Memorandum on Import Relief for the Specialty Steel Industry

July 5, 1983

Memorandum for the United States Trade Representative

Subject: Specialty Steel Import Relief Determination

Pursuant to Section 202(b)(1) of the Trade Act of 1974 (P.L. 93 - 618), I have determined the action I will take with respect to the report of the U.S. International Trade Commission (USITC), transmitted to me on May 6, concerning the results of its investigation, which was requested at my direction, on the merits of providing import relief to the specialty steel industry. I have determined that the granting of relief is consistent with our national economic interest and is necessitated by the pervasive nature of unfair trading practices in specialty steel.

I will, therefore, proclaim import relief but in a modified form and duration from that recommended by the USITC. I will impose relief for four years rather than three, as recommended by the USITC, to provide time for the industry to complete important investment projects, improve productivity, and regain profitability. I have decided to provide relief in a form consistent with my belief in minimal government interference in the marketplace, and which will facilitate the orderly adjustment of the industry while recognizing the substantial differences in the competitive conditions of the various segments of the industry.

For flat rolled products (55 percent of imports), I will proclaim four years of digressive tariffs. For stainless steel sheet and strip, (excluding razor blade strip and type 434 cladding grade stainless sheet), the tariffs will be increased by 10 percent ad valorem in the first year, declining to 8, 6 and 4 percent in subsequent years. For stainless steel plate, the tariff will be increased by 8 percent in the first year, declining to 6, 5 and 4 percent in subsequent years.

In recognition of the weaker competitive position of the stainless steel rod, bar and alloy tool steel sectors, I will proclaim 4 year global quotas that will expand at an annual rate of three percent. For rod, imports will be limited in the first year to 19,100 tons, increasing to 19,700 tons, 20,300 tons and 20,900 tons in subsequent years. For bar, imports will be limited to 27,000 tons the first year, increasing to 27,800 tons, 28,600 tons and 29,500 tons in subsequent years. For tool steel (excluding band saw steel and chipper knife), imports will be limited to 22,400 tons the first year, increasing to 23,100 tons, 23,800 tons and 24,500 tons. This global quota may be allocated on a country basis, or orderly marketing agreements may be negotiated with countries that request such negotiations.

I also direct you to undertake an annual review of the necessity for and effectiveness of import relief. Should conditions change or inadequate adjustment efforts be undertaken, you may, in consultation with the Trade Policy Committee, obtain USITC advice and propose changes in the terms of relief.

This determination shall be published in the Federal Register.

Ronald Reagan

[Filed with the Office of the Federal Register, 2:46 p.m., July 5,