US Tariffs on Steel Imports Irk Italians

THE decision by the outgoing Bush administration to impose tariffs on some European steel imports worries Italian industrialists. They do not want to see the action become a trend. But the move is not expected to be a particularly severe blow for the country.

Italy has the distinction of receiving the highest of all the tariffs - 58.79 percent, imposed on Ilva, the state-owned steelmaker. Ilva exports 250,000 tons of steel a year to the United States, but only 50,000 tons of that will be affected by the tariffs; its main product, steel coils, is exempt.

Italy's other steelmaker, the private company Falck, will have to pay a relatively modest tariff of 2.2 percent on its exports to the US. Nor is Falck's presence in America very large. A mere 1,500 tons a year of rolled sheets and hot-rolled plates are shipped to the US each year.

Still, Falck spokesman Ferrante Benvenuti decries the US decision as "protectionist."

"It's dangerous," he says in a telephone interview from Milan. "We have a problem if this becomes an American policy in relation to imports."

The reason for the tariffs, the Italians say, is that US companies tend to be older and therefore less cost-effective than those in Europe.

"Generally those companies that requested them aren't the ones that are the most modern," Mr. Benvenuti points out.

The European steel industry, however, has problems of its own now. The imposition of tariffs comes on the eve of a restructuring in the industry that hits Italy particularly hard. About 50,000 jobs are to be cut to reduce European steelmaking capacity, one-fifth of them in Italy.

In addition, the tariffs come as Italy faces a period of economic uncertainty. Consumer confidence is low, despite government efforts to reform the economy. Among other measures, Prime Minister Giuliano Amato has proposed privatizing banks owned by IRI, the state industrial holding company to which Ilva belongs.

"We find ourselves in perhaps the most difficult situation of the postwar period," said a report this fall by Italy's metalworking union Federmeccanica.

"With respect to economic prospects in the coming months," the report said, "the general picture remains troubling: the domestic market will certainly suffer from the expected drop in families' disposable income and from the [government's] restrictive monetary policy, while the evolution of the international market is hardly more encouraging."