With the steel import monitoring system in place for another four years, domestic producers - and those who benefit from the Wheeling-Pittsburgh Steel Corp. plant in Allenport - can look to the future with greater confidence.
The system does not protect domestic producers as effectively as tariffs would, but it will be valuable in the ever-changing steel production arena. It will allow U.S. steelmakers and the federal government to keep tabs on foreign producers looking to dump steel at unfairly low prices. And the system will provide the government with time to react to sudden market changes.
In free-market economies, the supply-and-demand system works. It promotes competition and efficiency.
However, many foreign producers do not operate within free-market economies. Many nations are more interested in U.S. dollars than they are in fair trade or even profit.
After the Soviet Union disbanded, the republics that once formed the communist nation faced extreme financial distress and rampant inflation. The republics immediately flooded the world with aluminum and steel, which shook both commodity markets.
China, another communist system in which the government largely determines business practices, is emerging as major player in the international marketplace. It, too, has dumped steel and other commodities at subproduction prices in the United States and other countries.
Because of such practices, it is important to keep tabs on foreign production and pricing strategies.
Steel consumers - especially automakers - see no need for tariffs, monitoring systems or any other controls. With the bottom line always in mind, such consumers covet dirt-cheap steel and care little for domestic producers. Should the domestic steel industry fail, though, the bargain steel pipeline would instantly run dry.
The domestic steel industry has undergone monumental changes in recent years.
Thanks to consolidation, employee-employer partnerships and modernization efforts, the domestic steel industry is in better shape than it has been since the early 1970s.
The recovery process is not yet complete, though. Until it is, the monitoring system will provide important protection that will ensure fair trade.
