The Harmful Effects. One of the driving forces behind S. 61 was the steel industry, which had aggressively petitioned Washington for relief after the Asian financial crisis of 1997 and 1998 had flooded the U.S. market with lower-cost steel imports. Interestingly, the steel industry will be a primary beneficiary of the new antidumping policy. The need for such relief is not as great as the industry outcry. Thus, the majority of companies in the steel sector actually benefit from lower prices for steel, and American consumers benefit from lower prices on such products as automobiles, major appliances, and housing.
Protectionist policies limit competition and increase costs.
U.S. manufacturers are right to worry that foreign countries will retaliate for this new policy and subject U.S. products to their own antidumping rules. According to The Rushford Report , a Washington, D.C.-based newsletter on trade and politics, more than 130 American exporters have been subjected to antidumping investigations in recent years. Some of these investigations undoubtedly were a form of retaliation for U.S. antidumping investigations. Perhaps the worst result of this policy is the incentive it gives U.S. businesses to seek additional relief from foreign competition through the application of antidumping law. U.S. firms already have an incentive to seek protection, because a favorable ruling would make their goods and services more competitive and imported goods and services less competitive.