The Motor & Equipment Manufacturers Association (MEMA) in the United States strongly supports Federal Reserve [bank] chairman Alan Greenspan’s recent remarks concerning the detrimental effects of the Section 201 steel tariffs on US steel-consuming companies.
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In testimony before the Joint Economic Committee of Congress on May 21, Greenspan said, “We should, as quickly as we can, take those (steel) tariffs off and open the market to competitive forces.” He added that price increases and other market pressures caused by the tariffs have sparked employment losses among US steel consumers. Greenspan added that these obstacles are contributing to the loss of US production capacity, as greater numbers of manufacturers are being forced to move overseas.
“We support chairman Greenspan in his comments, which highlight the mounting competitive pressures and challenges that our members have been struggling with for more than a year,” said Ana Lopes, director of government relations for MEMA. “Under the present circumstances, foreign automotive parts and components suppliers have attained an enormous advantage over domestic producers – one which has already culminated in the loss of American jobs.”
After the steel tariffs were enacted in March 2002, automotive suppliers have experienced price increases of up to 50% as well as significant supply shortages.
“Our members have already instituted layoffs and plant shutdowns in an attempt to staunch the rising tide of financial and business losses associated with the tariffs,” Lopes said. “At stake are 2.2 million jobs in the United States.”
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By GlobalData
Greenspan’s comments come as the steel tariffs are under increasing scrutiny. On March 26, MEMA member companies and other steel-consuming manufacturers from various sectors testified before the House Ways & Means Trade Subcommittee concerning the critical business and employment repercussions of the tariff programme. The International Trade Commission (ITC) is currently conducting a 332 Investigation, requested by House Ways & Means Chairman Bill Thomas which will assess and study the impact of the tariffs on US steel-consuming industries across the country. The ITC is also conducting a mid-term review (Section 204) of the tariffs, which will solely assess their relationship to the domestic steel industry and its restructuring efforts. The ITC will subsequently merge the two reports and present their findings to President Bush in September 2003. At that time, the president will determine whether to keep the tariffs in place until 2005, amend them or repeal them altogether.
Representatives of MEMA member companies will travel to Washington DC on Thursday, June 19, to offer additional testimony on this concern before the ITC as part of the 332 Investigation. “This forum and related report will finally grant steel consumers, such as automotive suppliers, a place at the table in this critical debate,” Lopes said, “and we thank Chairman Thomas for his prominent support in this effort.”
