The United States yesterday placed an embargo on all imports of steel pipe and tubes from the European Community for the rest of the year and cut imports for next year to less than half of the EC's 1984 shipments.
"As a result of this decision, the U.S. Customs Service will deny entry to any further shipments of EC pipe and tube for the rest of 1984 beginning at 12:01 a.m. Nov. 29 Thursday ," the U.S. Trade Representative's Office said.
The surprise move by the Reagan administration, pressed by U.S. steel makers, set off a new trade row between the United States and its closest political and economic allies of Western Europe and drew threats of some form of trade retaliation.
The EC's first move was to terminate the two-year-old agreement that allowed for limits on pipe and tube shipments to the United States. Without that agreement in force, the Reagan administration has no authority to stop imports of pipes and tubes from Western Europe, an EC spokesman here said.
That argument appeared to carry little weight with U.S. Trade Representative William E. Brock, who said the Reagan administration move followed eight months of talks during which the United States and the European Community failed to agree on new limits for imports of pipes and tubes.
Brock said that, under an 1982 agreement, European shipments were restricted to 5.9 percent of the U.S. market. By this year, however, they had surged to a 14 percent share of all sales in the United States.
An EC spokesman in Brussels, however, characterized the agreement differently. He said the EC undertook to limit its sales of steel pipe and tube to the United States to 5.9 percent, but offered no guarantee. An EC official here commented that the EC has exceeded that limit from "day number one."
The EC Council of Ministers had agreed last week to limit its exports to 7.6 percent of the market, but in a meeting Monday with high administration officials, U.S. steel makers objected strenuously to that offer. Sources said one major sticking point was a clause that would have allowed imports of pipes and tubes covered by already existing contracts to come in above the 7.6 percent limit.
"A deal's a deal," said Brock. "The clear expectation of both the U.S. and the EC was that imports of pipe and tube would not exceed the 1979-1981 average" of 5.9 percent of the U.S. market.
The action drew immediate applause from the U.S. steel industry and senators from the two areas of the country most hurt by the increase in pipe and tube imports from Europe.
"We agree completely with the decision of Ambassador Brock and the U.S. government," said Donald H. Trautlein, head of the American Iron and Steel Institute and chairman of Bethlehem Steel Corp.
"I'm delighted. This is jobs we are trying to keep in this country," said Sen. Lloyd Bentsen (D-Tex.). Sen. John Heinz (R-Pa.) said the action indicates the Reagan administration is taking seriously its commitment to cut steel imports to 18 1/2 percent of the U.S. market.
In Brussels, however, EC officials threatened some form of trade retaliation against U.S. limits on pipe and tube imports. "Nothing is excluded," said EC Industry Commissioner Etienne Davignon.
He is expected to hold a press conference today to detail any new EC moves and to emphasize a decision this summer by the U.S. International Trade Commission that the American pipe and tube industry is not being hurt by imports.
Brock, however, told reporters that the United States doesn't believe the EC has the right under international trade rules to retaliate against the U.S. embargo or the new limits set for next year.