Increasing Imports Of Steel Are Damaging Domestic Steel Industry

From 2012 to 2014, imports of steels from Australia, Brazil, Japan, South Korea, the Netherlands and Turkey increased by 73%. As a consequence, domestic prices are driven down to compete with foreign imports. However, steel price in the US is still around $100 higher than that of Europe and $200 above Asia market. The wave of imports also leads to a decrease in domestic production, which is equivalent to a decline in profit. The devaluation of the yuan also severely impaired the U.S. steel industry (China also exports steels to the U.S.). Steelmakers in the U.S. are of no doubts strongly asking for tariffs on imports of foreign steels. The introduction of tariffs on steels import can greatly improve the situation by allowing for more domestic production of steels. However, tariffs also result in wasted resources and deadweight loss. A study to measure the cost and benefits of tariffs on imported steels should be taken in order to determine the most effective solution to this problem.
This article goes well with chapter 9 since it discusses international trades and tariffs.

1 Comment »

  1. harchikp Said,

    December 15, 2015 @ 12:12 am

    This article illustrates the need for tariffs to discourage foreign competition for domestic complacency. It is an example of how foreign markets each have something unique to offer the global economy.

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