Reagan acts to aid steel, farms.
Washington — Steel industry labor and management are divided on whether President Reagan has handed them half a loaf or just a half-eaten slice of the import protection they both had sought.
The President Tuesday rejected a recommendation from the International Trade Commission (ITC) that a combination of tariffs and quotas be applied to roughly 70 percent of steel imports.
Instead the administration announced it would try to encourage foreign steel producers to limit ''surges'' of imports and reduce unfair trade practices for a five-year period.
Negotiations on voluntary trade restraints with major importers could cut imports of finished steel products from the current 24 percent to 18.5 percent of the US market, the administration contends. US Trade Representative William Brock said an import share of the US market of 18.5 percent is what the administration hopes it can obtain but is ''not a commitment.''
The degree of protection from imported steel which the arrangement will actually provide will largely determine the impact of the administration's plan on the whole of the economy, congressional experts say.
The potential results of cutting steel imports, analysts say, are higher steel prices, slightly higher consumer prices, and fatter steel company profits. Other possible results could include modest recalls of laid-off steel industry workers and harm to US companies and workers that produce products made with steel for sale to foreign buyers.
The impact ''depends on enforcement,'' says Louis Schorsch, a Congressional Budget Office economist who wrote a recent report on the economic impact of steel imports.
''Is it a wall (that imports cannot go over or) will it be difficult to enforce and relatively porous?'' The tougher the enforcement, the bigger the effects would be, he says.
The plan's precise costs and benefits may be impossible to judge at this point. At most, the plan could push up US steel prices 5 to 7 percent, thus boosting consumer prices by 1 percent or less, analysts say.
Higher steel prices and bigger sales could add as much as $2 billion a year to the funds steel companies can invest in new equipment. And higher steel demand could result in the recall of up to 25,000 of the 200,000 steelworkers who have been laid off, labor and management officials say.
Steel industry executives say the plan, if carried out, would provide needed relief for an industry that lost $6 billion in 1982-83.
''It is an appropriate response'' to the industry's request for aid, ''but not the millennium,'' said Donald H. Trautlein, chairman of both the Bethlehem Steel Corporation and the American Iron and Steel Institute.
''I personally feel 18.5 percent is too high'' a target for import penetration, says Mr. Trautlein. Labor and management had asked the ITC to limit steel imports to 15 percent of the US market. ''We are told the President is committed'' to enforcing the plan.
But United Steelworkers of America president Lynn Williams said the plan contained ''weak and uncertain promises,'' and depended on ''the hoped for good faith of the very foreign governments who have encouraged exports of subsidized and dumped steel to the United States.''
Both Mr. Williams and Bethlehem executive Trautlein still favor passage of a bill limiting imports to 15 percent of the US market. But the measure is given little chance of clearing the Senate before Congress adjourns.
Williams says President Reagan's plan contained ''nothing he could not have been doing all along. (It is) all the things he has failed to do.'' The steelunion has endorsed Democratic presidential candidate Walter Mondale. He unveiled his own steel protection plan on Monday and Wednesday he criticized the Reagan plan for demanding ''nothing of the industry.''
Profits tied to import restrictions, Mondale says, should be required to be reinvested in improved steelmaking facilities. ''We must also insist there are price restraints'' on steel, Mondale said at a campaign stop in Stockton, Calif.
Foreign reaction to the Reagan plan was mixed, with Japanese officials voicing disappointment. The European Economic Community agreed with the US in 1982 on voluntary steel import restraints. Those arrangements will be reaffirmed under the Reagan steel plan. A Common Market official in Brussels said market members are happy with the arrangement.
Most analysts say the protection will help the big steel firms but not change the need for continued major changes, includig shedding additional excess production capacity, to deal with remaining problems. These problems include costs that are higher than foreign producers, technology that is less modern, stiff competition from domestic mini-mills, and slumping demand from major customers like automakers.
The administration's protection package ''certainly is not going to obviate the need for major ongoing changes in the industry,'' said CBO economist Schorsch.