Congress To Seek Impact Analysis Of Steel Import Tariff On Domestic Industry; Parts Suppliers Applaud Congressional Action.

The U.S. auto parts industry, reeling from the effects of higher steel costs as a result of higher import tariffs imposed by the Bush administration, have found sympathy in the U.S. Congress. Rep. Joe Knollenberg (R-Mich.) and 51 co-sponsors of a bipartisan House of Representatives resolution introduced House Concurrent Resolution 23 that urges President Bush to request that the International Trade Commission (ITC) include an analysis of the impact of the Section 201 steel tariffs on steel consumers in the United States in its midterm review of the safeguard program.

"We praise Rep. Knollenberg and his co-sponsors for showing strong and decisive leadership at a critical time for steel-consuming industries in the United States," said Christopher M. Bates, president and CEO of the Motor & Equipment Manufacturers Association (MEMA). "The steel 201 program hit the automotive products industry at a very bad time. We are in the middle of a cost-price squeeze -- that is, rising costs and no pricing power. Thanks to the actions of Rep. Knollenberg and his colleagues, suppliers may not have to make some very tough and painful decisions regarding employees and facilities."

Automotive suppliers said that the Bush administration's protective tariffs on foreign steel have driven up their costs, forcing them to cut jobs and consider importing steel and other materials. The companies, who are some of the largest purchasers of U.S. steel, said they may import more steel from countries that are exempt from the tariffs, such as Brazil, Argentina and Turkey. They may also import parts that use steel, they said.

While the ITC is required to examine the effects of the steel tariffs on the domestic steel industry in its mid-point review, due to the president by Sept. 20, 2003, it is currently under no obligation to consider the impact of the tariffs on steel consumers including the automotive supplier industry, according to MEMA.