Misgivings About Steel Tariffs
March 7, 2002
Economists and trade experts say President Bush's decision to opt for tariff increases of up to 30 percent on imported steel is unjustified.
- Domestic steel mills themselves import perhaps 25 to 30 percent of all steel that comes into U.S. ports; the American industry couldn't function without imports.
- U.S. steelmakers have hardly been mistreated -- having received more than $17 billion in government subsidies in the last quarter century.
- Since raising steel prices will push up the cost of cars, farm equipment, washing machines and every other product having steel components, it will cost the average U.S. family $200 or more per year.
- While old steelmakers have predicted doom without a tariff, newer and better-managed managed mills have flourished, and U.S. steel imports actually dropped 21 percent last year.
Tariff apologists claim that the domestic steel industry is the most efficient in the world. They cite statistics that show that the industry has spent $60 billion since 1980 to increase efficiency.
Why then, critics ask, does it need the artificial protections of higher tariffs to fend off foreign competition?
Sources: Greg Rushford (Rushford Report), "Bush Steps in a Steel Trap," Wall Street Journal, March 6, 2002; Editorials, "Industry Wins, Consumers Lose as Bush Imposes Steel Tariffs," and Rep. Peter J. Visclosky, "Blame Foreign Dumping," both in USA Today, March 6, 2002.
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