Administration of the Steel Trigger Price Mechanism
ID-80-15: Published: Jul 23, 1980. Publicly Released: Jul 23, 1980.
- Full Report:
The steel trigger price mechanism (TPM) was established to speed up antidumping investigations. If imports were priced below preestablished trigger prices, the Treasury Department, which originally administered the program with the Customs Service, and later the Department of Commerce, could initiate antidumping investigations without prior industry complaint.
GAO believed that Customs may have overlooked a large volume of potential dumping, based on criteria it and Treasury used. The tonnage criteria were only for some product categories and not directly related to potential inquiries into the domestic steel industry. During the sample period, unconfirmed below-trigger-price imports amounted to 2.4 million tons, 40 percent of total covered imports. An estimated 355,700 tons were likely to be significantly below-trigger-price. This was almost six times greater than the 61,800 tons that Customs recommended for antidumping investigations or which could be associated with antidumping investigations. Total imports from those foreign firms which accounted for the 355,700 tons were 1.6 million tons, 27 percent of all imports covered by trigger prices during the sample period. GAO found a number of weaknesses in Customs administration. These included initial price comparison errors, delays in recording data, insufficient inquiries unanswered for a long time, and insufficient review of available information. Only four audits of steel-importing companies had been made, and the three completed by September 1979 did not adequately conform to audit objectives. Treasury may not have exercised sufficient care in handling Customs recommendations and investigations. The program was suspended in March 1980 when U.S. Steel filed major antidumping petitions.
Recommendation for Executive Action
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Recommendation: To improve the analysis of the basic TPM generated data if TPM is reinstated, the Secretary of Commerce should: (1) continue efforts to reduce import specialists' high rate of errors in making trigger price calculations; (2) establish cumulative telexing criteria and telex significant cumulative below-trigger-price shipments; and (3) establish procedures for automatically sending follow-on inquiries to importers who have not replied to telexes and other requests for information after a fixed period of time. To improve the procedures for arriving at recommendations to initiate antidumping investigations if TPM is reinstated, the Secretary of Commerce should: (1) together with the International Trade Commission, develop tonnage criteria based on potential inquiry considerations which could be used for determining dumping possibilities; (2) make systematic antidumping reviews of TPM information, using criteria established by Commerce; and (3) prepare written procedures for conducting antidumping reviews. To improve the procedures for preclearing steel mill products of foreign manufacturers if TPM is reinstated, the Secretary of Commerce should: (1) limit preclearance treatment to specific steel mill products and companies which have in fact been precleared; and (2) periodically check the prices of precleared items to ensure that they are within fair-value range as established by preclearance investigations. Finally, to ensure that antidumping investigations are properly pursued if TPM is reinstated, the Secretary of Commerce should: (1) respond fully to all recommendations to initiate antidumping investigations; (2) exercise care in dealing with recommendations to initiate antidumping investigations and the investigations themselves; and (3) maintain complete files on the disposition of TPM cases.