The Clinton administration presented a plan yesterday to help the U.S. steel industry fend off cheap imports, and it got a warm response from the industry and its main union, which up to now have been harshly critical of the White House for failing to act aggressively enough.
The plan, which was announced after a White House meeting attended by industry executives and labor leaders, includes pledges to investigate government subsidies given to foreign steel producers. American steelmakers were themselves the beneficiaries of subsidies in a bill given final approval by Congress on Wednesday, which provided more than $1 billion in federal loans and loan guarantees. White House officials told attendees at the meeting that President Clinton will sign the bill.
The moves came after nearly a year of acrimony between the administration and the steel industry over how to address a surge of low-priced imports, mostly from countries stricken by financial crises such as Russia and South Korea, that crested last autumn and contributed to a wave of bankruptcies and layoffs.
The industry, its unions and supporters in Congress have accused the administration of being overly concerned about preserving free trade, presenting Vice President Gore with a problem in his efforts to court labor support for his presidential bid. Tensions heightened in late June when the Senate, with White House backing, declined to limit steel imports.
By contrast, harmony prevailed as yesterday's plan was released.
Clinton, noting that imports have dropped sharply after the imposition of anti-dumping duties against some foreign steelmakers, said in a statement: "Now we must ensure that imports remain at pre-crisis levels and give the industry a chance to regain its competitiveness--even as we put in place measures to prevent any recurrence." Commerce Secretary William Daley vowed, "We will not let up on this issue."
Curtis "Hank" Barnette, president of Bethlehem Steel Corp., said after the meeting: "Today may be, may be, a memorable day in the history of our industry," though he added that "the details still need to be worked out." George Becker, president of the United Steelworkers of America, said the administration's initiative "does not automatically guarantee the steel crisis will be solved, but it does provide an opportunity to develop trade policies that ensure other countries play by the rules."
Sen. John D. "Jay" Rockefeller IV (D-W.Va.), one of the industry's congressional champions, said, "The plan they presented today is a significant step in the right direction."
The plan includes a pledge to continue threatening Japan with trade sanctions unless its steel shipments to the United States remain below pre-crisis levels. The administration said it will also expand its monitoring of steel imports to guard against a renewed surge, and it will propose a high-level international conference on "unfair practices that support economically unjustifiable steel capacity."
For the industry, one of the most important messages may be the assurance that the administration will continue to zealously support and enforce anti-dumping laws, which impose penalties against foreign producers found to be selling at prices unfairly below market levels.
Gary Hufbauer, a trade expert at the Institute for International Economics, noted that many countries have proposed using the upcoming round of global trade negotiations to limit the scope of anti-dumping laws, but the administration is clearly signaling that Washington will resist.