Marketing Management Case Study

The US Steel Industry and the Tariff Policy of Bush

OR

Abstract:
The US steel industry has been facing many problems such as price instability, overcapacity, high legacy costs etc. In June 2001, President George W Bush requested the US International Trade Commission (USITC) to conduct a Sec 201 investigation. In response to the findings of USITC in March 2003, the President ordered a three-year 'safeguard' measure on many steel imports. The European Union and other Asian countries complained to the World Trade Organisation (WTO) that the tariffs imposed by the US broke the international trade rules. They also threatened to impose retaliatory tariffs on US-made products, if the US did not take back the safeguard measures. On the one hand, the US steel producers wanted the tariffs to exist, and on the other hand, the steel consumers and the foreign countries wanted Bush to lift the tariffs. In either case, Bush will have to pay the political cost for his decision, since the Presidential elections are to take place in 2004. In November 2003, the WTO decided that the tariffs imposed by the US broke the international trade rules and that they were illegal. Finally on December 4th 2003, Bush took the decision to lift the steel tariffs, 16 months earlier than originally planned.

Pedagogical Objective:

• To understand how tariffs could be used as a means to protect domestic industry and the implications thereof in the light of international trade rules.

Keywords : US steel industry, Steel tariffs, America's protectionism, United Steelworkers Association,Government and Business Environment Case Study, Sec 201 investigation, Safeguard measures, International Steel Group, US steel imports, President Bush's steel policy, World Trade Organisation, European Union,Business Environment Case Study, Trade barriers, European steel, Trade promotion authority, Free trade policy

Contents:

• Background
• Steel Industry in the Bush Regime
• Results of March 2002 Safeguard Measures
• Actions of European Union and Other Countries
• The President's Decision