The Dispute over Steel Tariffs

            
            
             Synopsis This assignment assesses the United States Government's decision to impose tariffs of up to 30% on steel imports. It critically appraises the reasons for such a decision and discusses the possible reactions to it from Europe and other affected states. The conclusion exposes the author's views as to the rationale for the US decision.
             Author Carmen Egusquiza.
             Subject Macroeconomic Environment of Business.
             Date 19th August 2002.
             Words 2,200 (approx.).
             .
             TABLE OF CONTENTS.
             1. INTRODUCTION 2.
             2. INTERNATIONAL TRADE AND THE WTO 2.
             2.1 THE GATT 2.
             2.2 THE WTO 3.
             2.3 FREE TRADE FOR ALL? 3.
             3. THE US STEEL INDUSTRY 3.
             3.1 AN INDUSTRY IN DECLINE 3.
             3.2 DYSFUNCTION 4.
             3.3 COMPETITIVE ADVANTAGE 4.
             3.4 ANTI-DUMPING 5.
             3.5 THE WRONG SCAPEGOAT 5.
             3.6 RESTRUCTURING 5.
             3.7 'DEATH SPIRAL' 6.
             4. THE REACTIONS 6.
             5. CONCLUSIONS 7.
             5. REFERENCES AND SOURCES 8.
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             1. Introduction.
             In March 2002 the United States Government decided to impose tariffs of up to thirty percent on steel imports from Europe. Such a protectionist measure is likely to immediately steer considerable opposition from trade partners worldwide and political turmoil. Even more so when it comes from a country that prides itself in being the champion of free trade.
             This assignment discusses the reasons that lead to this decision being taken by analysing international trade in general and the steel industry in the US in particular. .
             The reactions from Europe and other affected countries are also appraised.
             The conclusions list the author's view on the subject considering the arguments made throughout the assignment.
             2. International Trade and the WTO.
             Trade was the engine of economic growth in the 19th century: countries dropped their restrictions on free trade, while the Gold Standard was used worldwide to measure the value of goods and currencies, providing a universal currency.
             However, after the Wall Street crash, which led to a worldwide slump in economic growth, the world reverted to protectionism.