Seven of the nations largest steelmakers announced yesterday that they will file massive and unprecedented trade complaints next week against the European Common Market and other major industrialized countries outside the EEC, threatening to throw the already tense relations among the Western powers into further disarray.
Commerce Secretary Malcolm Baldrige told reporters yesterday that despite efforts by the Reagan administration, the Europeans were unwilling to assure the American industry that their steel companies wouldn't flout U.S. trade laws.
Those countries are accused of violating U.S. trade laws by subsidizing their weak steel companies, allowing them to sell steel here at illegally low prices, thus injuring the domestic steel companies and throwing thousands of American steelworkers out of work.
Baldrige said the Europeans "are the ones who got in this trouble and they're the ones who will have to get themselves out."
Investigations of the complaints by the Commerce Department and the International Trade Commission could lead to stiff duties against imports from West Germany, France, Belgium, Luxembourg, Italy, the Netherlands, the United Kingdom, Spain, South Africa and Romania.
The companies filing the complaints are U.S. Steel Corp., Bethlehem Steel Corp., and joint filings by Republic Steel Corp., Inland Steel Co., National Steel Corp., Jones and Laughlin Steel Corp. and Cyclops Corp., a specialty-steel producer.
Every type of carbon steel import except tubing will be named in the complaints, according to a steel industry expert. Some of the imports accounted for as much as 59 percent of the American market, according to Bethlehem Steel Chairman Donald H. Trautlein.
"The troubles in which the American steel industry finds itself today have nothing to do with us," said a spokesman for the EEC in Washington.
The filings will increase tensions between the United States and Europe not only in economic relations but in other areas as well, the spokesman said. "Anytime you throw a monkey wrench in things, you create havoc," the spokesman said. The complaints will result in "more tense relations in the commercial field which will have effects in other relations."
The American companies have a right to file their complaints, "but we are absolutely innocent," the spokesman said.
At the heart of the issue is the trigger-price mechanism, a system of monitoring price levels of steel imports. If foreign steel is sold here below certain levels, the government is supposed to begin investigations that could lead to stiff duties and, subsequently, a voluntary dropoff in foreign steel business here.
Baldrige said yesterday that the administration would abandon the trigger-price mechanism if the dumping complaints were filed.
The U.S. industry, suffering from soft sales caused partly by worldwide recession and intensive, expensive modernizing plans, has complained for several years that the Europeans have unfairly subsidized their industries in an effort to increase employment in their own countries.
The Europeans counter that the subsidies are not to give them a competitive edge in the U.S. market, but to help out their companies during hard economic times in the same way the U.S. government gives American firms tax breaks for depreciation and research and development.
The foreign steelmakers also are dumping, that is, selling steel here below what it costs them to make it because of the subsidies, the American steelmakers allege.
After repeated threats late last year by U.S. steelmakers that they would file protracted and embarrassing complaints against the Europeans, the Commerce Department filed 10 of its own complaints against foreign steel producers in an unprecedented action. The U.S. industry, however, said that wasn't enough.
The Europeans sent representatives here last month to try to assure the U.S. industry that their companies would not flout U.S. trade laws. However, Baldrige said yesterday that the U.S. industry apparently wasn't impressed. "They said in effect they would do their best," Baldrige said of the EEC. "They didn't guarantee" there would be no below-trigger-price-mechanism sales. "They made a good effort."
David M. Roderick, chairman of U.S. Steel, said yesterday that domestic steel shipments remained static during the past 11 months while those of foreign producers increased by 31 percent, reaching as high as 26 percent of the U.S. market last summer. Imports from Europe alone during that period rose 69 percent, Roderick said. He added that 76,000 American steelworkers are laid off.