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Automobile industry

Trade Regulators Revive US Auto Industry with Steel Tariff Revocation

Strategic Insights

— 1 min read

Trade regulators have taken a decisive step towards reviving the US auto industry by revoking most of the 13-year-old tariffs and duties against high-grade steel imports. The International Trade Commission's vote covers all tariffs and subsidy-countering duties against carbon steel plate from 16 countries, providing a significant relief to US and Japanese automakers. The move is expected to save the industry billions of dollars in costs and benefits several major auto manufacturers, including DaimlerChrysler AG, Ford Motor Co., and Toyota Motor Corp.

Key Takeaways:

  • The International Trade Commission revoked most of the 13-year-old tariffs and duties against high-grade steel imports, benefiting US and Japanese automakers.
  • The decision covers all tariffs and subsidy-countering duties against carbon steel plate from 16 countries, including Canada, France, Australia, and Japan.
  • Only steel from Germany and Korea will continue to face the duties, first imposed in 1993.
  • The tariffs were estimated to have cost the industry $3 billion since 2004 due to artificially high steel prices.
  • The price of corrosion-resistant steel has risen from less than $400 a ton in 2001 to over $700, significantly impacting the manufacturing costs.
  • The decision is a victory for auto makers, including DaimlerChrysler AG, Ford Motor Co., General Motors Corp., Honda Motor Co., Nissan Motor Co., and Toyota Motor Corp., which joined forces in the trade case.
  • The ruling may be appealed to the US Court of International Trade in New York.

Statistics:

  • The price of corrosion-resistant steel has risen from less than $400 a ton in 2001 to over $700.
  • The industry is estimated to have paid $3 billion in additional costs since 2004 due to artificially high steel prices.
  • Between 1997 and 2004, 45 steel manufacturers, about 40% of those operating in the United States, went bankrupt.
  • Over 85,000 jobs were lost from western Pennsylvania through West Virginia, Ohio, Michigan, Indiana, and Illinois during this period.

Sources:

  • Associated Press: WASHINGTON -- Trade regulators on Thursday revoked most of the 13-year-old tariffs and duties against imports of a high-grade steel used in cars, giving U.S. and Japanese automakers a holiday surprise.
  • Union Source: "Today's vote turns back the clock on America's steelworkers and once more puts us at the mercy of foreign producers who routinely have taken advantage of our open market to dump their unfairly traded steel," said Tom Conway, the Steelworkers International vice president.

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