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A Thought for the day

Some of the automotive suppliers from U.S. have demanded for exclusions from the high tariffs which were mostly agreed by the Bush administration and almost all companies filed range from Tier ! producers to the small Tier 3 Producers.

Motor& Equipment Manufacturers Association (also named MEMA), taking into account the possibilities of serious job losses has required for an expand of existent guidelines of the second stage of exclusions and 'to consider the critical factors of price and supply steel as part of its decisions''s.

Despite the fact that MEMA is prone to support an existent of domestic steel industry, its tariffs had a strong negative effect on the automotive suppliers, according to Chris Bates the president of MEMA. This supply constraints and the increases in price which are generally a result of the high steel tariffs are now obliging large Tier 1 Automotive suppliers to start creating or buying components that they have previously created and purchased from foreign sources.

According to what MEMA claims, a tendency of responding to the increase of steel tariffs is to reduce the production and to start thinking about the movement of some manufacturing facilities permanently abroad. MEMA also claim that the shift of movement facilities and jobs to other countries where prices remain the same is growing fast.

The industry of auto parts suppliers haven't benefited from the first round of the process of exclusion, taken care of by the Department of Commerce and the U.S. trade Representatives's office.Taking into account the fact that the U.S. manufacturers of automotive parts and components reach a price of 95 percent of the steel from U.S.A they have not felt relief from the existed guidelines of the administration's exclusion process.

The process has described mainly speciality forms of steel from abroad which could not been created or bought from the U.S. market. The U.S. steel producers have reached exclusion in the first tour for importing slabs and flat-rolled steel products at low prices, while steel costumers have gained minimal relief. Moreover, competitors from abroad have gained a more powerful control over the U.S. market by buying steel at normal prices and by exporting finished or partially finished products at lower tariffs.

MEMA claims is heavily concerned by the fact that high steel prices will threaten the viability of a powerful American manufacturing center' without a secure supply of raw materials and a steady cost structure, U.S. auto parts and components manufacturers will not be able to secure future business and to ensure their competitive stance in the global automotive industry', MEMA claimed.

MEMA will continue as strong supporter of the House Resolution, introduced by representative Joe Knollenberg on Oct. 9. The legislation which happens to be bipartisan has gained support in the 107th Congress and it has been introduced again in the

House in 3003. This Resolution of Knollenberg's asks the president to ask that the International Trade Comission should reconsider the effect of the tariffs on steel consumption industries in U.S.

The present analysis must be included in the ITC's midterm review of the administrations's steel program, which should be released by September 2003, said MEMA.