The Politics of Trade in Steel

Essay by jarretmiranCollege, UndergraduateA, January 2007

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1. Do you believe the Bush administration was correct in imposing tariffs in March 2002 on a wide range of steel imports?

I believe that President Bush needed to do something to protect the US steel market. At the time that President Bush decided to impose temporary tariffs on steel imports, 16 steel manufactures were already operating under bankruptcy protection (Hill, 2005). The whole idea of the tariffs as explained by Leo Gerard, the president of the United Steelworkers of America, was to protect American jobs by giving the industry a chance to rebound and to give the steel manufacturers a chance to upgrade their mills so that they could compete against the more efficient foreign producers (Hill, 2005). Did the Bush administration do the correct thing? I believe that they tried, but in the end the tariffs only protected the profits of steel you htink it protected workers?

2. Who are the main beneficiaries of protective tariffs such as those imposed on steel imports? Who are the losers?

The main beneficiaries are supposed to be the American economy, "domestic producers and employees against foreign competition, and to raise funds for the federal government" (Hill, 2005). On the flip side, the increase in tariffs only hurt the consumers and foreign businesses by increasing the prices of steel and almost starting a trade war with foreign economies. yes Because the US had established tariffs on steel, other countries had begun counteracting by imposing their own tariffs against US exports and began to seek compensation from the US through the WTO for their losses (Hill, 2005). The US economy also lost because businesses were not able to buy steel as cheap as they could if they were able to buy from foreign markets and thus had to pass the increased...