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Reaction to Steel Tariffs in Cleveland

Thursday, December 4, 2003 at 1:00 PM

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President George W. Bush has just made the decision to lift tariffs on steel imports. The tariffs were imposed in the spring of 2001, much to the relief of steel interests here in Ohio. The move is credited with helping International Steel Group put the former LTV steel plant in Cleveland back into production, and propping up the steel industry as a whole. But just as opinions vary nationwide on the tariffs, so do they here in Northeast Ohio as well. ideastream's Bill Rice reports.

Those who cheered the loudest as President Bush imposed the tariffs are groaning just as loudly today. It’s widely expected the president will decide to lift the tariffs, which were imposed to ease competition from foreign steel companies. That’s bad news to John Ryan, head of the Cleveland AFL-CIO, who’s worked closely with the steel-workers union to preserve jobs.

John Ryan: We’ll see the cost of steel go down some, and we’re going to see companies that have had a hard time continue to have a hard time. We’re going to see more layoffs and we’re going to see companies that are affected by the steel mills also affected.

In other words, steel-makers and some of the companies that supply them will not fare well. And, Ryan says, we’ll see more steel dumping - foreign companies selling steel in the U.S. at below cost or below the price it would fetch in its home market.

Labor leaders are worried about jobs; steel companies fear for their bottom lines. John Willoughby is spokesman for Republic Engineered Products in Akron, which manufactures specialty steel bars. He says his company is already squeezed by rising production costs, and lifting the tariffs could make it worse.

John Willoughby: We could be faced with the inability to cover our costs and that could further deteriorate our ability to get a return on our investment.

The timing for REP owners is especially precarious, Willoughby says, since the company is up for sale. Company official fear a change in steel policy could make REP a less attractive investment.

Ohio Congressman Dennis Kucinich, who was very vocal two years ago in convincing Mr. Bush the tariffs were a good idea, also wants them left in place. Equally outspoken today - especially since he’s running for president - Kucinich says he sees more trouble for the industry.

Dennis Kucinich: I’m concerned about the jobs at ISG-Cleveland.

ISG is International Steel Group which bought its Cleveland Works plant from bankrupt LTV in 2001. Kucinich, a democrat, was a key player in the effort to find a buyer that would keep the plant operating rather than selling off assets piecemeal.

Dennis Kucinich: We fought long and hard to save that steel mill. There are over 1,000 families who have to be very concerned about the impact of this decision on the tariffs.

Like the AFL-CIO’s John Ryan, Kucinich also fears a rise in foreign steel dumping in the U.S. But some disagree with the idea that the steel tariffs and the dumping are connected. Peter Gerhart is an international law Professor at Case Western Reserve University.

Peter Gerhart: The understanding is that the prices of the steel are fair, not unfair. The problem the president saw was that they were simply coming in too quickly and injuring the United States industry.

And when that happens, current trade agreements allow the president to impose tariffs. The trouble is, Gerhart says, the World Trade Organization ruled that it didn’t happen.

Peter Gerhart: This is not a case of steel dumping, it’s simply a case where the United States claimed the right to slow down the increase in imports that were fairly priced. And the WTO found that they did not meet the circumstances under which that could be done.

Gerhart says while steel-makers are generally in favor of keeping the steel tariffs, broader manufacturing interests tend to side with removing them. One example is the Precision Metal-Forming Association - a national organization based in Independence. President Bill Gaskin says lower steel prices would benefit Ohio manufacturers.

Bill Gaskin: PMA members have had several months now of growth, modest growth, but none the less growth in the beginning of a recovery. So ending the steel tariffs would help bring that along, manufacturing generally in the US needs a boost and this sort of active policy by the government to favor manufacturing would be a real plus.

And when it comes to saving jobs, Gaskin says, the steel mills aren’t the only places where jobs are at stake.

Bill Gaskin: There are 57 steel consuming jobs for every 1 steel producing job on average in the United States. Even in states like Ohio where steel is an important part of our economy we still have 20 to one, there are 20 more steel consuming jobs for every one steel producing job in Ohio.

Many of those jobs, he says, are with small manufacturers on tight budgets that need every break they can get.

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