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Standing Up for Steel
June 8, 2001

When furnaces were churning at full capacity, Weirton Steel, the country's eighth largest mill, employed 14,000 West Virginians. After the latest round of layoffs last week, the workforce thinned to under 3,500. Ravaged by subsidized imports and lax enforcement of anti-dumping laws, the mill is fighting the fast-fade, and Weirton is sinking with it. This company town tucked in the northern panhandle has known no other life, and while faded signs in the store windows of a sagging downtown beseech America to "Stand Up For Steel," they received no relief. Until now.

This week, invoking Section 201 of the 1974 Fair Trade Act, President Bush directed the U.S. International Trade Commission to launch "a full investigation of the industry, the imports coming into the United States, to make sure that our industry in not being affected by unfair trade practices." He also asked Treasury Secretary Paul O'Neill and Commerce Secretary Don Evans to begin drawing up new rules for steel trading. If the ITC finds that the industry is imperiled, it could recommend tariffs or import quotas. The final decision belongs to President Bush.

As he weighs the obvious evidence, the President, a self-styled free trader, will come under fire from domestic steel buyers determined to keep prices depressed and international trade partners resistant to import controls. But the facts of the case demand a verdict in fair trade's favor.

If Weirton Steel produced an inferior product through inefficient processes, its failure might be attributed on market forces. Not so. Beginning in the late 80s, Weirton invested $1 billion to become one of the nation's most modern mills, only to find that its competition was not coming from other American companies. While employ-owned Weirton was investing in the newest production technologies, the Asian currency crisis sent overseas economies tumbling like dominoes. Desperate for cash, they began dumping subsidized steel well below our cost of production. As a result, in the last three years alone, U.S. steel imports have risen to 38 million tons - 10 million tons more than the average for the four years preceding. Domestic prices have hit 20-year lows, 20,000 steelworkers have lost their jobs, and 18 American mills have filed for bankruptcy since 1997.

The ITC has 120 days to render a decision and 60 more to suggest a remedy. Mr. Bush then has 60 days to take action. Washington wags speculate that this uncharacteristic move on his part is no Emmaus Road conversion to economic nationalism but a political calculation to woo congressional fast-track opponents who don't trust him to protect domestic markets. Either way, a decision to defend this vital American industry will be a win for fair traders. Until then, Weirton waits.

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