For Immediate Release
Office of the Press Secretary
December 4, 2003
Fact Sheet: the Presidential Determination on Steel
December 4, 2003
Fact Sheet: The Presidential Determination on Steel
Presidential Action Regarding Steel Safeguard Measures
Today, President Bush announced his decision to terminate the
temporary safeguard measures on steel that he put in place in
March 2002.
o Prior to the time President Bush imposed temporary safeguard
measures, steel prices were at 20-year lows, and the
U.S. International Trade Commission (ITC) found that a surge in
imports to the U.S. market was causing serious injury
to our domestic steel industry.
o Since then, steel prices have stabilized, imports are at
their lowest level in years, and U.S. steel exports are at
record levels.
The President's determination was based on significant
improvements in the U.S. steel industry and other
changed circumstances since last year, including:
o Industry consolidation and restructuring that have reduced
production costs and increased productivity;
o New labor agreements that increase flexibility, boost
productivity, protect retiree welfare, and empower steel
workers; and
o An improving economy that will create new opportunities for
America's steel industry.
President Bush is committed to America's steel workers and to the
health of our steel industry -- and will continue to pursue
policies that will help this vital sector of our economy.
o Steel import licensing, established when the safeguard
measures were imposed, will continue to provide WTO-consistent
data collection and monitoring of steel imports. This will enable the
Administration to quickly respond to future import
surges that could unfairly damage the industry.
o The Administration will continue to vigorously enforce our
trade laws.
o Through international negotiations, the Administration will
continue to work to reduce steel subsidies by foreign
governments.
President Bush believes that America's workers can compete with
anyone in the world -- as long as the playing field is fair
and level. Enforcing our trade laws is an important part of the
President's commitment to free trade.
Background: Providing Opportunity to Regain Competitiveness and
Relief for Steelworkers
On June 5, 2001, President Bush announced his three-part steel
initiative including: (1) launching negotiations to establish
disciplines on government subsidies and other market distortions in the
steel sector; (2) working to reduce inefficient excess capacity
in the global steel market; and (3) requesting initiation of a Section
201
("safeguard") investigation to determine whether imports are
seriously injuring the domestic industry.
In March 2002 -- after a comprehensive investigation, the ITC
found a surge of imports was causing serious injury to
the domestic steel industry -- the President imposed temporary
safeguard measures on ten categories of steel products under the
authority of Section 201 of the Trade Act of 1974. The safeguard
measures took the form of tariffs ranging from 8 to 30 percent on ten
categories of steel products, as well as a tariff-rate quota on
one product. As he stated at the time, the President took
this action to "help give America's steel industry and its
workers the chance to adapt to the large influx of foreign steel."
Since applying the temporary safeguard measures, the
Administration has monitored conditions in the steel
sector. As part of the Section 201 process, the ITC conducted a
mid-term review of the safeguard measures and in September
provided a report to the President and the Congress. Since then, the
President and Administration officials have:
o Taken into account the ITC mid-term report, which examined
the safeguard measures' effects on manufacturers
of the ten products subject to the safeguards; and
o Sought the advice of the Secretary of Commerce and the
Secretary of Labor
In light of changed circumstances since March 2002, the President
concluded that the safeguard measures have accomplished
their goal, and that continuing these measures was no longer
warranted. These changed circumstances included:
o Industry consolidation and restructuring that has increased
U.S. productivity and lowered production costs.
Many domestic steel producers have cut inefficient capacity, have
strengthened overall operations, and are now more
competitive. The three largest steelmakers invested $3 billion to
consolidate the flat-rolled sector. More than half of U.S.
raw steelmaking capacity is now owned by firms that merged or
restructured since the safeguard was implemented.
Restructuring has allowed steelmakers to reduce the high retiree
pension and health care costs that impaired their
competitiveness. Since 2000, the Pension Benefit Guarantee Corporation
(PBGC) has assumed the pension plans of 14 companies with total
liabilities of nearly $8.2 billion. Retirees from bankrupt steel
companies
will receive on average over 90 percent of the pensions they had
earned.
o Labor agreements that have allowed greater flexibility. The
United Steelworkers of America and several major
steelmakers negotiated innovative labor agreements that increase
flexibility, boost productivity, protect retiree
welfare, and empower workers. Major domestic steel producers also
streamlined their
management structure.
o An improving economic outlook that creates new opportunities
for U.S. steel. As a result of the President's
jobs and growth plan, U.S. economic growth in the third quarter was the
fastest in almost twenty years. Conditions are also
brightening abroad. A strengthening economy will further stimulate
demand, and the U.S. steel industry and its workers are now in a
position to benefit.
The President's Commitment to Maintaining a Strong Steel Industry
The President strongly believes America's workers can compete with
anyone in the world as long as we have a fair and level playing
field. The President will:
o Continue to promote a level playing field for American steel
producers and workers by:
Maintaining steel import licensing to collect data on steel
imports and provide for early warning of any harmful
import surges; and
Enforcing our trade laws vigorously.
o Redoubling our efforts to advance OECD negotiations aimed at
establishing new disciplines on steel subsidies, and
efforts to encourage reduction of excess inefficient steel capacity
globally.
o Continuing to pursue policies that strengthen economic growth
and job creation.
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