Trade commission finds imports key to US steel woes

The International Trade Commission tossed a political hot potato to the White House by deciding in a 3-to-2 vote June 12 that imports are a key cause of serious harm to certain segments of the domestic steel industry.

ITC chairman Alfred Eckes said that of $6.2 billion worth of steel imports in 1983, almost 70 percent were covered by the independent agency's finding. Five out of nine broad product categories - including ingots, plates, and sheets - were found to be seriously damaged by imports. In four other categories, including pipes, bars, and railway products, imports were not found to have increased enough to be a substantial cause of injury or the threat of injury.

By July 13 the ITC is expected to decide on what form of relief it will recommend to the President. Bethlehem Steel Corporation and the United Steelworkers of America, which brought the case to the ITC, asked the fact-finding agency to recommend that a quota be imposed to limit steel imports to 15 percent of the US market for five years. The relief could take the form of quotas, tariffs, or a combination of the two, ITC chairman Eckes says.

The proposed remedy will then be sent to the White House. And by Sept. 24, in the heat of his reelection campaign, President Reagan must implement or reject the ITC's recommendations. If he does not follow the ITC plan, Congress can direct him to do so.

The Reagan administration is on record as opposing global quotas to help the steel industry. Instead, it favors having the industry seek relief from the ITC on a country-by-country basis.

In opposing quotas, the administration cites both the cost to consumers and the threat of retaliation. By one estimate, an across-the-board limit on steel imports such as the industry is seeking from the ITC could add $768 million to the price paid for consumer durable goods such as appliances and cars. Bethlehem Steel chairman Donald Trautlein admits that there could be an initial hike in steel prices of $50 a ton (about 10 percent) if the industry gets the relief it seeks.

And a backlash from foreign steel producers who buy large amounts of US-made goods could affect some $6 billion worth of US products and the employees who manufacture them, administration officials have told Congress.

But even in its current, diminished state, steel is an especially important industry in an election year. In 1983, the industry employed 243,000 workers and paid out $7.4 billion in wages and salaries. And it plays a major role in the economic life of states like Indiana and Pennsylvania - states with large numbers of electoral votes.

That political clout is being used to push legislation in Congress which would slap a 15 percent quota on steel imports for five to eight years. Bethlehem Steel executive Trautlein said he hoped the ITC action ''will accelerate the process'' of getting the bill passed. But other industry officials said a rejection from ITC might have been more potent, since it could have encouraged support from legislators who feel action under current trade laws is preferable to a new steel quota bill.

The Fair Trade in Steel Act is given a better chance of passage in the House, where it has 195 cosponsors, than in the Republican-controlled Senate, where it has but 19 consponsors. No action on the bill is expected in either chamber before the July 4 congressional recess, industry officials said.

ITC chairman Eckes defended his agency's still-to-be-devised remedy for steel imports against charges that it will be protectionist. ''I don't regard (the section of the trade law under which the steel case was filed) as protectionist. It is protection of a temporary variety,'' he said. The protection is provided ''for a limited period of time,'' he noted. ''It could be three to five years.''

While US trading partners may be unhappy with any remedy the ITC devises, the relief recommended by the ITC is ''compatible with our international agreements, '' and sanctioned under the General Agreement on Tarriffs and Trade, Eckes said.

After reading the ITC staff's 700-page report on the industry, the five ITC commissioners were divided on whether or not steel imports were the major factor in harming the industry as the law requires before relief can be granted. Chairman Eckes, a Republican, said the ''facts are clear cut. Imports are increasing and have expanded their market share to nearly 26 percent in 1984. The steel industry generally is seriously injured.''

Commissoner Paula Stern, a Democrat, said that while the industry had suffered, ''imports were definitely not close to being the most important cause of injury.''

Last year the industry lost $3.56 billion. And according to Steelworkers' president Lynn Williams, 100,000 workers are now laid off, and another 100,000 have lost their recall rights.