But there already are signs of diversions of semifinished and increased tonnages from nonoffending countries. For those countries covered by suspension agreements, the typical format contains what is effectively a several-month period in which no exports to the U.S. are permitted, followed by a series of increasing annual quotas at pretty low prices. Although as a producer I would much prefer letting trade laws take their course rather than supplant them with suspension agreements, when such a remedy is chosen by the Administration, it should be based on decreasing annual quotas to encourage the offending countries to develop their domestic steel markets. International financial institutions such as the World Bank should be prevented from supporting developing countries that wish to install surplus steel capacity. A way must be found to cure major steel-producing blocs from their constant dependence on export markets to support their internal social policies.
Steel remains the most widely used material, but it is no longer labor-intensive.
Steel costs, on a delivered basis, are more dependent on freight than labor, and low import prices, which seemingly belie this point, are artificially low. If we are not to be held hostage by competing industrial blocs in the future, we need to maintain a vibrant domestic steel industry. That means the President's Steel Action Plan must succeed.