WASHINGTON – Rep. Benjamin L. Cardin today joined members of the Steel Caucus in urging President Bush to set tariffs at the "maximum" level recommended by the International Trade Commission (ITC).

    Last week the ITC recommended a penalty of 20-40% tariffs on steel imports. The steel industry has called for tariffs in the 30-50% range to counteract the volume of foreign steel imports that have flooded the U.S. market since 1998.

    In October, the ITC ruled that the U.S. steel industry had been "seriously injured" in recent years by the flood of foreign steel imports. Bethlehem Steel Corp. filed for Chapter 11 bankruptcy protection in October, bring a total of 26 U.S. steel companies that have filed for bankruptcy since the beginning of the steel crisis. Last week, Bethlehem Steel and U.S. Steel announced they were in merger talks.

    "The U.S. steel industry has been crippled by the flood of illegally dumped foreign steel. The President needs to act immediately to provide a remedy that will enable the U.S. steel industry to compete with its foreign competitors," said Rep. Cardin.

    The President is not required to make his final decision on the ITC recommendations until mid-February, but the Congressman pointed out, "He needs to act quickly to provide relief for the U.S. industry. The situation is so serious that February may be too late."

    A copy of the letter to the President from the Steel Caucus follows:

Dear Mr. President:

    On October 22, 2001, the domestic steel industry received an overwhelmingly affirmative determination of injury from the United States International Trade Commission (ITC) under Section 201 of the Trade Act of 1974, as amended, due to a four-year surge of steel imports, which has left half the domestic steel industry in or approaching bankruptcy. You must now determine the 201 remedy needed to return the domestic industry to financial viability.

    It is critical to our steel industry's future prospects that they obtain an effective remedy. The only remedy that will accomplish this is the imposition of tariffs at the maximum level recommended, due to the severity of the damage to the industry. In addition, these remedies must have a duration of four years to allow the industry to rebuild its capital structure, which is now almost entirely destroyed.

    Even if tariffs are set at this maximum level, price increases to consumers would be limited due to the highly elastic supply of domestic steel products. The domestic industry, which has substantial capacity presently idled by surging import volumes, would simply supply much more of US demand. Industry relief would arise predominantly from the improvements in domestic capacity utilization. Applying the maximum tariff would not even return prices to the levels of three years ago, the period prior to the damage confirmed by the ITC.

    In addition, while, by statute, your final decision is not required until mid-February at the latest, we urge you to act in an expedited manner to provide essential relief to this industry. The domestic steel industry is in much worse condition today than it was in June when the Section 201 was initiated. Bethlehem Steel, the nation's second largest steelmaker, was forced into bankruptcy in October, thereby joining the very long list of insolvent U.S. producers. Just days ago, LTV Corp. sought permission from the bankruptcy court to cease operations and begin liquidation. Each day that goes by without relief will result in further, perhaps irreparable, harm to this vital industry, at the risk of thousands of jobs and of serious damage to countless communities across the nation.

    Therefore, we urge you to take quick, effective action upon your receipt of the Commission's remedy recommendation. Unnecessary delay will simply deepen the already devastating steel crisis and further stall the recovery of this essential industry.