Tariff fallout hits port

Published 12:00 am Thursday, March 14, 2002


LAPLACE – The effect of President Bush’s recent decision to place a hefty 30 percent tariff on imported steel could have a devastating fallout here, according to Port of South Louisiana Executive Director Joseph Accardo Jr.

Accardo noted that most of the four million tons per year of imported steel goes to the ICG Rail Terminal in Convent and various mid-stream operations. Accardo noted the past six months have seen “a slow decrease in steel coming in,” but no drastic drop. However, the Port of South Louisiana, which extends the length of the Mississippi River through St. Charles, St. John the Baptist and St. James parishes, has not yet surveyed other steel importers.

“The way the tariff is structured over the next three years may be breathing room to recoup losses and may have no effect at all,” Accardo said. However, he said of Bayou Steel of LaPlace, the structure of the new Bush tariff “does not protect them in any fashion.”

He continued, “It may make it worse for Bayou Steel. I hope they can survive this setback.”

The tariff was designed to help northern steel manufacturers rebuild the industry by keeping cheaper foreign steel out of the country, especially since the onslaught of Asian steel since 1998, according to Richard Gonzalez, Bayou Steel’s chief financial officer. However, those companies which depend on imported steel for its own livelihood could be crippled.

As for Bayou Steel, as the northern steel mills increase production and less import steel comes in, Accardo said, “They’re getting whipsawed, both domestic and foreign.”

And, he expressed concern that the protectionist tariffs on foreign steel will result in retaliation by those nations who may cut back on their own imports of American grain, another possible blow to the port business, which is heavily dependent on grain exports.

Gonzalez said Bayou Steel, in operation since 1983, does not itself import any steel, but the dumping of Asian steel on American markets undercuts their ability to sell their own products.

He added he has seen some of Bayou Steel’s customers approached with up to 20,000 tons at a time “at fire sale prices.”

However, the last six to 12 months have been rough on the LaPlace plant, both due to the Asian steel flood and the downturn of the American economy. This has resulted in a cutback in workforce from 500 Louisiana employees to 350, the reduction from three shifts to two and the loss of up to 50 contract employees, Gonzalez said.

What’s more, with the reductions, Bayou Steel’s work-week has been cut from seven to four days. “We hope to get back to five days a week soon,” Gonzalez added.

The effects have been even more devastating to the Port of New Orleans, where steel imports have quadrupled since 1998, flooding American markets with cheap steel.

The United Steel Workers of America local chapter, which struck Bayou Steel from 1993 to 1996, is completely on the mini-mill’s side in this struggle, and he said the union is already petitioning the Federal Trade Commission on the plant’s behalf.

“The union’s been very supportive of us,” Gonzalez said.