By the late 1960s steel imports had begun to disrupt the tight grip U.S. steelmakers held on the domestic market. Domestic producers responded by seeking protection as a temporary palliative to provide time for modernization programs. The threat of a trade war combined with an inhospitable political atmosphere toward protectionsim ruled out the possibility of a legislative solution to steel's problems, but the sheer size of the industry made some form of protection politically necessary.
The two Voluntary Restraint Agreements represented a political compromise designed to give the steel industry time to reestablish its international productive hegemony. But steel did not take advantage of the VRAs. Indeed, absolute investment declined and it soon became clear that U.S. steel corporations were moving out of basic steel production. Diversification programs and overseas investments now characterized capital spending by the nation's steel producers. This grim scenario was further exacerbated by the tendency of conglomerates to swallow up large steel corporations. Higher levels of centralization through mergers, joint venture subsidiaries, and dual primary interlocks accompanied the trends toward diversification, conglomeration, and internationalization of production. In a word, the period between 1969 and 1974 provided a watershed for the industry, for it was during this time that many U.S. integrated steel firms decided that steel was a much too risky business. As steel's economic power waned, the industry sought political solutions against imports so that its power became more visible at the height of its decline.