The International Trade Commission found yesterday that rapidly increased imports of specialty steel products, largely from Japan and Western Europe, have hurt domestic producers to the degree they require the protection of either higher tariffs or import quotas.
The commission said it will recommend to the White House early in May what type of relief it thinks would best help the $2-billion-a-year industry. Industry sales dropped from a normal $2.5 billion a year to $2 billion.
The decision provides ammunition for the Reagan administration in any negotiations on possible limits on the export of specialty steel to American markets. Last year, the European Economic Community agreed to limit imports in the larger carbon-steel market.
Adolph J. Lena, chairman of the industry advisory commission, welcomed the ITC decision as "confirmation of the tragic fact that our industry has been severely injured by imports, most of which are coming into our markets in violation of our laws."
The specialty steel industry, which accounts for only 2 percent of all steel tonnage but 10 percent of its value, produces the high-priced stainless and rustproof steel products vital to modern industry. It is used in the manufacture of roller bearings, stainless tableware, rifle barrels, nuclear power plants and ocean-going ships.
The investigation covered imports from Japan, West Germany, France, Sweden and Spain, among other countries.
"Imports have increased during the time of our investigation," said ITC Chairman Alfred Eckes. "There is incontrovertible evidence of serious injury to the domestic industries. Employment is down, production has fallen and profits are lower . . . There is abundant evidence of underselling at the same time that foreign market share expanded."
Eckes and Commissioner Veronica A. Haggart found that all four categories of specialty steel covered by the ITC investigation--alloy tool steel, stainless steel bar and wire rod, stainless steel sheet and strips, and stainless steel plate--have been injured by imports. The third commissioner, Paula Stern, disagreed in the case of stainless steel plate, where she found imports were not as important as other factors for the industry's decline.
President Reagan requested the ITC investigation last November after a consortium of 16 American firms complained that foreign competitors had an unfair advantage in the U.S. market because they received subsidies from their governments. The domestic industry blamed a loss of as much as one-third of their business and 60,000 worker layoffs on cut-rate imports.
The petitioners' allegations "are well-founded," Reagan said in a memo to U.S. Trade Representative William E. Brock ordering him to request the ITC investigation.
"The United States believes that subsidies have been provided by the government of Austria in the form of grants and capitalization, by the government of Sweden in the form of preferential loans, loan guarantees and grants, and by the European Community and its member governments in the form of preferential loans . . . and other practices."