The push for imposition of tariffs on steel imports will likely lead to retaliatory trade moves by European steel producers and others. U.S. president George Bush is expected to issue his ruling by March 6.

"The huge burden of retirees faced by most integrated steelmakers has been the biggest obstacle to consolidation in the industry, which is seen as necessary to reduce costs and close uncompetitive steel mills," the Financial Times stated bluntly, placing the blame for the state of the capitalists' enterprises on union members.

U.S. government officials announced this week that the cost of such a bailout would be around $21 billion over the next decade, a figure more than 50 percent higher than that floated by the steel bosses. The United Steelworkers of America estimated that the amount owed by all 38 U.S. integrated steelmakers to their retirees comes closer to $17.5 billion.

The U.S. Steel Corp. announced in December that it was interested in purchasing some of the other largest integrated steel producers in the country if Washington would take responsibility for the benefits program. Together with U.S. Steel, the six companies involved--LTV, Bethlehem, National, Inland, Wheeling-Pittsburgh, and Weirton--account for about 85 percent of U.S. integrated steel production.

Under contracts signed by the steel companies with the union, these benefits were supposed to be guaranteed for workers who retired after decades of laboring in the steel mills. The idea that the companies were setting aside funds to cover pensions has proved to be a cruel illusion. Even Bethlehem Steel, which recently filed for bankruptcy protection, says it went from having a fully funded pension plan to a $2 billion shortfall last year because of losses incurred in stock market speculation.

U.S. Steel issued a statement in mid-February stating that it would "probably not go forward" with its plan to consolidate the steel industry if the Bush administration does not impose the full 40 percent tariffs demanded by industry executives.

The proposed merger--which will involve further plant closures, job eliminations, and attacks on union rights--is the steel bosses' response to declining profits and what they describe as a worldwide "overcapacity" of steel production. By some estimates this reaches as high as 200 million tons. In capitalist terms, overcapacity means too much steel is being produced for the steel barons to sell at a profit, not that there is no need for this amount of steel in the world.

Steel prices have been hovering at 20-year lows, while nearly 30 U.S. steel companies have declared bankruptcy over the past four years.

Nucor, the second-largest U.S. steelmaker, also announced that it plans to step up the filing of trade cases to block imports if the import duties are not implemented. "Steelmakers already file far more trade cases than in any other industry," noted a Wall Street Journal article. In a further consolidation move, Nucor has put in a bid to buy rival Birmingham Steel's assets.

While considering a record multibillion dollar bailout for domestic steel producers, Washington's trade representatives, who are attending meetings set up in February by the Organization for Economic and Cooperation and Development, are railing against assistance given by governments in other countries to their steel industry. At these talks, an article in the Financial Times reported, U.S. officials are proposing that "governments agree in the new round of World Trade Organization talks to eliminate subsidies to the steel industry, putting a major new issue on the WTO agenda."  
 
 
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