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Brand Protection/Anti-Counterfeiting Card Check and the Employee Free Choice Act Commercial Vehicle Safety Technology Global Environmental Regulations International Trade Negotiations Research and Development (R&D) Tax Credit Stopping Distance for Heavy Duty Trucks
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supplier issues Trade Law and Steel Costs Description: According to the Center for Automotive Research, the automotive industry accounts for 41 percent of domestic steel consumption, and for that reason, steel remains one of the leading raw material cost challenges facing the motor vehicle suppliers. Many factors affect the cost of steel. Long-standing anti-dumping and countervailing duty tariffs (AD/CVD) and Department of Commerce (DOC) regulations used to determine such tariffs have over time limited supply and raised prices. Affected segments of the automotive supplier industry working in coalition with other steel-consuming industries are calling on Congress and the Administration to re-examine U.S. anti-dumping and countervailing duty law and regulation to ensure duties are not inflated and to achieve a better balance of interests between the domestic steel industry and downstream domestic steel-using industries. Status: In the U.S., the domestic steel manufacturing industry continues to benefit from high levels of protection. There are over 130 different import restrictions on imports of steel products which harm steel consuming industries, such as auto suppliers, in tight markets. The DOC and the International Trade Commission (ITC) consider antidumping and countervailing duty cases to prevent foreign predatory pricing and subsidized competition. However, without a full analysis, the DOC and ITC cannot determine if those trade remedies are actually dampening legitimate competition and causing unintended damage to the U.S. manufacturers (industrial users) who rely on those products as inputs. In February 2007 Rep. Joe Knollenberg (R-Mich.) introduced H.R. 1127, the American Manufacturing Competitiveness Act. This legislation requires that “industrial consumers” of products subject to AD/CVD duties be granted “interested party” status in trade cases. The bill requires the ITC and DOC to allow full participation by industrial users when making an initial injury determination, when conducting a changed circumstances review and when conducting a 5-year sunset review. The bill also requires that the ITC consider the economic impact of a decision when considering import restrictions. In order for a restriction to be imposed, the test must show it would provide greater overall economic benefit than harm. Impact on Industry: In the current market, many motor vehicle parts suppliers are unable to pass increases in steel costs on to their customers and yet are forced to accept the cost increases from their steel producers and service centers. Protection of the U.S. steel industry through trade law is compounding the overall “cost-price squeeze” on the supplier industry, leading to job losses and plant closings among suppliers and other steel consuming industries. 2008 Anticipated Action: MEMA will continue to work independently and with the Steel Task Force to support H.R. 1127. Also, MEMA will represent the views of the industry before the ITC on cases affecting suppliers. MEMA Staff Contact: Ann Wilson
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