US steel panel calls for tariffs on imports

The ITC findings could impose tariffs of up to 40%

US steel workers have welcomed proposals to impose tariffs of up to 40% on imported steel by a trade commission that is trying to restore health to the embattled domestic industry.

The steep tariff was just one suggestion put forward by the International Trade Commission (ITC), a US agency, which undertook an investigation into the domestic steel industry over the summer.

Rolled steel is one of 16 products that could be taxed

While the six-panel member failed to agree on the precise remedy for slowing steel imports, a general consensus surfaced that tariffs ranging from 5% to 40% should be placed on 16 steel products.

The chairman of the commission, Stephen Koplan, has recommended new tariffs of 8% to 20% on several steel products.

The commission is due to formally report its recommendations to George W Bush on 19 December, at which point the president will have 60 days to act on the proposal.

Restricting imports

Friday's recommendations followed findings made public earlier this autumn by the ITC that cleared the way for President George W Bush to impose import restrictions on steel products

The ITC said in October that some foreign steel products harmed the domestic industry.

Some imported steel products - such as hot-rolled, cold-rolled and slab steel - hurt US industry, the panel concluded. Under "Section 201" trade law, President Bush could impose quotas or tariffs or both to protect the US steel market.

Mr Bush asked the panel to review steel imports in June following three years of bankruptcy filings by nearly two dozen steel firms.

Findings criticised

The top steel exporters to the US include the EU, Canada, South Korea, Japan, Mexico, Turkey, Brazil, China, Russia, Taiwan, South Africa, Argentina and Ukraine.

The European Union, South Korea and Japan have criticised the panel's findings.

US steel importers have warned the ruling risked triggering a trade war and have said the ruling would do nothing to solve problems facing the domestic steel industry.

They also have warned import restrictions could severely damage the already fragile global economy by triggering a new round of protectionism around the world.

The ITC investigation was launched in June, after an intensive lobbying campaign by the steelworkers union after thousands of job losses.

Keeping the home fires burning

Separately, LTV Corporation, a steel company in Cleveland agreed on Thursday to keep its coke ovens and blast furnaces on a slow burn until union members and others have a chance to secure financing to keep the bankrupt steel maker going.

The deal as hammered out would mean, however, that LTV could cease manufacturing steel as soon as a judge signs off on the agreement.

LTV is but one of 26 US steel firms that have filed for bankruptcy in the US in recent years.