Statement by Assistant to the President for Press Relations Fitzwater on Specialty Steel Import Relief

July 16, 1987

The President has decided to extend existing import relief for the specialty steel industry until September 30, 1989, when the remainder of his national steel program expires. This import relief will be in the form of declining tariffs for stainless steel sheet, strip, and plate, and quotas for stainless steel rod, bar, and alloy tool steel.

The widespread trade problems in the specialty steel industry stem from a variety of sources. Part of the difficulties arise from persistent global overproduction, some of it subsidized, as well as trade barriers and distortive practices used by our trading partners to protect their domestic industries and to stimulate exports. The President took these factors into consideration on July 5, 1983, when he made his original decision to grant import relief under section 201 of the Trade Act of 1974. These factors were a major consideration in today's decision, as well.

The President's decision to extend import relief to the specialty steel industry is part of his comprehensive approach to trade problems in steel. The objective of that program is to bring an end to constant trade disputes over steel by reversing global trends toward excess capacity, greater subsidization, and increasingly protected foreign markets. The relief announced today is in the form most consistent with the President's belief that government should interfere with the marketplace as little as possible and that when government action is necessary it should facilitate orderly adjustment in the industry.

The U.S. International Trade Commission (USITC) has found that the economic condition of companies producing stainless steel sheet, strip, and plate is stronger than other segments of the industry. Further, many of these imports are already covered by bilateral arrangements negotiated under the President's national steel program. Therefore, a modest tariff starting at 3 percent and declining to 1 percent of the value, will be imposed on importation of these products.

In recognition of the weaker competitive position of the stainless steel bar and wire rod and alloy tool steel sectors, the President has decided to maintain the existing quota program with continued increases in the quotas established in 1983. In addition, the President has again authorized the U.S. Trade Representative to allocate unilaterally these quantitative restrictions on a country-by-country basis or to negotiate or renegotiate bilateral arrangements with our trading partners in order to provide for such country allocations.

In order to facilitate the orderly transition between the original import relief and this extension, as well as to provide time for the expected negotiations, the President has decided to extend for 90 days, through October 19, 1987, the allocations provided during the final year of the existing import relief for stainless steel bar and wire rod and alloy tool steel.