The U.S. Steel Industry in Recurrent Crisis: Policy Options in a Competitive World

The U.S. Steel Industry in Recurrent Crisis: Policy Options in a Competitive World

The U.S. Steel Industry in Recurrent Crisis: Policy Options in a Competitive World

The U.S. Steel Industry in Recurrent Crisis: Policy Options in a Competitive World

Excerpt

The year 1977 marked a major turning point for the U.S. steel industry. The industry's recovery from the deep 1974-75 recession was aborted by a sudden surge in imports and the price cutting associated with this surge. Two major producers announced plant closings and a third smaller company suspended production altogether. Net income for the industry fell to virtually zero. Rumors spread that the industry would close more plants unless the government quickly came to its assistance. Its cry was heeded.

The Trade Policy Crisis

With industry and the United Steelworkers of America applying the pressure, the Congressional Steel Caucus of more than 200 members was hastily formed. Protectionist legislation was readied. The White House was bombarded by complaints that the administration had failed to enforce the trade laws. The Carter administration responded by inviting the steel industry to bring formal trade cases to the Treasury Department so that "unfair" import competition could be dealt with according to the 1974 revision of the Antidumping Law. This led to a spate of dumping complaints against the European and Japanese exporters at a time when the United States and its trading partners were in the final stages of negotiating the Tokyo Round of tariff reductions under the General Agreement on Tariffs and Trade. Prosecution of the steel antidumping cases would surely have interfered with the successful consummation of the multilateral trade negotiations, and it would have added inflationary pressures at a time when inflation was accelerating dangerously.

Once the full implications of the new dumping suits were understood by the Carter administration, it became necessary to construct a set of policies to ease the pressure on the steel industry and its employees, induce the companies to withdraw or suspend their dumping complaints, quiet the congressional proponents of trade protection, and minimize the contribution to domestic inflation, which was rising to 7 percent and beyond. To accomplish these rather difficult tasks, the president's economic advisers sought out . . .

Author Advanced search

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.