|Industry and Labor Steel Themselves Against Imports|
|Key Words||Price, Import Duties, Tariffs, Imports, Demand, Production|
The price of hot-rolled steel fell 18 percent to $200 a ton in 1998. The market share of lower-priced imports grew from 23 to 35 percent. As a result, industry and union leaders are campaigning for import duties on the grounds that foreign companies are exporting steel to the U.S. at prices below cost.
Not all are sympathetic. Lower prices are seen as a result of fierce global competition. Steel imports help some countries suffering from the global financial crisis, and ultimately increase their demand for U.S. goods. Cheap steel benefits the competitive position of those industries using steel inputs. U.S. producers also miscalculated in increasing the price of steel in the Spring of 1998 as the price of imported steel fell. They also failed to reduce production when demand softened in the GM strike. Moreover, even if tariffs are imposed on a few countries, there is so much oversupply in the world that steel prices will remain low.
The steel industry counters that it has modernized and has reduced the size of its labor force. It also argues that its missteps were understandable because of ignorance about future market developments.
(Updated March 1, 1999)
|Source||Leslie Wayne, "American Steel at the Barricades", The New York Times, December 10, 1998.|
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