U.S. Trade Representative William E. Brock, acting on complaints by the U.S. specialty steel industry against seven steel importers, initiated an investigation yesterday of unfair trading practices against specialty steel imports from Britain, France, Italy, Sweden and Austria.
The specialty steel industry and the United Steelworkers of America had alleged the stainless and alloy tool steelmakers receive massive foreign government subsidies that allowed them to sell steel here at unfairly low prices.
In another matter, Brock told a luncheon meeting with reporters that it is "very possible" for a trade war to erupt because of "intense pressure" for protectionism in all major trading countries.
Brock did not proceed with investigations against Belgium and Brazil, a spokesman said. The Belgian company cited in the complaint does not export specialty steel to the United States, the spokesman said. In the case of Brazil, the United States is precluded from challenging export subsidies as long as Brazil has a commitment to eliminate those subsidies, the spokesman said.
"The acceptance of our petition as announced today by Brock is an important first step," said a joint statement issued by the steelworkers union and the Advisory Committee of the Specialty Steel Industry. "With vigorous prosecution of illegal trade practices, unfair ones, finally, can be stopped along with their devastating effect upon American workers and industry."
However, the groups also said they will file more information with Brock's office to review the petitions against Belgium's specialty steel producers. They also said they may file countervailing duty cases against Brazilian subsidies with the International Trade Commission and the Commerce Department.
Brock has until October to decide the cases and make any recommendations to the president, who has a wide range of penalties at his disposal such as tariffs or quotas.
The American Institute for Imported Steel blamed high domestic production and labor costs and a strong U.S. dollar for the competitiveness of foreign steel.
Meanwhile, Deputy U.S. Trade Representative David R. Macdonald told a House subcommittee that the Japanese have agreed to start in October talks concerning liberalizing quotas on beef and citrus imports.