The U.S. government decided June 24 that six types of steel used in making molds are exempt from President Bush's tariffs on imported steel.
It is the largest single batch of exemptions yet granted to companies selling steel to the plastics mold-making industry. But the decision apparently leaves unanswered a bigger question - how the government will treat the most common brand of steel used in plastic molds, known as P20.
Officials with the Department of Commerce and U.S. Trade Representative did not return telephone calls seeking clarification.
The USTR said in a statement that it granted the exemptions, part of 116 handed out that day, because the products are not widely available from U.S. producers.
Excluding them would not undermine the 15-30 percent tariffs the administration enacted in March to protect domestic producers, USTR said.
One observer, however, suggested larger political meaning in the exclusions.
``The plastic mold tool-steel exclusion requests granted to date are consistent with the administration's efforts to stave off immediate retaliation by the [European Union] and Japan,'' said Sanford Ring, a trade lawyer with Dykema Gossett PLLC in Washington and general counsel for the Coalition for the Advancement of Michigan Tooling Industries.
The six grades exempted June 24 include four grades of steel from Japanese steel maker Daido Steel Ltd. that are distributed in the United States by International Mold Steel Inc., and two grades from Vienna, Austria-based BÃ¶hler-Uddeholm Corp.
Another grade aimed at plastic molding, known as AISI 420 electro slag remelt, was exempted by the USTR on June 7.
The tariffs are not aimed at the plastic mold market, and tool steel received a general exclusion from Bush's order in March. But some grades of alloyed and stainless steel used in mold making have been included in the administration's tariffs, leading suppliers to apply for exemptions and creating a need for sometimes-byzantine analysis to determine whether particular grades are covered.
The Washington-based Society of the Plastics Industry Inc., for example, filed a broad request that all steels used in the manufacture of molds be exempted.
``The intention [of the government] ... is not to go after the plastic mold-making industry,'' said Andrew Davis, traffic and import manager with BÃ¶hler's U.S. headquarters in Rolling Meadows, Ill. ``Specialty suppliers like ourselves who are also importers sort of get thrown into this. We find ourselves spending a lot of time and money to defend ourselves.''
BÃ¶hler was able to secure exemptions for its Ramax and Stavax brands June 24, and it also secured the broader exemption for a modified AISI 420 stainless-steel grade known as electro slag remelt.
The company has not received an exemption for another 420 grade that goes into molds for compact discs, but officials are satisfied that most of BÃ¶hler's products sold into plastics are exempted, Davis said. ``With this latest round of exemptions, we should be okay,'' he said.
International Steel said the four grades of Daido steel that were exempted June 24 are similar to exemptions granted to the company in March.
The June exemption is for round-bar versions of NAK 55, NAK 80, NAK HH and PX5, while the earlier exemption covered plate versions, said Tom Schade, executive vice president of International Mold Steel in Florence, Ky.
But the company's Porcerex brand has not received an exemption, he said.
One of the Daido exemptions, for NAK 55, also is prompting steel distributor Crucible Service Centers in Camillus, N.Y., to seek an exemption for its imported Highstar 40 brand because it feels it is similar, said Stan Glover, Crucible's manager of plastic and mold steels. A Crucible sister company makes steel in the United States but also imports some grades.
More exemptions from the tariffs are expected. The government put out an extensive list June 26 of more steel grades that it is considering for exemptions, including more than 20 grades used in mold making.
Industry sources seemed divided about whether the widely used P20 grade will be subject to tariffs, but most observers said they expect it to be exempt.
BÃ¶hler's Davis said he thinks it will be exempted because its high carbon content will put it within the general exemption for tool steel. But Schade said P20 is considered an alloy and probably will be covered by the tariffs.