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US slaps stiff penalties on steel imports

BS Bureau

The US President George W Bush has slapped tariffs of 8 per cent to 30 per cent on several grades of imported steel to help revive the ailing US industry.

But the penalty exempts US trading partners such as Canada and Mexico and a handful of impoverished nations.

The hardest hit nations include China, Japan, South Korea, Ukraine and Russia. On steel slabs, the president will impose no tariffs on the first 5.4 million tonne imported for three years but will impose a 30 per cent tariff on additional tonnage.

This implies a virtual closure of US market for HR products with the already prevailing anti-dumping duty, which has hit Indian exports. However, it was still not clear what tariff under Section 201 had been imposed on India.

Indian steel makers have taken the announcement in their stride. B Muthuraman, managing director, Tata Steel, said, "Our exports to the US this year is zero and last year too it was negligible. We are developing alternative markets such as China, west Asia and South East Asia."

Muthuraman said the basic problem of the global steel industry was not allowing free trade and the decision to adopt a safeguard duty would further undermine free trade. "It may help the US steel industry in the short run but the US consuming industry will suffer," he warned.

On the impact on Indian steel, Muthuraman said, "We are far more competitive than the US steel industry and ours is a growing market unlike the EU and Japan, so this will not make much of a difference."

What corroborates the view of Muthuraman is growing exports. Export of finished steel and semis during April 2001-January 2002 have been estimated at 2.525 million tonne, an increase of 4.85 per cent compared to corresponding period last year.

Steel Authority of India Ltd chairman Arvind Pande said, "Exports of steel from India will no doubt be a casualty. More importantly, we will have to take a suitable action to prevent the surplus steel floating in the world from reaching our own shores. In terms of WTO provisions, Indian steel was hoping to be excluded from this action taken by the US, on grounds of developing nation status which has not happened despite bringing this to their notice."

Raman Madhok, deputy managing director Jindal Iron and Steel Company, one of the major exports of galvanised steel, also said the impact would be minimal.

"We have exported 10,000 tonne of galvanised products even this month and buyers have factored in a tariff of 20-25 per cent. What remains to be seen is what they do with the balance 10 per cent, but, we are hopeful that it will not have too much of an impact," he said.

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