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Saving the Steel Industry

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Abstract:

The record of government intervention and protectionism in the steel industry provides a guide to,the probable consequences of a national industrial policy for steel. The United States has had considerable experience with trade protectionism in steel, and such measures have only delayed adjustment in the industry, while inflicting higher prices on consumers and creating trade disputes. Yet trade restrictions and their damaging consequences would have to be intensified in order to provide the "breathing space" for the restructuring that industrial policy requires. And pleas for temporary protection invariably reappear, because the incentives implicit in protectionism actually work against
the adjustment it is supposed to promote.