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The problem of the dumping of cheap steel by foreign countries has plagued the United States for decades.

Recently, President Obama’s Commerce Department took the dramatic step of imposing duties on South Korean to stop dumping steel pipe on America to the detriment of domestic steel manufacturers. The U.S. Commerce Department determined that these materials had been sold below cost, in violation of international free trade agreements.

Foreign Steel “Dumping”

South Korea has been suspected of being a major offender in the problem of dumping cheap steel on the U.S. market. However, the practice has gone on for years, creating havoc in the profit margins of American steel producers across the country.

Foreign governments subsidize a number of industries, including steel production, giving them a significant financial edge in their exports. In recent years, China has also used the tactic to dump tubular steel products on the United States. In 2010, tariffs were imposed on China to slow the stream of their steel onto the American market.

Demand For Steel

Increased activity in the energy sector has caused an increased demand for steel products including steel pipe and other items used in the oil and gas drilling industries. If these products were acquired from U.S. manufacturers, the sales would help to boost employment and increase revenues.

Even operations that mine for mineral components used in steel production would benefit. The continued import of foreign products has the effect of stifling growth throughout the U.S. economy.

U.S. Steel Producers Push Back

American steel producers were determined to fight back against the most recent assault. They named nine nations suspected of using unfair trade practices for dumping steel on the American market, including Saudi Arabia, Taiwan, South Korean, Thailand, Ukraine, Turkey and Vietnam.

A series of rallies were held around the country, including Lorain, Ohio; Granite City, Illinois; McKeesport, Pennsylvania and Fairfield, Alabama to bring attention to the issue.

Protecting Domestic Steel Producers

International trade agreements specifically recognize dumping as an unfair trade practice. The U.S. government has continued to investigate claims of dumping in order to prevent the unfair advantage against American companies.

U.S. steel manufacturers feel their industry is not only critical for jobs and the economy, at large, but also is a critical factor in homeland security, with steel being used in many importantindustries such as transportation, energy, construction and health services manufacturing. Being able to rely on high quality steel produced at home strengthens the country’s ability to serve domestic needs regardless of changing global political and economic factors.

How Tariffs Help

Many experts feel that protecting the American steel industry allows the country to maintain its self-sufficiency in an uncertain world. The ability to depend on high-quality steel available from the domestic market assures that the United States will have a strong base for maintaining its own infrastructure, defense industry and manufacturing sector.

Allowing other countries to dump their government-subsidized steel on the American market at cheap prices undermines the ability to take care of domestic needs.

Photo by Dennis Jarvis / CC 2.0