Effect of the Changes in Steel Tariffs on the Domestic and International Market
... Bush has made a point to its allies that is it ready to pursue US interests single-mindedly on a broad spectrum of issues ranging from missile defense to climate change and last week’s decision to impose tariffs of up to 30 per cent on steel imports follows the same trend of thought. Although there is a widespread consensus in the administration and Congress that tougher actions on steel trade is needed in order to generate jobs for American workers and to allow the struggling domestic industry to adapt to the large influx of imported steel, Washington’s announcement has triggered a storm of criticism from steel-producing countries around the world. The EU, among other major trading partners of the US, insists that the tariffs are illegal under World Trade Organization rules and has accused Bush of jeopardizing global free trade by promoting protectionism. Foreign steel producers are often nurtured by government subsidies and that has allowed them to build huge amounts of excess steel that has flooded US markets. In the late 1990s the US took the brunt of global exports when the demand for steel in Asia dropped as a result of the Asian economic crisis. Currently, the US is a net importer of steel products and in 2000 foreign imports accounted for 30% of the US market, 20% of which came from Europe. 1 In October 2001, an investigation of International Trade Commission concluded that these imports are a substantial cause of a serious injury to the domestic steel producers.