A major U.S. steel rod producer yesterday filed suit seeking to reimpose the controversial trigger price mechanism which the Carter administration suspended last month.
Korf Industries Inc. of Charlotte, N.C., filed the request for a preliminary injunction in U.S. District Court here against several Commerce Department officials who suspended the mechanism in retaliation for the filing of complaints by U.S. Steel against seven European countries. U.S. Steel alleged that the countries were dumping their products here, or selling steel here at prices below their costs of production.
The two-year-old trigger price system is intended to automatically trigger a government investigation that can result in stiff duties against the foreign producers if their products are imported below the trigger price for a particular product. The price is based on the cost of production by the most efficient producer -- Japan.
For months the Carter Administration threatened to suspend the trigger prices if a major antidumping case were filed. U.S. Steel had threatened to file complaints if nothing was done to help domestic steel makers. U.s. Steel filed the complaints after the administration refused to raise trigger prices for the second quarter this year.
The Korf suit alleges that suspension of the trigger prices was "arbitrary and capricious," violates a written agreement between government officials and the company and was made without consideration of its effects on the steel industry "or the jobs of tens of thousands of steel workers."
The suspension of the trigger price mechanism is an "overreaction," said Korf Presdient Roger R. Regelbrugge at a press conference yesterday. "As a tactic in the government's negotiation with only one company -- U.S. Steel -- the government is holding the rest of the industry hostage."
Korf contends that the suspension of the trigger prices "will have the direct and predictable results of permitting foreign steel manufactures to sell in the United States at prices below cost of production or home market prices without (Commerce) fulfilling its statutory mandate to 'self-initiate' investigations of such sales."
Under questioning, however, Regelbrugge said that he had no indication that any foreign producer planned to sell products here below the recently suspended trigger price levels.
"We believe we cannot wait until we have the evidence" of lower-priced imports "because four months could have gone by," Regelbrugge said. Besides, he added, evidence of price changes by foreign producers cannot be gathered so quickly.
Regelbrugge said, "There's no question that there is dumping going on today. The steel industry around the world is continuing to use our market for their excess production."
The Korf president also said other industry officials "would much prefer putting the trigger-price mechanism back in place rather than to try now to go in the direction of anti-dumping. It's a long route and it has no remedy."
The suspension "is a deliberate expression of Commerce's intentions not to enforce the Antidumping Act and as a statement of intended violation of a statutory mandate is patently illegal," the suit said.
In addition, the company alleged that the government agreed to continue to carefully monitor wire rod under the trigger-price mechanism in a 1977 written agreement with Korf.
Korf said it has asked for a hearing on the case of May 19, when Commerce may answer the charges, a Korf lawyer said.
Meanwhile, the Commerce Department is set to decide tomorrow whether it will accept U.S. Steel's antidumping case, a Commerce official said. Commerce officials had no comment on the Korf suit.
Korf produced 1.4 million tons of steel last year and had sales nearing $500 million, Regelbrugge said.