WTO bans U.S. steel tariffs

Archiv – In a final verdict, the World Trade Organisation (WTO) has confirmed that U.S. steel import duties violate trade rules.
The EU and others – including Japan, Brazil, South Korea and Switzerland – had filed a complaint with the WTO over the steel duties, which were introduced in March last year to protect a struggling U.S. steel industry. The WTO’s Appellate Body has upheld the main thrust of an earlier decision reached in July by a panel of trade judges, although some changes have been introduced.In a final verdict, the World Trade Organisation (WTO) has confirmed that U.S. steel import duties violate trade rules.
The EU and others – including Japan, Brazil, South Korea and Switzerland – had filed a complaint with the WTO over the steel duties, which were introduced in March last year to protect a struggling U.S. steel industry. The WTO’s Appellate Body has upheld the main thrust of an earlier decision reached in July by a panel of trade judges, although some changes have been introduced.
The U.S. argued that the steel duties, which were initially set at up to 30% but which have since been lowered, were needed to protect producers against a flood of cheap imports. But a panel of WTO judges declared in July that Washington had failed to prove its industry was under real threat from imports of steel and steel products. The EU is understood to have threatened sanctions amounting to US$ 2.2 billion if the tariffs are not withdrawn.
The steel duties have also been heavily criticised by some groups within the U.S., especially car manufacturers. They claim this measure has increased the price of their materials, causing job losses within the industry and making vehicles more expensive for consumers. Financial analysts say the steel industry is strong enough to attract capital on its own even if the import levies were eliminated. But U.S. steel producers say that the tariffs are still needed to complete much-needed industry consolidation and are still fearful that sources of capital will dry up if the tariffs are eliminated.
William Gaskin, Chairman of the Consuming Industries Trade Action Steel Task Force (CITASTF), urged President Bush to drop the steel tariffs immediately. ’In addition to the continuing damage and job losses that the tariffs are causing U.S. steel consumers, the U.S. now faces billions of dollars in retaliatory tariffs by our trading partners,’ he states. ’For the sake of the U.S. manufacturing sector, it’s time to end the tariffs now. Manufacturers need some positive news and a quick end to the steel tariffs will help send a message that the President supports American manufacturers and understands the requirement that they be globally competitive.’
According to the CITASTF, a recent U.S. International Trade Commission review showed that the tariffs had cost the U.S. economy US$ 987.2 million and thousands of U.S. jobs. Numerous economic studies also conclude that the tariffs have damaged the U.S. economy to a far greater extent than they have helped the domestic steel industry.