News From Congresswoman
Nydia M. Velázquez
Representing New York's 12th Congressional District - Brooklyn, Manhattan, Queens
Ranking Democratic Member, House Small Business Committee

For Immediate Release
July 23, 2002
Contact: Wendy Belzer, James Snyder (202) 225-2361

Record on Steel Tariffs Is Good for Many
Not all small firms hurt by protection - and many more helped

WASHINGTON - Congresswoman Nydia M. Velázquez (D-N.Y.), Ranking Democrat on the House Small Business Committee, today focused on complex effects of new tariffs on foreign steel dumped in the American market, arguing the record shows that many small businesses have indeed benefited from a level trading field, and that the effect of the tariffs have not been uniform.

In March, President George W. Bush imposed tariffs on cheap imported steel, which was sold in the U.S. market by foreign manufacturers who benefited from the high value of the dollar when selling below cost here. While the new protection helped American steel-makers, critics suggested that all small businesses would suffer from the higher, though fairer, cost of raw steel.

Congresswoman Velázquez argued the record on tariffs is not "black and white," that to assert all small businesses have been hurt by the tariffs is simply untrue, and that many small businesses in fact benefited from imposition of trade protection.

"The immediate effect of the tariffs has been to shore up a critical component of our economy - the steel industry - and has saved thousands of jobs," Congresswoman Velázquez said. "There is anecdotal evidence, however, that these tariffs may have had the unintended consequence of impeding the competitiveness of small manufacturers. The issue of tariffs is a complicated one that has affected many players in the economy, both large and small. But the idea that these tariffs have negatively impacted all small businesses is just not true."

"The truth is that small businesses across the country were hurt by the world's oversupply of steel, and the dumping practices of foreign manufacturers," Congresswoman Velázquez said. "These unfair trade practices not only hurt Big Steel, but also the small businesses that serve steel-making communities hit hard by the low price of dumped steel. In addition, small steel makers - mini-mills that produce recycled batches of steel from scrap - were also hurt by the continued, artificially low steel prices."

"We know that American industry, given a level playing field, can out-produce every other nation," Congresswoman Velázquez concluded. "We do not fear a truly free market. But when countries exploit our strong economy, 'dumping for dollars' by unloading their products at below market rates, that is not a level field. These tariffs are necessary to help our producers and many small businesses - and it tells the world that we are not the dumping ground for their products just because the dollar remains dominant."
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