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236. Memorandum From the Chairman of the Economic Policy Group (Miller) to President Carter 1

SUBJECT

  • Administration Steel Policy

Consultations with EC Commissioner Davignon 2 produced the following:

—that protectionist pressures in the EC are likely to become more unmanageable if the TPM is suspended and if U.S. steel firms other than the U.S. Steel Corporation file antidumping petitions; and

—that if the TPM were kept in place and if other firms did not file petitions against EC steel producers, he would review without commitment the U.S. Steel petitions to determine what EC actions, if any, were needed to correct dumping where there are large margins and trade volumes.

Since U.S. Steel continues to threaten imminent submission of anti-dumping petitions, I recommend that you make a decision clarifying the Administration’s policy on the TPM as soon as possible. Papers outlining the arguments for each option—suspending the TPM (Tab A), maintaining the TPM (Tab B), delaying a decision on TPM until 20 days after the cases are filed (Tab C)—are attached.3

The options are:

1. Suspend TPM if and when the two U.S. Steel petitions are filed and announce at that time that the TPM will be reinstituted if the cases are withdrawn. In addition, instruct all Administration officials to avoid seeking any further restrictions on steel trade.4 This would not preclude announcement of second quarter trigger prices if the petitions are delayed. Supported by Treasury, CEA, NSC, Kahn and the OMB.5 These agencies oppose both options 2 and 3 on identical grounds. In [Page 689]our opinion they are not distinct options since they will produce the same results.6

2. Maintain the TPM for 90 days if U.S. Steel limits its petitions to a maximum of two countries, to allow time to seek a negotiated solution that is satisfactory. Supported by State, Labor, Agriculture, Commerce, USTR, DPS, and the Vice President.7

3. Announce second quarter trigger price (at the same level as first quarter) and postpone making a decision on the suspension of the TPM until 20 days after the petitions have been filed. Use the 20 day period to evaluate the petitions for sufficiency and to consult with our European trading partners. Supported by Commerce and USTR 8 if you reject option 2.

G. William Miller 9
  1. Source: Carter Library, Staff Office Files, Council of Economic Advisers, Charles L. Schultze Subject Files, Box 80, Steel [1]. No classification marking. Carter initialed “C” at the top of the page.
  2. Telegram 65105 to Alsteel Collective, March 12, reported on Davignon’s March 10–11 visit to Washington to discuss the steel issue with U.S. officials. (National Archives, RG 59, Central Foreign Policy File, D800126–0350) In a March 13 memorandum to Carter, Askew and Klutznick discussed Davignon’s visit, argued in favor of TPM retention, and proposed a scenario for future negotiations. (Carter Library, Staff Office Files, Council of Economic Advisers, Charles L. Schultze Subject Files, Box 80, Steel [3])
  3. Tabs A–C were not attached.
  4. This would not preclude attempts to negotiate an elimination of the dumping margins and thus withdrawal of the suits. [Footnote in the original.]
  5. Carter underlined the words “Treasury,” “CEA,” “NSC,” “Kahn,” and “OMB.”
  6. Carter indicated his approval of this option
  7. Carter indicated his disapproval of options 2 and 3.
  8. Klutznick presented this proposal in a March 12 memorandum to Carter in which Askew concurred. (Carter Library, Staff Office Files, Council of Economic Advisers, Charles L. Schultze Subject Files, Box 80, Steel [3])
  9. Miller signed “Bill” above this typed signature.