The U.S. Steel Industry

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The U.S. Steel Industry

Steel trade has been an important industry, from a strategic

perspective, as it U.S. weapons production, ship building, etc, …and

from a national perspective, as steel is an important input for

products like cars, washing machines, etc…Over the past 100 years, the

U.S. steel industry has gone from producing 37% of the worlds steel to

approximately 15%. Also since the 1960’s, the growth in steel

production has leveled off due the increase in the use of plastics and

the technological improvements in manufacturing. U.S. steel costs

are normally higher in the U.S. due to the wages and benefits

productions to employees and retires; in 1976, import restrictions

imposed had little effect, hence U.S. steel is still considered of

lower quality. By 2002, 31 U.S. steel companies filed for bankruptcy

protection.

Given the situation, there are a number of strategies that U.S.

government should consider, including that the U.S. government should

not be involved in protecting the steel, but instead should allowed

for free trade, imposing import restrictions in the form of a tariff

on imported steel, or offering support to the U.S. steel industry in

the form of subsidies and/ or the absorption of legacy costs. The

alternatives will be analyzed according to factors such as the impact

they will have on the steel producing industry, the international

reaction, the domestic reaction and the implications to U.S. taxpayers

and also the impact each alternative will have on the individual

consumer.

Given an analysis of the alternatives, it is recommended that the U.S.

government should consider offering support to th...

... middle of paper ...

... for the industry in general, because the steel industry is also

responsible of the development of many other industries, such as the

car production, buildings, ships, etc…so it will also help to maintain

and create more jobs, so the life standard will be improved. Hence

this improvement, U.S. steel industry, even it’s known that it will be

a slow process, will be able to compete with other nations, such as

European or South Korea, that owns the biggest steel mill in the

world, which make their steel industry independent enough to compete

worldwide. Following this, U.S. steel industry income will be higher,

consequence of the successful competition based on an international

scale. Finally, this new measures will help U.S. steel industry to

prevent bankruptcy situations, helped with the attachment of

protectionist laws.

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