When Viscount Etienne Davignon vists Commerce Secretary Malcolm Baldrige next week, the Common Market industry commissioner probably will suggest ways to improve the steel trigger-price mechanism and help more European steel enter U.S. markets, a Commerce Department official said.
Baldrige is "open to suggestions" although the Reagan administration has no immediate plans to alter the trigger-price system, which monitors foreign steel shipped here below certain prices, according to Gary N. Horlick, deputy assistant secretary for import administration. "We continually talk to the Europeans and Japanese and everyone else," Horlick said. "There's always someone who feels the TPM isn't working in their interest."
Horlick said he doesn't know exactly what Davignon may ask Baldrige to consider and what other subjects will be discussed at the meeting on Sept. 17. But the Europeans aren't satisfied with the TPM although steel imports have jumped to about 20 percent of steel consumed in the United States so far this year. They claim they are being shut out of the steel sheet market here. While the strength of the dollar has made their steel products less expensive, they still must sell steel here at the old trigger-price levels that don't take the dollar's gains into account, Horlick said.
In addition, the trigger prices are based on the costs of production -- including the freight charges -- of Japanese producers, who are considered the most efficient. The Europeans claim that it costs them less to ship to the Great Lakes than it costs the Japanese to ship there, but under TPM rules they must include Japan's cost in their own price calculations.
Meanwhile, the Commerce Department is examining surges in four steel products from South Africa, Canada, the United Kingdom, Spain, France and Romania to determine if their high levels of penetration here are caused by dumping, that is, by selling products at prices below what it cost to produce them. However, those products don't constitute a large part of the steel market, and the examination isn't yet a formal case, Horlick said.
Most of the rise in steel imports is in pipe and tube resulting from the boom in oil drilling and pipeline production, Horlick said. U.S. industry isn't able to meet the sudden jump in demand caused partly by energy deregulation. In addition, many U.S. firms find it cheaper to buy semifinished steel such as steel slabs from foreign steelmakers than to use energy to turn on their own blast furnaces, he said.