Two Reagan administration cabinet members said yesterday that the trigger-price mechanism, which in effect protects U.S. steel prices, will be destroyed if the domestic steel industry goes ahead with plans to file massive allegations of unfair trade practices against foreign steel makers.
Commerce Secretary Malcolm Baldrige, during a breakfast with reporters, and U.S. Trade Representative William E. Brock, at a luncheon with Washington Post reporters and editors, said tensions between the United States and the European Economic Community are becoming more strained, particularly because of the steel problem, and could result in some sort of retaliation from the Europeans.
Baldrige also suggested that the Commerce Department, which last week took the unprecedented step of initiating complaints against five countries, may file more cases next week.
"If there is going to be a massive number of suits, I think that probably would bring the end of the trigger-price mechanism and that could lead to an increase in the possibility of a trade war," Baldrige said. "That danger is always there. What we're trying to do is bring some selective cases to clearly indicate that we're going to enforce the trade laws."
Brock said the filing of massive complaints by U.S. steel companies would destroy the trigger-price mechanism because Commerce Department officials wouldn't be able to handle all of them. What then? "Then we go back to the General Agreement on Tariffs and Trade and full enforcement of U.S. law."
Baldrige said that the government may file more complaints after an investigation of surges in certain steel imports is completed next week. "We'll bring as many suits as we feel we have a good chance of proving," he said.
The trigger-price mechanism was established several years ago to monitor steel imports and to trigger an investigation of those imports sold here below set levels. It was suspended in March 1980 after U.S. Steel Corp. filed antidumping complaints against steel makers in seven European producing countries. It was reinstated six months later after U.S. Steel agreed to withdraw its complaints in response to a supposedly strengthened system.
However, recent influxes of European steel have forced the Commerce Department to initiate complaints in an attempt to prevent the domestic industry from filing large numbers of its own. But U.S. Steel Chairman David M. Roderick also said he is filing complaints against nine countries to complement the Commerce Department's list.
A U.S. Steel spokesman had no comment yesterday on Baldrige's and Brock's remarks about destruction of the trigger prices.
The U.S. companies "can force the downfall of the TPM if that's their decision," Baldrige said. He couldn't say, however, how many suits the Commerce Department could handle without abandoning the trigger prices.