President Bush s decision to impose temporary tariff of 30 percent on U S steel imports
Background The dispute over US tariffs on steel started as early as the summer of 2001 when President George Bush initiated an investigation into the effects of imports on the US steel industry through the International Trade Commission. The steel industry worldwide is characterized by considerable overcapacity, which results in stiff price competition. This competition is made even tougher by the fact that many countries ladle out low-interest loans, forgive producer’s debts, give tax breaks, and subsidize price cuts that keep their steel exports competitive. ... Steel manufacturers in the US were heavily under pressure in this market situation because concentration and modernization of the industry had not yet reached the same level as in other industrialized countries. Also labor cost was far higher than in developing, steel producing nations. In December 01 the ITC indeed reported that some steel products were being imported at quantities that would threaten to cause severe harm to the domestic industry. Therefore, on March 5th 2002, President Bush proclaimed safeguard measures in the form of protective tariffs.