A Trigger to Curb Dumping

If the price tag is too low, out come Treasury's hound dogs

For the past year or so the U.S. steel industry has resembled an aging boxing champ, once invincible but now hobbled by old bones and slow reflexes. The young contender has been imported steel, largely of Japanese origin, which in some months has seized a fifth of the domestic market. Late last fall the White House pledged to help salve the champ's wounds by toughening up U.S. sanctions against dumping--that is, selling foreign steel in the U.S. for less than it costs to make, or is sold for, in its home country. Last week the Administration announced details of its new "trigger price mechanism" plan, under which steel entering the U.S. with a price tag below a predetermined level would instantly unleash the investigative hound dogs of the Treasury Department.

In computing the trigger prices, the Government consulted with Japanese officials, whose nation's mills make the world's least expensive steel that is imported into the U.S. Last month an American team led by Robert Crandall, deputy director of the Council on Wage and Price Stability, holed up in Washington with a 20-member Japanese delegation, poring over data supplied by the visitors concerning cost of materials and labor, overhead, depreciation and the like. The conclusion: for 17 steel products that make up 75% of the market the average trigger price would be $330 per ton, or 5.7% less than the price for comparable U.S.-made products on the East Coast.

The triggers for other steel products will be announced by the time the new plan goes into effect Feb. 15. After that date, customs officials will report to the Treasury any imported steel costing less than the trigger price. The Treasury will automatically begin an investigation. In the past, the Government investigated charges of dumping only when they were brought by U.S. companies, and the process often took two years. Now remedies will come much more swiftly.

The plan was not greeted with hosannas. The Federal Trade Commission, in an unpublished study, charges that the trigger-price system will cost American consumers $1 billion, by raising the price of imported metal, and will require a huge bureaucracy to administer. American steelmakers are not sure that it will even actually curb imports. It will do so only if the trigger price is fairly close to the U.S. price--and at year's end several major American manufacturers announced price increases averaging 5.5%. Not until the second quarter will it become apparent whether trigger prices will actually curb imports. So far, the knowledge that a new mechanism was in the works has had scant effect on the influx of foreign steel. When the final tally for 1977 is in, imports could account for about 18% of the market, tying the record-high share they held in 1971.

Meanwhile, the domestic picture remains glum. Last week Chairman Edgar B. Speer of U.S. Steel said that his com pany would eventually have to close down its Youngstown, Ohio, operation, which currently employs 5,000 workers. It is clear that the Youngstown plants, with their ancient machinery, have also become geographically obsolete. Even if the Administration's trigger-price scheme succeeds, older plants like Youngstown's are unlikely to be salvageable.

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