Download Locations

• Open CRS (User submitted)

Summary

The U.S. steel industry has faced increasing difficulties since the late 1990s. More than 30 U.S. steel producers have gone into bankruptcy. While different companies and parts of the industry have been affected to different degrees, the two types of domestic producers of raw steel, integrated mills and minimills, have both supported restrictions on imports, which they say have undermined the ability of the U.S. industry to produce steel economically. U.S. policymakers have responded with a variety of measures, but could not prevent a new downturn in the domestic industry in late 2000 and 2001. Active and retired steelworkers and their union representatives have also become particularly concerned about the industry’s possible inability to continue to fund pension and healthcare benefit commitments (an issue known as “legacy costs�). Already, more than 100,000 retired steelworkers have lost health care benefits, which were funded by steel companies that have been liquidated. Supporters of government assistance for legacy cost relief introduced legislation, and the 2002 trade bill, approved by Congress and President Bush (P.L. 107-210), assists retirees not eligible for Medicare, who have lost their health care benefits because of corporate bankruptcies. Pensions are guaranteed up to statutory limits by the Pension Benefit Guarantee Corporation, which acted in 2002 to take over the plans of three of the largest integrated steel producers. Pressed to act by Members of Congress, steel companies, and labor representatives, President Bush in June 2001 requested the U.S. International Trade Commission (ITC) to undertake a new Section 201 trade investigation on the steel industry. The ITC ruled that much of the industry was being injured by increased imports and recommended relief measures to President Bush. On March 5, 2002, the President decided to impose three-year safeguard tariffs with top rates of 30%. The safeguard tariffs were only one element of an Administration strategy concerning steel, which also included a multilateral international negotiations on global overcapacity in the steel industry and future rules for world steel trade. Meanwhile, U.S. trading partners are challenging the Section 201 measures under rules of the World Trade Organization, a subject covered in CRS Report RL31474, Steel and the WTO. Some Members of Congress, economists and representatives of steel-consuming industries have expressed concerns that measures to aid the industry are having a negative impact on the competitiveness of a broad range of U.S. businesses. Supporters of this view have introduced H.Con.Res. 23 in the 108th Congress calling on the ITC to give consideration to the impact on U.S. steel-consuming industries in the review of the effects of President Bush’s safeguard measures. This report reviews industry developments and the economic situation of the steel industry, including legacy cost aspects of its problems. It will be updated as events warrant.

Related Legislation:
• S.23

Related Reports:
• RL31748

XML