April 28, 2003
Thursday's letter from University of Maryland Professor Peter Morici, "Steel tariffs benefit economy," includes many of the usual inaccuracies that domestic steel producers have used to gain government protection from global competition.
Without offering any evidence, Mr. Morici, a paid consultant to U.S. steel producers, claims that the Consuming Industries Trade Action Coalition (CITAC) study on job losses in steel-consuming industries is "flawed." The study findings that 200,000 Americans were unemployed in 2002 as a result of steel price increases are "flawed" only in the minds of a few steel industry partisans, such as Mr. Morici and his employers.
Mr. Morici's claims that the study did not take into consideration "important factors" is baseless. No one, including domestic steel producers, has been able to find legitimate flaws in the economic modeling used in the CITAC study. The results of the study are solid and have withstood vicious attacks by those allied with domestic steel producers.
Mr. Morici also has his facts wrong on global steel prices. U.S. steel consumers are paying more than in almost any other world market, in large part as a result of the tariffs. What matters to steel consumers is what they are paying for steel compared to their global competitors. U.S. steel consumers are losing business to offshore competitors at an alarming rate.
Protection of the domestic steel industry has been tried nine times in the last 30 years, and it hasn't worked. After all this protection, the steel industry will lose much of its customer base because steel consumers in the United States will either move offshore or close their doors.
Consuming Industries Trade Action
Coalition Steel Task Force