Bringing a mixture of gentle persuasion and thinly veiled threats, US trade officials on Monday pressed steel-making countries from around the world to reduce their production and lift prices.
But while analysts agree that the steel industry is in dire straits, few countries seemed ready to accept big cuts for themselves, and the European nations are outwardly hostile to American demands.
In meetings here held by the Organization for Economic Cooperation and Development, the Bush administration is pressing countries like Russia, Korea, China and Japan to outline plans for shutting down inefficient factories that add to the glut of unneeded steel. The gentle persuasion came in the US' emphasis on "market based" reductions rather than government-ordered factory shutdowns. But the unmistakable threat in the background was President.
Bush's coming decision on whether to impose heavy tariffs and other penalties on steel imported into the US.
The International Trade Commission, a US panel, has proposed a range of restrictions and will issue its formal report to Bush on Wednesday. Bush has two months to decide on the recommendations, and the steel industry is lobbying hard for protection.
"This will help set the economic context in which the president can make his decision," Grant Aldonas, undersecretary of commerce for international trade, said in an interview here Monday.
Steel prices have dropped by about one-third this year as manufacturing industries have tumbled into a severe downturn. US steel makers have lost more than US$1 billion this year, and 25 companies have declared bankruptcy.
Steel makers in most other countries are struggling as well, in part because steel prices have dropped to the point where most cannot turn a profit. Industry analysts estimate that steel costs US$260 a ton to produce, but the market price now is about US$200.
There is considerable disagreement about how much overcapacity exists. American officials said they did not expect to extract explicit commitments from other countries about reducing production. Rather, they hope to win agreement on the dimensions of the overcapacity and at least a general road map on how to reduce it.
But European officials are furious, arguing that the US is reverting to protectionism while failing to push through the necessary restructuring at home.
Taiwan economic officials are attending the OECD meeting in an effort to protect the interests of the domestic steel industry.
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Wei said that the US is the third-largest market for Taiwan's steel products, followed by China and Japan, by absorbing 30 percent of the nation's steel exports.
Since the US government took a number of anti-dumping measures last year, Taiwan's steel exports to the US have decreased significantly, he said.
Taiwan, which has also expressed its opposition to Clause 201 to the US authorities, has begun to divert its steel exports this year from the US to China.
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