Thousands more Corus jobs 'at risk'

The US decision is critical for British steel workers

Britain's largest steel producer, Corus, is to warn that thousands more jobs are at threat, according to the Independent on Sunday.

New trade proposals being drawn up by the US could limit exports of British steel and threaten the future of five of the UK's steel plants.

Corus has warned that if the trade restrictions are imposed, steel plants at Rotherham, Stocksbridge, Teeside, Scunthorpe and Ijmuiden will be hit.

These five plants employ a total of 18,000 workers.

Corus has already made 6,000 workers redundant this year, primarily in Wales, due to an excess of capacity.

Global meltdown

The job cuts prompted a mass of bad publicity and stinging criticism from the unions and the government.

But the Anglo-Dutch company has been adamant in explaining that there is simply too much steel on the market and production needs to be cut if it is to return to profitability.

The downturn in the steel industry means that steel prices have fallen to a ten year low, hitting the US industry as hard as Europe.

Eighteen US steel companies have filed for bankruptcy in the past four years.

US protectionism?

This has led the US trade authorities to investigate whether tough taxes should be imposed to curb imports of steel from outside the US in order to protect the domestic industry.

The US imports currently imports around one fifth of its steel - around 22.2 million tons.

Corus exports about 1.3 million tones of steel a year to the US, around 6.5% of its total production.

If the US trade authorities adopt the new taxes, these British exports are likely to cease.

It could also mean that Europe becomes flooded with steel from other producing countries, such as Japan, that can no longer export to the US.

Steel war intensifies

Earlier this month, Corus wrote to the Trade and Industry Secretary Patricia Hewitt, urging a dialogue with US authorities.

"The US steel industry needs to get itself into shape rather than running to the US authorities for help," said a spokesman for Corus.

But the EU has already come up against a brick wall when trying to negotiate with the US about steel duties.

EU Trade Commissioner Pascal Lamy has met with his American counterpart Donald Evans but said that there was nothing that the EU itself could do.

The EU has now referred the problem to the World Trade Organisation.