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EU steel stocks tumble
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March 6, 2002: 11:29 a.m. ET
World's biggest steelmaker calls tariffs unfair, stocks tumble
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LONDON (CNN) - European steel stocks recovered some of their losses late on Wednesday, after plunging initially following U.S. President George W. Bush's decision to impose tariffs of up to 30 percent on steel imports.
The European Union has condemned the United States. EU Trade Commissioner Pascal Lamy said the decision to go down the route of protectionism was a major setback for the world trading system.
"The EU will of course launch an immediate complaint in Geneva (at the WTO) against this clear violation of WTO rules and we will take whatever measures are necessary to safeguard our own market," said Pascal.
Arcelor, the world's largest steelmaker, formed from the three way merger of Usinor of France, Luxembourg's Arbed and Aceralia of Spain, was 1.3 percent lower at 14.84 euros in late Paris.
Corus (CS-), the Anglo-Dutch steelmaker, was flat at about 81 euros in London after dipping in and out of negative territory, while Germany's ThyssenKrupp was down 1.1 percent in at 17.10 euros in Frankfurt.
Arcelor's chief executive Guy Dolle told Reuters the U.S. decision to impose tariffs was "unfair and incompatible with the laws of international trade" because the price of steel in the United States is 20 percent higher than in Europe."
The U.S. steel industry contends lower-priced imports are making their customers switch allegiances. The tariffs are meant to force steel exporting countries to cut global production.
"This is the wrong policy," Hans Redeker, an analyst at BNP Paribas, told CNN. "The steel industry has restructured but the U.S. is not competitive and now they are arguing 30 percent tariffs because they have been flooded by imports. They have to ask why is that the case?"
Many U.S. steel companies have filed for bankruptcy -- including No.3 U.S. producer, Bethlehem Steel and LTV, the nation's No. 2 steelmaker - citing labour costs and cheap imports. U.S. Steel Group, the largest U.S. steelmaker, said it is in talks to buy rival steelmaker National Steel. Meanwhile, European companies have also merged as demand declines amid a global economic slowdown and increased competition from Asia and Eastern Europe.
Corus called on the European Commission, the executive arm of the European Union, "to implement effective counter measures as a matter of urgency." The steel and aluminum maker, formed from in the 1999 merger of Hoogevens of the Netherlands and British Steel, said it may reconsider some exports to the U.S.
To underline the general malaise in the industry caused by an economic recession in the U.S., Germany and Japan, Usinor of France said on Wednesday it made a loss of 720 million euros ($627 million) in 2001.
"After a continuous erosion of economies during 2001, accelerated by September 11 events in the United States, some recent positive signals of recovery became visible in the North American continent," said the company.
"The speed of this recovery remains nevertheless uncertain but it is possible that a rebound of the American economy, even if moderate, could trigger a better orientation of growth for the year 2002." 
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