[Congressional Record Volume 149, Number 16 (Wednesday, January 29, 2003)]
[Extensions of Remarks]
[Pages E106-E107]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 INTRODUCTION OF RESOLUTION URGING REVIEW OF STEEL TARIFF CONSEQUENCES 
                          FOR STEEL CONSUMERS

                                 ______
                                 

                          HON. JOE KNOLLENBERG

                              of michigan

                    in the house of representatives

                      Wednesday, January 29, 2003

  Mr. KNOLLENBERG. Mr. Speaker, I rise today to introduce a resolution 
regarding the Steel Safeguard Program that was initiated on March 5, 
2002. This resolution asks for little, but could mean everything to 
steel-consuming manufacturers in this country.
  By introducing this resolution I, along with 51 of my colleagues, are 
merely asking that the President direct the International Trade 
Commission (ITC) to include in its mid-term review of the Steel 
Safeguard Program an assessment of the Program's impact on steel 
consumers. Currently the ITC is under no obligation to report on these 
effects. By affirmatively accepting our request, the President will 
have a complete picture of the economic effects of the Program when he 
considers in September of this year whether or not to extend the 
tariffs for another eighteen months.
  Last March, the Bush Administration imposed tariffs on imported 
steel, some as high as 30 percent, in an attempt to limit low-price 
imports in order to give our domestic steel industry time to reorganize 
and become more competitive. At that time, it was obvious that

[[Page E107]]

steel-consuming manufacturers were going to feel pain, but we didn't 
know how bad the pain would be. Nobody knew how bad it would be.
  Mr. Speaker, the pain is real and it is deep.
  Since last year, I have been hearing stories of skyrocketing steel 
prices, broken contracts, and supply disruptions. Now, we have layoffs. 
Now, we have companies buying more steel from foreign countries exempt 
from the tariffs. And, now, more and more manufacturers, both large and 
small, are being forced to move production overseas. And once those 
jobs go, they aren't coming back.
  Two days ago, I was joined by representatives from six automotive 
parts supply companies to discuss the effects of the tariffs. Let me 
give you just a taste of what these companies are doing to cope with 
the tariffs.
  Arvin-Meritor, which is based Troy, Michigan, in my district, bought 
one million tons of steel globally last year. They recently closed down 
a Tennessee plant that employed 317 people in part because of higher 
steel prices and are now exploring options for buying cheaper steel 
from non-U.S. suppliers who are exempt from the tariffs.
  Dura Automotive Systems, Inc., which is based in Rochester Hills, 
also in my district, cut 60 jobs after the tariffs were imposed and 
business was lost.
  Metaldyne, which is based in Plymouth, Michigan, is expecting to 
source 30-40 percent of its steel from abroad within the next few years 
because of rising prices and supply shortages. They currently buy 98 
percent of their steel domestically.
  Dana Corp., which is based in Toledo, Ohio, is considering not only 
buying more steel from abroad, but buying components and finished parts 
from abroad as well because they can be made cheaper in foreign plants 
that don't have to pay inflated prices for steel.
  All of these companies, and others throughout the steel consuming 
manufacturing industry, are forced to respond to this pain in order to 
remain globally competitive. Many of these companies will expand their 
purchases of finished steel products from overseas, because finished 
products are not covered by the tariffs. Sourcing parts from overseas 
causes more pain for companies up the manufacturing stream. Companies 
are being forced to make these decisions because of the steel tariffs.
  Let's be clear. Right now, the unintended consequences of the steel 
tariffs are killing American jobs in steel consuming companies. This 
clearly was not the intent of the Steel Safeguard Program. This is the 
collateral damage. But we can't ignore the fact that the tariffs are 
costing jobs.
  And I have to ask this question: what good will the tariffs have 
achieved if there are no customers left to buy steel from U.S. steel 
companies?
  I am not here to criticize the President. In fact, I don't think the 
President would've supported these tariffs if he could've seen in a 
crystal ball the full damage they're causing. These effects have come 
about more rapidly and more severely than anyone predicted.
  And let me emphasize that I fully support a healthy domestic steel 
industry. These are good American companies that employ good Americans.
  But companies in my district and across the country are hurting. They 
are good American companies that employ good Americans. They deserve 
the consideration along with the steel industry when the steel tariff 
regime is reviewed.
  This resolution is not anti-steel or pro-steel consumer. It is simply 
an attempt to ensure that when the President decides whether to extend 
the Steel Safeguard Program for another 18 months, he has all the 
information he needs to make the best choice for our nation's economy.
  This is a modest request. We are not asking that the tariffs be 
lifted immediately and we're not attempting to change trade law. I urge 
all my colleagues to cosponsor this moderate, bipartisan resolution to 
simply consider the impact the steel tariffs have had on steel 
consumers.

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