Corporate Welfare

Steel: The Eternally Infant Industry

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It's an old story, but always worth revisiting: how government actions allegedly meant to "help domestic industries" hurt other domestic industries. See today's Los Angeles Times for a report on industry complaints about steel anti-dumping duties, that punish foreign steel suppliers for allegedly selling at too low a price. Southern California metal stamping companies complain that the duties have doubled their prices on galvanized steel; "U.S. and foreign automakers have joined other U.S. steel consumers to persuade the U.S. International Trade Commission to revoke the duties when it meets in mid-December."

Domestic steel makers say the car makers and steel users are being big crybabies and that, although the steel makers are in the scratch now (after, as the story notes, "shifting much of their multibillion-dollar pension liabilities to the government"), the domestic steel industry hovers always, in its own poormouthing estimations, on the abyss of economic doom: "they say the addition of capacity in China and India could lead to another steel glut and price-slashing if the global economy hits a rough patch."

An exec from Aggressive Engineering Corp., a Southern California metal stamping company. complains:

he had lost two of his biggest customers — a home electronics firm and a fitness equipment company — to competitors in China since the duties were imposed. He said his foreign competitors had access to cheaper steel and were able to produce and ship parts to the U.S. for the same price it costs him for raw materials.

Whole story of steel-sellin' men and the steel-usin' industries they are holding up here.