Automotive coalition urges President to terminate steel tariffs

Sept. 23, 2003
In response to the Sept. 19 release of the International Trade Commission's (ITC) assessment of the steel tariffs, the members of the Automotive Coalition
In response to the Sept. 19 release of the International Trade Commission's (ITC) assessment of the steel tariffs, the members of the Automotive Coalition on Steel Tariffs are urging President George W. Bush to terminate the tariffs as soon as possible. The ITC report confirmed that U.S. manufacturers of automotive parts and components have been among the hardest hit of any U.S. industry. The steel tariffs were imposed by an executive order in March 2002.The ITC report findings certify that the U.S. economy has suffered under the tariffs and that U.S. steel-consuming manufacturers are shifting their procurement and production plans to overseas firms, placing U.S. jobs and investments in jeopardy. It specifically notes that the tariffs have resulted in losses totaling $680 million, in decreased returns on capital and labor, to manufacturers of automotive products and other steel consumers in the United States."This report verifies the statements and evidence offered by numerous U.S. steel consumers including Textron Fastening Systems over the past 19 months. Steel consumers in the United States have suffered significant financial losses as a direct result of the tariffs, at a time when U.S. manufacturing overall has experienced a significant decline in both employment and international competitiveness. There is no doubt that the tariffs have notably weakened leading sectors of the U.S. economy," said Richard Clayton, President, Textron Fastening Systems, on behalf of the Coalition.The ITC report contained the findings of two separate investigations. The midterm review analyzed the impacts of the tariffs on the domestic steel industry, and a separate investigation assessed the impact of the tariffs on domestic steel consumers, including the automotive parts and components industry.Nearly three-fourths of automotive parts and component manufacturers reported changes in contract prices for steel. The study also found that 87 percent of manufacturers of automotive products report that steel prices in the United States were higher than global prices and 31 percent reported that their customers were now buying finished parts or assemblies overseas as a result of the tariffs."The data contained in the report supports our industry's position against the tariffs," Clayton said. "Historically, the automotive parts industry has purchased 95 percent of its steel from domestic steel producers, making it one of the largest consumers of U.S.-produced steel. But, as soon as the tariffs hit, contracts were broken, problems with steel quality and delivery began to appear and prices shot up."To further complicate the issue, the World Trade Organization (WTO) has determined that the steel tariffs are a violation of international trade rules. The United States has appealed the ruling and the WTO is set to issue a final decision in November. If the United States loses, other foreign countries have said they will immediately impose more than $2 billion in retaliatory tariffs on industries unrelated to steel, such as agriculture and clothing.The ITC study also substantiates widespread claims that U.S. manufacturers of automotive products, as well as steel fabricators, will suffer additional damage if the tariffs continue. Both industries indicated that employment, profitability and international competitiveness would further decline if the tariffs remained in place. The Coalition urges the President to act swiftly to prevent further losses in U.S. jobs, investment and competitiveness and to repeal the steel tariffs.The Automotive Coalition on Steel Tariffs represents U.S. manufacturers of automotive products, including original equipment and aftermarket parts, components and accessories, and specialty and high performance automotive products. The ITC report in its entirety is available at . For more information about the Automotive Coalition on Steel Tariffs contact Neil Zipser, MEMA, at [email protected] , Lee Kadrich, AAIA, at [email protected] , or Stuart Gosswein, SEMA, at [email protected] .