ECORSE, Mich. — As clouds of puffy white smoke billow from National Steel Corp.'s towering blast furnaces, 20-ton steel coils are unloaded from a nearby tanker docked along the Detroit River.
The arriving steel is from Russia. It has been coming for months and is piled haphazardly like hay bales in a mown field a few feet from National's property line, awaiting a buyer.
Turned rust red from exposure to the elements, the Russian steel, and a similar influx from Brazil and Japan, are fresh fodder for the lately dormant protectionist sentiment of America's industrial heartland, which has felt the sting of foreign competition before.
Now, thanks to the crisis in Asia, U.S. steelmakers and workers say their future is imperiled again by a wave of foreign steel that has sent U.S. prices, production and profits tumbling, and layoffs rising. One small U.S. steelmaker has gone bankrupt already.
On Friday, the U.S. International Trade Commission agreed. The panel unanimously made a preliminary finding that U.S. steelmakers are being injured by imports. The vote triggers a formal investigation by the Commerce Department into whether steel is being dumped here--sold for less than it costs to make.
That is the charge leveled by the nation's top integrated steel companies, mini-mills and the United Steelworkers of America, which on Sept. 30 complained that the three nations were dumping hot-rolled steel, a basic product used for structural applications or further processed into higher grades.
"This industry is being devastated," declared Paul Wilhelm, president of USX Corp.'s U.S. Steel Group, the nation's top steelmaker. He said Friday that the ITC ruling "validates the industry's complaints."
Steelmakers Seen as Crybabies
If this sounds familiar, it should. Trade disputes involving steel are nothing new. A third of all the dumping cases filed since 1980 involved steel. So quick are U.S. steelmakers to complain about unfair trade that they have long been regarded as crybabies.
"When it finds itself in difficulty, the U.S. steel industry always looks for a scapegoat," said Christopher Stokes, a trade lawyer representing Brazilian companies.
But that reputation dates to the 1980s, when U.S. steel firms were the Rust Belt poster children for inefficiency and uncompetitiveness. Cheaper, high-quality steel from abroad captured a big chunk of the market.
Today's U.S. steel industry, having undergone a deep and painful retrenchment that eliminated a quarter of a million jobs, is arguably the most competitive in the world.
Yet analysts say productivity and efficiency only go so far when confronted with the tactics that some nations, crippled by the trouble in Asia that has dried up demand for steel in much of the world, are employing today.
"The Russians are so desperate that they don't care about price," said Kenneth Hoffman, analyst for Prudential Securities. "They are just interested in getting hard currency."
Friday's preliminary finding by the ITC could lead to a ruling as early as February on the dumping charges. That could result in retroactive duties of nearly 200% on the imported steel. Meanwhile, additional cases against steel products from other countries, most notably South Korea, are expected.
Despite the dramatic numbers for hot-rolled steel--a tripling of tonnage from Japan, Russia and Brazil and a price plunge of nearly 20% since last winter--analysts say the claims of dumping might be difficult to prove.
One complicating factor is the huge currency devaluations in the exporting countries. Currency values have plummeted by half or more in Asia and Russia, which makes their exports dramatically cheaper in dollars.
And foreign steel producers say the current glut is related to surpluses caused by the two-month strike against General Motors Corp. and a slump in the oil industry that caused an unexpected buildup of steel pipe and tubing inventory.
"Imports aren't causing any injury, and if there is any, it is transitory," said William Barringer, a Washington-based trade attorney representing Japanese and Brazilian steelmakers.
Says Greg Mastel, vice president of the Economic Strategy Institute, a think-tank that supports anti-dumping laws: "It is a close call."
The initial dumping cases are being watched closely because they raise the specter that the Asian economic calamity is giving rise to increased protectionism around the globe, a danger from the beginning of the crisis more than a year ago.
In the U.S., there are growing concerns that steel is the leading edge of an import tide that will soon swamp other industries, including textiles, machine tools, computer chips and auto parts.
But the foreign steel producers note that U.S. consumers could pay higher prices for everything from autos to refrigerators if the dumping charges are upheld. Some U.S. manufacturers, such as GM, have filed briefs opposing the unfair trade actions.
