The International Trade Commision yesterday took a major step closer to finding steelmakers in seven European countries have been dumping their products in the United States -- a decision that could trigger an international trade war.
The commission, voting on the nation's biggest tariff controversy, ruled it found "a reasonable indication" the U.S. steel industry is being injured by low-priced steel imports from Europe.
The ruling means U.S. Steel Corp., which filed the complaints, presented enough evidence to warrant further investigation. This, in turn, could lead to large tariffs being levied against the steel importers.
The European Economic Community Commission was unavailable in Brussels yesterday because of the May Day holiday, a spokesman here said.
But the spokesman said the decision could affect talks between the U.S. and signers of the Multilateral Trade Negotiations agreements held every six months to iron out problems. The next meeting is scheduled for Brussels at the end of this month, the spokesman said.
"There's no doubt that it doesn't help the atmospherics of trade talks." the spokesman continued. "This issue and others will be discussed at these high-level meetings."
The spokesman added there is "constant traffic of discussion between the (Carter) administration and (the EEC) on this and other trading matters."
"I resist the term 'trade war,'" the spokesman said. "This is one issue only. There are other trade issues." The spokesman emphasized that he is still optimistic of the final outcome of steel dispute.
Some representatives of the European companies, after tensely waiting during the complicated voting process, said they were "disappointed" with the vote and warned it could lead to trade repercussions from the Europeans.
"We're talking about $1 billion plus trade from Europe," said attorney Alfred R. McCauley, who spoke on behalf of most of the others countries at hearings last month. "Any time that amount of trade is affected it could have repercussions."
Another attorney said "the prospect is there" for a trade war, the first since the late 1920s when new trade barriers were put up by the United States.
The Carter administration had hoped to avoid any trade disputes or wars, and threatened U.S. Steel with its own retaliation if the antidumping cases were filled.
"What we tried to do is suggest to the administration" the antidumping procedure not be started, the EEC spokesman explained yesteday. "But it wasn't the administration's gift to do so."
The ITC's decision concerned only one of two parts of a dumping determination. A complaining company must prove imports were brought in at prices below their fair value and such pricing injured the domestic market. The finding yesterday was only a preliminary step and does not constitute a finding of dumping or injury.
The accused countries are France, Belgium, Luxembourg Italy, the United Kingdom, The Netherlands and West Germany. The steel products are mainly used in building construction and automobile production.
The steel issue has become even more sensitive because the United States is trying to gain cooperation from countries named in the complaint as it trys to deal with problems in Iran and with the Soviets in Afghanistan, and, as the EEC spokesman noted, the U.S. government needs to work out expected problems in implementing the recent multinational trade negotiation agreements.
The ITC earlier in the day recommended a ruling in favor of the domestic steel industry and presented its conclusions to the five commissioners before voting.
The staff said the volume of imports from Europe continues to be significant here. The staff also said during the first four months of this year, the domestic steel industry suffered declining sales, rising unemployment and underemployment and underutilization of capacity. The rest of the year is expected to be no better, the staff concluded.
In addition, the staff concluded the margins of underselling by the Europeans was as much as 20 percent and domestic producers often had to lower prices to increase sales.