooly to Carter administration pleas in connection with the Soviet invasion of Afghanistan.
While the EEC is reserving judgement on the U.S. Steel case until study of it is complete, the spokesman said the commission feels that the steel producers in the seven countries involved -- France, Belgium, Luxembourg, Italy, the United Kingdom, the Netherlands and West Germany -- will be cleared.
U.S. Steel announced Thursday that it would file the complaints. That announcement came less than 24 hours after the Commerce Department left the trigger prices for second-quarter imports unchanged. U.S. Steel officials had warned the administration they would file the dumping charges unless they received some additional trigger price relief.
The trigger prices set the minimum prices for steel imports based on the costs of the most efficient foreign producer (Japan). The system was conceived two years ago as an alternative to major antidumping cases and was created by the Carter administration to head off a possible trade war when U.S. steel producers filed numerous anti dumping cases about three years ago.
Commerce said yesterday that it suspended trigger prices because "with the filing of major antidumping petitions by U.S. Steel Corporation. . . . the basis upon which the trigger price mechanism was maintained no longer exists."
U.S. Steel contends that in addition to importing steel at prices below fair market values, the foreign companies injured the U.S. steel industry by contributing to the loss of 100,000 steel workers jobs and the poor financial shape of the industry.