South-Western College Publishing - Economics  
U.S. Import Barriers Drop
Topic International Trade
Key Words Protectionism, Tariffs, and Duties
Full Article

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Reference ID: A155898829

News Story The International Trade Commission acted in December, 2006 to end tariffs and duties on high-grade steel used in producing automobiles. The vote by the commission revoked tariffs and duties against carbon steel plate from 16 countries.

The commission is an independent federal agency charged with the task of determining import injury to U.S. firms and make recommendations for import remedies. Once laws are established the commission reviews the laws every five years.

The current review resulted in the removal of the tariffs and duties on high-grade steel from all but two countries. Germany and Korea will continue to face the duties that were first established as a protectionist effort in 1993.

The original trade barriers were established to protect United States steel makers from the dumping of low-priced and subsidized imports that almost destroyed the U.S. domestic steel industry in the 1990's.

The turn-around came as DaimlerChrysler, Ford Motor, General Motors, Honda Motor and Toyota Motor joined together in support of the action to remove the barriers. The automakers contended that the trade barriers forced them to pay additional costs of $3 billion because of artificially high steel prices. The commissions vote offers an expectation of help for the struggling United States auto industry and manufacturers in dozens of other industries that use steel.

Questions
Discussion Questions:
1. Visit http://www.usitc.gov/ext_relations/about_itc/index.htm to determine and list 4 other tasks performed by the United States International Trade Commission.
2. Discuss the notion of dumping referred to in the article.
Multiple Choice/True False Questions:
1. Removal of the tariffs will decrease the costs of automakers.
  1. True
  2. False
2. Dumping refers to a situation where a country imports products to another country at prices much lower than in its own domestic market.
  1. True
  2. False
Source The Associated Press, "U.S. Drops Most Import Barriers to High-Grade Steel", The New York Times Online, December 15, 2006.
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