Steel

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The Bush administration's decision to impose tariffs of up to 30 per cent on steel is not only designed to save the US steel industry from imports, ostensibly for a three-year period, but also to accentuate its consolidation with massive subsidies and tax write-offs. Whether these measures will achieve their goals is open to question.

Countries across the world are resorting to dumping of steel, reflecting the malaise gripping the industry. This has resulted in a spate of anti-dumping investigations and imposition of dumping duties. India is not an exception to this phenomenon. While the country has set up investigations into allegations of dumping, especially by the CIS nations, Indian steel itself is the subject of probes and dumping duties by several countries. Here we discuss one such investigation conducted by India.

Indian steel has been virtually shut out of the US following the notification by the latter of final anti-dumping duties on imports from India, along with eight other countries. The levies, to apply for five years on US imports of hot-rolled coils, range from 29.35 per cent on Essar Steel to 43.04 per cent on Ispat. Tata Steel, Steel Authority of India and Jindal Vijayanagar Steel have been slapped with a weighted average duty of 33.17 per cent. The levies also include countervailing duties, ostensibly to counter the subsidies received by Indian steel exporters from the government. Hot-rolled steel exports to the US, India’s largest export market, earned Rs 900 crore in 2000. The Indian industry has called the US commerce department’s move protectionist. Huge imports from more efficient producing countries in recent years have pushed several US steel mills into bankruptcy and layoffs. The patriotic fervour to protect the US industry appears to have gained ground after the September 11 terrorist attacks. The US administration appears to have moved rather quickly to defend the interests of its high-cost steel producers.