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The Politics of Trade in Steel

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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 employees.do 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 cost on to the American consumers.

3. Does the World Trade Organization in this case represent a loss of U.S. national sovereignty? Why do you think the WTO sided with the European Government?

In this case, I do not think the World Trade Organization represented a loss of U.S. national sovereignty. I believe that the US was exercising their political right to try and protect American steel producers and American jobs. I have to believe that the Bush administration knew what they were doing and knew that the European Nations would counteract with a case to the WTO. However, I am sure that there were other political and economical interests involved that took precedence and Bush decided to gamble on what would take the most precedence. Bush probably knew that any action by the WTO would be very slow and full of internationally diplomacy and he could make a quick score for the economy and give the steel producers some time to upgrade their manufacturing facilities by imposing these steel tariffs.

4. If all tariffs on international trade in steel were removed, and subsidies to steel exporters around the world were banned, who would this benefit? Who would lose from such action?

I believe that if all the tariffs on international trade in steel were removed and subsidies to steel exporters around the world were banned, that the most efficient steel manufactures would benefit. I believe that those steel producers who could provide the best product at the lowest cost would ultimately dominate the steel market. Those who would lose by such an action would be the steel producers and the economies that depend on the jobs from the steel manufactures that are less efficient. This would primarily apply to older less updated manufacturing facilities and would definitely apply to those countries who depended on the revenue from tariffs associated with steel import/exports.


Hill, C. (2005). International Business: Competing in the Global Marketplace (5th ed.). New York: McGraw-Hill. Retrieved January 14, 2007, from University of Phoenix, rEsource, MGT/448 – Global Business Strategies at https://mycampus.phoenix.edu/secure/resource/resource.asp

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