WASHINGTON -- Some suppliers say they are seeking steel from producers in Turkey, Brazil and India because those countries are exempt from special tariffs on imported steel imposed by the Bush administration in early 2002.
"We will move more production and procurement offshore" if the tariffs continue beyond this September, says Jeffrey Stoner, vice president for worldwide procurement for ArvinMeritor Inc.
The underlying message: The tariffs inadvertently may be helping build more overseas competition for the domestic steel companies.
Stoner was one of a dozen high-ranking executives of automotive suppliers who testified last week to the International Trade Commission on how they are trying to cope with the detrimental effects on steel consumers of the tariffs.
The tariffs range from 8 percent to 30 percent on a variety of steel products, mostly from more heavily industrialized countries. They were imposed in March 2002 and are to last for three years, but they could be rolled back at the midpoint in September.
The tariffs were intended to give U.S. steel producers relief from import competition so they can restructure and make improvements in their operations. (See story, Page 29.)
But steel users, especially those in the automobile industry, have complained loudly that U.S. producers dramatically raised prices, cancelled contracts, restricted supplies and generally made their lives miserable - especially since automakers refuse to accept higher prices for supplier parts.
The domestic steel producers argue that the tariffs are working as intended and that the users have exaggerated the effects.
Amid this increasingly bitter war of words, the commission is conducting two studies. One, for which the hearings were held last week, is a fact-finding effort about how the tariffs have affected the competitiveness of steel consumers.
The other study, on the effectiveness of the tariffs, will be for the midpoint review. Both reports will go to the White House, which will decide whether to keep the tariffs or roll them back.
Tim Leuliette, CEO of Metaldyne Corp., and Ramzi Hermiz, vice president of Federal-Mogul Corp., also testified that they are buying steel or planning to buy steel from developing countries exempt from the tariffs.
Other supplier witnesses were Scott Meyer, CEO of Ken-Tool Inc. and chairman of the Motor & Equipment Manufacturers Association; Douglas Krzywicki, CFO of A.J. Rose Manufacturing Co.; Eric Sandford, director of steel purchasing for Delphi Corp.; Lawrence Denton, CEO of Dura Automotive Systems Inc.; Wes Smith, president of E&E Manufacturing Co.; Layne Gobrogge, vice president of Transpro Inc.; Robert Anderson, president of San Luis Rassini International Inc.; and Richard Clayton, president of Textron Fastening Systems Inc.