U.S. slaps import duties on steel, Canada escapes penalites

The United States is slapping duties of up to 30 per cent on some imported steel, a move that a key labour union in Canada warned could hurt the steel industry here.

U.S. Trade Representative Robert Zoellick said the duties, which will range from eight to 30 per cent, will be imposed on cheap steel imported into the United States from Brazil, South Korea, Japan, Russia, Germany, Turkey, France, China, Australia and the Netherlands.

The duties, which cover flat-rolled steel and other products, will go into effect on March 20.

Canada and Mexico, partners in the North American Free Trade Agreement with the U.S., are exempt from the tariffs. Imports from developing countries were also excluded from the duties.

American steel companies and labour unions had been asking President George W. Bush for a four-year, 40-per-cent duty on a wide range of products. They said the levy was need to protect their industry and jobs.

The U.S. steel industry has faced hard times lately 31 firms have filed for bankruptcy protection in the past four years.

"The President is committed to using U.S. laws and international trade rules to the fullest extent possible to help American industries under stress to make sure that they have the opportunity to restructure and compete," Zoellick said during a press conference in Washington.

"This safeguard remedy gives the U.S. steel industry some temporary relief from years of import surges and unfair trading practices that have hurt its ability to compete and to prosper," Zoellick added.

Meanwhile, Lawrence McBrearty, Canadian national director of the United Steelworkers union warned some of the cheap steel originally destined for the U.S. could wind up in Canada.

"The Bush announcement brings a sense of urgency to our need to prevent serious damage as an indirect consequence of the decisive action taken by the Americans," McBrearty said in a release.

McBreaty wants the Canadian government to slap on retroactive duties as an anti-dumping safeguard.

"If the government fails to act, whose interests is it serving? Not working Canadians in cities like Hamilton, Montreal, Contrecoeur, Regina, Sault Ste. Marie, Edmonton and others at risk, not to mention the impact on iron ore communities like Labrador and Quebec's North Shore," McBrearty said.

In a letter to International Trade Minister Pierre Pettigrew, Ontario trade minister Robert Runciman said the province's steel industry faces a serious threat from low-priced imports.

"Ontario's steel industry provides some 23,000 jobs directly, and tens of thousands more in related manufacturing industries such as the automotive sector. We cannot afford to put these jobs in jeopardy," Runciman wrote.

Canada's steel producers, including Dofasco and Stelco, cited the dumping of cheap imported steel in the domestic market as one of the main reasons their earnings tumbled last year.

The U.S. government's action on steel could also set the stage for a nasty trade dispute with the European Union and some of its trading partners. Even before the duties were formally announced, the EU had vowed to retaliate.