US steel tariffs 'cost thousands of US jobs'

Steel industry groups have rejected the claim

By Andrew Walker BBC Economics correspondent

Tariffs imposed on steel imports to the United States last year are largely responsible for the loss of nearly 200,000 American jobs, a business lobby group has said.

The Consuming Industries Trade Action Coalition (CITAC) says the number of job losses is greater than the total number of people employed in the steel industry.

The tariffs announced by US president Bush last year were intended to protect steel companies and workers from a surge in imports, much of which, the industry maintained, were either unfairly subsidised or dumped - sold for less than the cost of production.

But in a new report the lobby group said the effect has been to raise the price of steel.

Mixed views

The result, they say, has been devastating to many steel consuming businesses, especially small ones.

The report also says that some customers of those steel consuming companies have switched to suppliers outside the US.

"Every one of my customers is talking of taking their business offshore," Jim Zawacki, the owner of Michigan-based vehicle parts maker GR Spring & Stamping told BBC World Service Radio.

One CITAC member said the US cannot continue to have a trade policy that protects the few at the expense of the majority.

Steel makers have much greater lobbying power in Washington than their customers, who tend to be small firms, according to CITAC report author Laura Boffman.

As steel-consuming firms have lost 200,000 jobs while manufacturers provide 180,000 jobs, "we have absolutely shot ourselves in the foot," she told the BBC's World Business Report.

Steel industry groups have rejected the report's conclusions, saying they take too little account of the impact of the US economic downturn on engineering jobs.

A spokesman for the American Iron and Steel Institute argued that the price rise early last year was due to the closure of a number of steel making companies, and that prices have subsequently fallen.

He said that the US industry has been under attack from foreign countries and spoke of periods of flagrant illegal dumping.

He added that with the war on terrorism and the prospect of conflict overseas, a healthy steel industry is essential for national security.