Bush Likely To Defer Steel Levy

US president George W. Bush may defer his decision on imposing import duty under safeguard measures or Section 201 of the US Trade Law by another two months.

Steel ministry and industry sources said, President Bush, who was supposed to announce his decision by March 6, may defer it further by 60 days.

Steel Authority of India Ltd (SAIL) sources said, "Our lawyers have informed that the decision may be postponed."

The US International Trade Commission (USITC) has submitted its "injury decision" and remedy recommendation to the US president on December 19. The president usually has 75 days time to come to a decision on the issue.

Sources also felt that the bound rate of 40 per cent duty on 29 foreign made (including Indian) steel products may not be levied finally, in view of the changed political scenario.

Moreover, the consensus to cutback production capacity at the Organisation of Economic Co-operation and Development (OECD), is also likely to have an effect on the US decision. "The US may have to tone down its protectionist approach," said sources.

The president has sought more information on the issue from the USITC. In the meantime, an industry team led by the steel secretary N N Khanna had also visited US to meet the USITC and US department of commerce.

USITC had put forward alternative recommendations to the US president, one of them being, a smaller tariff with a small quota for one year and the other, quantitative restrictions. The president could opt for any of these recommendations or brush them aside and ask the USITC to relook into the matter.

USITC officials, who were in the country last month to visit the affected steel companies, also admitted that Indian exports to the US was not significant. Even at its peak, Indian exports accounted for less than one per cent of US steel imports.

However, total imports from developing countries exceeded nine per cent which attracts Section 201. India, along with Brazil and the former republics of the USSR fall into this category because combined imports from these countries were 10 per cent of the total US imports.

According to findings of the USITC, close to 80 per cent of the tonnage in the steel industry has been found to be "injured". The 29 products that are subject to scrutiny include steel slabs, hot-rolled sheets, cold-rolled sheets, hot-rolled bars among other related products.