WASHINGTON – Maryland lawmakers and steelworkers gave a lukewarm reception to President Bush’s Tuesday announcement that he would impose up to a 30 percent tariff on some imported steel.
Local groups, who said a 40 percent tariff was necessary to protect domestic steel producers, called Bush’s plan only a “first step” to recovery here.
“Bush has done what the law requires,” said Sen. Barbara Mikulski, D-Md., who added that there was a “clear finding of unfair trade by the International Trade Commission,” which recommended a tariff of 40 percent.
Mikulski said, “tariffs are a first step – an important and critical step — but not the only step to save American steel.”
Steelworkers claim that cheap foreign imports are largely responsible for driving 30 American steel companies into bankruptcy since 1997, causing 15 to shut down and wiping out more than 46,000 jobs.
Bush agreed that domestic steel producers need temporary protection from surplus foreign steel. He imposed tariffs up to 30 percent on specific steel products for three years, and urged domestic steelmakers to use that time to restructure to ensure their long-term competitiveness.
“The president heard all the arguments and in the end stood up for steel,” said Robert “Steve” Miller Jr., chairman and chief executive officer of Bethlehem Steel Corp., which employs 3,500 workers at its Sparrows Point division in Baltimore.
But Miller said the president must now address the pension and healthcare issue — “legacy costs” that will continue to drag on domestic steel producers no matter how efficient they become.
“Now that the trade issues have been addressed, we must turn our attention to provisions to help with legacy cost,” Miller said.
Rep. Benjamin Cardin, D-Baltimore, agreed.
In the 1980s and early 1990s, voluntary restraint agreements forced U.S. steelmakers to cut capacity. That led to an increase retired steelworkers whose pension and healthcare costs had to be picked up by U.S. steel manufacturers, Cardin said.
Many other nations assume the health care and pension costs of steelworkers, making it “difficult for the United States to compete on a level playing field,” he said.
Jim Strong, a spokesman with District 8 of the United Steelworkers of America, said Maryland has about 32,000 of the 600,000 retirees affected by legacy costs nationwide.
But not all agree that a tariff on steel imports is in the best interest of the United States or steel producers.
Jon Jenson, chairman of the Consuming Industries Trade Action Coalition said the tariff “has angered American manufacturers. Their interests have gotten lost in the frantic political effort to appease steel producers and their unions.”
The coalition claimed in a December study that a tariff as low as 20 percent would cost 74,502 jobs in steel-consuming industries, like agriculture, retail, banking, transportation and others, while saving only save 8,900 steel- industry jobs in exchange.
American Institute for International Steel President David Phelps said the tariff will hurt steel consumers and will not solve the problems of weak, mismanaged U.S. steel companies.
“This was the wrong decision at the wrong time,” Phelps said in a prepared statement, adding that the tariffs merely extend 30 years of corporate welfare that the domestic steel industry has demanded and received from the U.S. government.