Memorandum From the President on the American Bolt, Nut, and Large Screw Industry

Memorandum for the Special Representative for Trade Negotiations

Subject: Determination Under Section 202(b) of the Trade Act; Bolts, Nuts, and Large Screws of Iron or Steel

Pursuant to section 202(b)(1) of the Trade Act of 1974 (P.L. 93-618, 88 Stat. 1978), I have determined the action I will take with respect to the report of the United States International Trade Commission (USITC), transmitted to me on, November 3, 1978, concerning the results of its investigation of a resolution submitted by the Committee on Ways and Means of the House of Representatives.

The USITC investigation pertained to lag screws or bolts, bolts except mine.... roof bolts and bolts and their nuts imported in the same shipment, nuts, screws having shanks or threads over inch in diameter, all of the foregoing of iron or steel, provided for in items 646.49, 646.54, 646.56, 646.63, and 646.79 of the Tariff Schedules of the United States.

After considering all relevant aspects of the case, including those c( set forth in section 202(c) of the Act of 1974, I have determined that import relief in the form of 15 percent tariffs on iron or steel bolts, nuts, and screws is in the national economic and therefore will proclaim this remedy. Under this remedy, tariffs will remain at 15 percent for large screws (including lag screws), 15 percent plus the current tariffs of 0.2 and 0.1 cent per pound, respectively, for bolts and nuts for a three-year period after which time they will revert to their current levels (which range from, less than one percent ad valorem equivalent to 12.5 percent).

As required by statute, this relief must be implemented within 15 days of this determination.

The USITC recommended that tariffs on iron or steel bolts, nuts, and large screws be increased to 20 percent and staged down to 10 percent (except for lag screws where the tariff would revert to its current level of 12.5 percent) over a five-year period.

I have determined that the USITC remedy would not be an appropriate remedy for a number of reasons. The USITC remedy would substantially increase the cost of ferrous fasteners to U.S. consumers, thereby adding to inflationary pressures in the U.S. economy. Due to its shorter duration (three years versus five years as recommended by the USITC) and smaller tariff increases (15 percent versus 20 percent), the remedy I will proclaim will have a smaller inflationary impact on the U.S. economy, while still providing meaningful and necessary relief to the domestic fastener industry.

Given the recent increases in the prices of imported fasteners, the USITC remedy would be overly restrictive on the foreign countries that supply fasteners to the U.S. market. The smaller tariff increases that I will proclaim will mitigate the adverse impact of providing import relief on foreign suppliers of fasteners and on U.S. international economic interests.

The tariff increase remedy I have chosen should enable many domestically produced fasteners to be competitively priced relative to imports. Thus, implementation of this remedy should prevent further erosion of domestic fastener production, shipments, and employment and allow domestic producers to increase their share of the U.S. fastener market by using currently idle capacity.

This determination is to be published in the FEDERAL REGISTER.

JIMMY CARTER

[Filed with the Office of the Federal Register, 11:36 a.m., December 26, 1978]