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How Imports Helped the American Steel Industry
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How Imports Helped the American Steel Industry

Dany Bahar
Brookings Institution, 2018
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Editorial Rating

8

Qualities

  • Analytical
  • Eye Opening
  • Overview

Recommendation

At one time, the United States produced all the iron ore for its steel production domestically. Then, in the early 1980s, foreign competition entered the US market and forced American producers to achieve greater productivity. In this eye-opening article, researcher Dany Bahar draws on this historical experience to explain how free trade – not trade barriers – supports the US steel industry. getAbstract recommends this succinct analysis to executives and trade experts for its cogent treatment of a relevant topic that has large-scale repercussions on the global economy.

Take-Aways

  • High shipping costs insulated the US iron ore industry from foreign rivals until the early 1980s, when Brazilian imports penetrated the American market. 
  • Rather than harming the US sector, the competition forced it to become more productive. 
  • Insulating US producers with protectionist trade tariffs will likely harm them, because it would significantly reduce the industry’s motivation to invest in the capital improvements and employee skills it needs to raise productivity.    

About the Author

Dany Bahar is a fellow at the Brookings Institution.

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