Commerce Secretary Malcolm Baldrige, in an unprecedented move expected to further trade tensions with Europe, yesterday said that he will retroactively impose duties on foreign steelmakers found to have flooded U.S. markets with cheap, subsidized steel.
Baldrige, following pressure from the steel industry and Capitol Hill, warned European and other steelmakers that he will invoke an untested section of the Export Administration Act of 1979 allowing him to impose the penalties retroactively. Commerce plans to make preliminary findings next month on 55 steel complaints brought by the nation's largest steelmakers, and Baldrige's decision means those penalities could be imposed on shipments that arrived here as far back as March.
Usually, tariffs are imposed the day a preliminary finding is made.
The action could impose millions of dollars of duties on steelmakers under investigation by Commerce for allegedly violating antidumping and countervailing duty laws. The countries involved are Belgium, West Germany, France, Italy, Luxembourg, the Netherlands, the United Kingdom, Brazil and South Africa. The steel industry complaints allege that steel from those countries hurt the U.S. industry because they were government subsidized or sold here at prices less than the cost of production.
Baldrige's action was taken to penalize any foreign steelmakers who may have rushed shipments of unfairly priced steel here before Commerce could make preliminary antidumping and countervailing duty findings, Commerce said.
"Retroactivity serves notice on importers and foreign suppliers that we will not allow the law to be flouted," Baldrige said.
EEC officials in Washington said they had not been officially notified of Baldrige's action.
The U.S. industry complaints were filed following high levels of market penetration by foreign steelmakers last year. Steel imports were historically high in January, but have declined in the last three months. Still, steelmakers said foreign producers captured a record 22.8 percent of the U.S. carbon steel market during the first quarter this year.
Rep. John D. Dingell (D-Mich.) wrote Baldrige May 3 asking him to impose the retroactive duties, saying, "This economic warfare by our European allies has devastated steel communities throughout the country and pushed 80,000 steelworkers in unemployment lines."
On June 10, Commerce is scheduled to make preliminary determinations on 28 of the 37 countervailing duty cases pending and decide whether those imports were subsidized by foreign governments. On June 21, Commerce is supposed to decide in the 18 antidumping cases whether imports were sold here at less than their fair value.