Fighting for steel

The controversy about the possibility of the United States to increase the customs duties on the import steel is gathering pace. President Bush should either agree or disagree with an offer from the leading metallurgical companies of the country to raise the duties by 40%, putting the insurmountable obstacle for the import steel. The American companies hope to improve their position this way. The share of the imported steel on the American market started growing during Bill Clinton’s presidency. For example, in 1995 this share made up only 4.5% of the entire market of steel in the USA, but in 1998 the figure increased up to 28%. There is a very easy explanation to it: there was a problem of overproduction of steel during the second half of the 1990s. Furthermore, the countries-exporters could not sell their production on the home markets, there was no need in such big amounts of steel. America's economy was developing and the need in steel was growing with it.

Japan and Brazil are the major steel suppliers for the US market, and steel takes one of the main positions in the export of these countries. No need to mention that the introduction of the sanctions will seriously hit these producers. That is why both of the countries declared that they would impose the sanctions of their own in respond, against the American goods. The EU was not silent either. The Union threatened to lodge a complaint to the WTO against the USA’s actions.

The export of steel is one of the most important conditions for the Russian and Ukrainian steel producers to survive. Russia's and Ukraine’s markets can not cope with the entire volume of steel output by themselves. It is no use to search for a European country as an alternative sales market; moreover, the European and Asian steel manufacturers have the same sales problems.

So, one may not envy the position of the American president’s administration. Another trade war may start - does Washington need it now, when the whole world is not happy about the USA’s behavior? On the other hand, the White House can not ignore the American electorate’s sentiments. A lot of steel makers in the USA have already lost their jobs, eleven large steel companies have gone bankrupt over the recent ten years. There are also the interests of the steel consumers – they are interested in the low prices, and this has to be taken into consideration too.

Thus, the White House is facing another very serious problem. But Bush’s administration has a good shot to prove that it can solve the problems of the economic character.

Oleg Artyukov PRAVDA.Ru

Translated by Dmitry Sudakov

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