US steelmakers stoke trade war

US steelmakers claim some foreign rivals are not playing fair

Steel firms have stoked a dispute between the US and some of its most important trade partners by demanding duties of up to 304% on imports, and charging five governments with extending illegal subsidies.

Lawyers for four US steelmakers have accused the governments of Brazil, Canada, Germany, Trinidad and Tobago and Turkey of breaking trade laws over subsidies to makers of carbon steel wire rod.

And the petition, filed with the US International Trade Commission and Commerce Department, demanded duties of up to 304% on steel imports from 11 countries on grounds that they were being sold cheaper in their domestic markets than in America.

The move come amid mounting tension, which many observers believe is being fanned by the economic downturn, between the US and trade partners.

US President George Bush in June ordered an investigation, which could lead to the imposition of trade barriers, into steel imports, a move condemned by, amongst others, European Union Trade Commissioner Pascal Lamy.

Last month nine countries lodged a complaint with the World Trade Organisation (WTO) over the United States' anti-dumping policy.

Loan claims

The US steelmakers alleged that the five governments named have given aid in the form of measures such as export and investment incentives, preferential loans and debt write-offs.

The 11 countries on which levies have been demanded are Brazil, Canada, Egypt, Germany, Indonesia, Mexico, Moldova, South Africa, Trinidad and Tobago, Ukraine and Venezuela.

The steelmakers also claimed that imports from other countries, including Argentina and India, are also being dumped, but in too small quantities to warrant a legal challenge.

"We will be monitoring imports throughout the investigation to determine whether countries not covered by the cases attempt to increase their dumped and subsidised imports into the United States," said Paul Rosenthal, lawyer for the US steel companies.

"The petitioners are prepared to file additional cases if the facts warrant such action."

The US steelmakers behind the petition, which has launched a year-long process, are Co-Steel Raritan, GS Industries, Keystone Consolidated Industries and North Star Steel.

The investigation process will open with a 45-day investigation by the ITC, which must make a preliminary roiling on whether the imports are damaging US industry.