The US Steel Industry in 2004: Still in Need of Protection

The US Steel Industry in 2004: Still in Need of Protection

The structure of an industry and its affect on the competitiveness of the industry

Since the late 1960s, the US steel industry has been asking for protection from imports and subsidies to help alleviate its troubles. The US government has, from time to time, announced various protectionist measures. In 2001, President George W Bush announced his Steel Program. It consisted of three parts: negotiations with trading partners to eliminate inefficient excess capacity in the steel industry worldwide; negotiations with trading partners to eliminate the distorting practices including subsidies that resulted in excess capacity; and investigation under Section 201 to determine whether the industry was harmed by low-priced steel imports.  

After the investigation by the U.S. International Trade Commission (USITC), in March 2002, the President imposed tariff measures under Section 201 to help domestic producers to compete with imported steel.

Issues:

  1. The structure of an industry and its affect on the competitiveness of the industry

  2. The rationale behind consolidation and its affects on industry structure

  3. The advantages and disadvantages of free trade

  4. The advantages and disadvantages of protectionism

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