The Commerce Department is expected to announce today that it has found evidence that foreign governments have unfairly subsidized their steel industries, a decision that could heighten trade tensions across the Atlantic and result in retaliation against U.S. goods by European trading partners.
By last midnight, the Commerce Department was required to file its preliminary determination in subsidy cases against nine countries, including seven from Europe. Representatives of the Common Market have warned that this preliminary ruling could force their countries into a trade war with the United States that would block imports on both sides of the Atlantic.
Seven U.S. steel makers charged on Jan. 11 that a substantial part of European steel imported last year was priced low because of subsidization by foreign governments.
Last year steel demand in the United States totaled 104 million tons, including 6.4 million tons from Europe.
Common Market countries accused of subsidizing 11 steel companies are West Germany, France, Italy, Great Britain, Belgium, The Netherlands and Luxembourg. Brazil and South Africa also were accused of subsidizing steel companies.
In all, the Commerce Department will reach a preliminary decision on 28 cases involving different types of steel from the nine nations.
If the department rules that the accused countries helped their own depressed steel companies sell at low prices in the United States, the odds are greatly increased that heavy financial penalties will be levied against their imports by fall.
In each case where subsidization is determined, the department will begin collecting import fee bonds for the specific type of steel product.
The department is scheduled to issue its final ruling Aug. 24. The United States' International Trade Commission then would have until Oct. 8 to decide whether the imports harmed the domestic steel industry.
A week after the ITC deadline, the Commerce Department could impose retroactive countervailing import duties that would price the European steel out of the domestic market.
The seven steel makers who filed the countervailing-duty suits against the Europeans are U.S. Steel Corp., Bethlehem Steel Corp., Jones & Laughlin Steel Corp., National Steel Corp., Republic Steel Corp., Inland Steel Corp. and Cyclops Steel Corp.