The Reagan administration sent a warning to foreign steel producers yesterday, saying it will charge Romania, Belgium, Brazil, South Africa and France with unfair trade practices involving their steel exports.
The action, labelled "dangerous" by the European Common Market, accuses all of the foreign governments except Romania of injuring the U.S. steel makers by subsidizing the production of steel that they then sell in the United States at unfairly low prices. Romania will be charged with dumping, that is, with injuring the U.S. steel market by selling steel here below what it cost to make it. Both actions could result in stiff duties levied against the five countries' steel exports to the United States.
"The countries are geographically diverse and the products so important as to put world producers on notice that the United States is serious about enforcing its trade laws," said Commerce Secretary Malcolm Baldrige.
The action is the first of its kind by the government, and it threatens to set off a trade war with Europe, which considers initiation of such complaints by the U.S. government a hostile gesture. An official of the European Economic Community, representing France and Belgium, repeated their contention that the action is "dangerous and questionable" and added, "We're not concerned that the cases chosen by the Commerce Department show convincing proof of injury." Spokesmen for the other countries couldn't be reached for comment last night.
The cases involve carbon steel plate, except for France, which is accused of subsidizing hot-rolled sheet.
"We applaud the action of the Department of Commerce in commencing its countervailing-duty and dumping investigations announced today," said a spokesman for the American Iron and Steel Institute. "These actions confirm what the steel industry has been saying for a long time about the nature and pervasiveness of foreign steel subsidies."
Several U.S. steel companies have said they may file their own complaints, too. For example, U.S. Steel Corp. said it will file at least nine countervailing-duty and dumping complaints against European steelmakers by Dec. 1. U.S. Steel Chairman David M. Roderick had said that he will file complaints because the Commerce Department's plan "wasn't broad enough."
The Commerce Department's action yesterday fulfills Baldrige's threat last week to file the complaints. The administration said it has consulted with the governments of all of the countries involved and the EEC on the complaints.
Meanwhile, the U.S. International Trade Commission, in an unrelated steel case, said yesterday that the government should continue to investigate charges of dumping brought by Lukens Steel Co. against a Japanese producer of steel clad plate because a "reasonable indication" exists that the U.S. firms have been or will be injured.
Lukens last month accused Japan Steel Works of selling steel clad plate about 14 percent less than fair market value for three large petrochemical projects in Kentucky, Louisiana and Oklahoma. Steel clad is stainless steel bonded to a thicker layer of less-expensive carbon or low-alloy steel. It is used in petroleum refinery and petrochemical vessels and is not covered under the trigger-price mechanism.
The commission's decision doesn't mean the Japanese firm is guilty of dumping, but that enough evidence exists to warrant further investigation. The case, which could take several months, now goes to the Commerce Department to determine whether the Japanese steel was sold here at less than its fair market value.