The Real Steel Issue

By David H. Feldman

 

Andrew Sharkey’s reply to my Op-Ed ["Big Steel, Bad Gridlock", Aug. 11] on "Buy American" legislation is a startling confirmation of my main argument. He claims rightly that U.S. steel firms like Nucor-Yamato (now there’s an interesting name) have experienced robust labor-productivity growth over the past twenty years. This fact alone should diminish the need for any remaining restrictions on highway spending that benefit a single domestic industry.

We are told that Buy American is a sound policy because our steel is produced in a "much more environmentally friendly manner than in many other countries." Be careful, Europe could use this argument to ban most American manufactured goods. After all, compared to them our output uses immense quantities of cheap fossil fuels that contribute to global warming.

Contrary to his assertion, many road contractors have experienced difficulties acquiring steel in a timely manner, and exemptions from the "Buy American" rules are a costly morass of red tape.

The Buy American rules are relics of the past that complicate our relations with neighbors (Canadian firms are currently excluded!), and impede negotiations with other trade partners who want to move away from the bad old days of national procurement preferences.

The real issue here for the steel industry is depressed prices. The domestic industry alleges massive foreign dumping.

Our anti-dumping legislation is often defended on the grounds that support for open markets will erode if foreign rules-breakers aren’t promptly punished. It strains credulity to think that current American anti-dumping processes enhance the fairness of international markets, but that’s a topic for another article.

 

David H Feldman