As the world grows and advances, industrial globalization occurs. Industrial globalization affects the economies of many nations throughout the world. One industry whose globalization has affected the cost and supply of its product is the steel industry. In the last few years, the steel industry has experienced an increased demand for steel, which in turn has caused the cost of steel to increase drastically.
1. Do you believe the Bush administration was correct in imposing tariffs in March2002 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 manufacturers 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).
I believe the Bush administration tried, but in the end, the tariffs only protected the profits of steel employees.
2. Who are the main beneficiaries of protective tariffs such as those imposed on steelimports? 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 other 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. Since 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...
References: ill, C.W.L. (2004). International business: Competing in the global marketplace (5th Ed). New York, NY: The McGraw-Hill Companies
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