FREE TRADE VS. PROTECTIONISM

Which Way for the US Steel Industry?

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SECTION 201 TARIFF MEASURES LIFTED

In December 2003, the president lifted the tariffs and thus avoided a trade war with the EU and Asian countries. Announcing the lifting of the tariffs, the president said, "I took action to give the industry a chance to adjust to the surge in foreign imports and to give relief to the workers and communities that depend on steel for their jobs and livelihoods. The safeguard measures have now achieved their purpose, and as a result of changed economic circumstances, it is time to lift them." The Bush administration was of the opinion that since March 2002 when the tariff measures were imposed, the industry has consolidated and improved productivity, thus it was time to lift the tariffs. However, the president in his statement said that he would continue to monitor the imports closely to detect any destabilizing surges of cheap foreign steel. He also said that negotiations with U.S's trading partners to reduce government intervention such as subsidies would continue through the OECD.

The Bush administration seemed to have realized that trade is quid pro quo…

EXHIBIT I
Imports of Steel in to The Us

Adapted from The American Steel Industry Current Trade Issues 2003, www.dbtrade.com/publications.

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[21]Bush lifts tariffs on imported steel, EU drops plan to retaliate; U.S. steelmakers criticize, New York Times, December 4, 2003.

[22]President's Statement on Steel, December 4, 2003, www.whitehouse.goc/news/releases.

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