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Abstract

The March 2002 decision by President George W Bush to impose tariffs on some imported steel capped a long-running campaign by the US steel industry and its unions for assistance in dealing with surges of low-priced imported steel, often said to be sold in the US below its cost of manufacture. The Bush decision came as a surprise to many convinced that a free trade-oriented administration would not adopt measures likely to be viewed as protectionist. This case provides definitive historical context for those seeking to understand the Bush decision. It uses the long-running dispute over whether steps should be taken to limit the quantity of steel imported by the US as a window on the wide range of laws, factors, and players who influence the making of American trade policy. The case traces the steel dispute through the late 20th century, with particular focus on the Clinton administration. It provides a primer on trade laws, particularly the roles of the Commerce Department, which determines whether illegal ''dumping'' (selling below cost of production or home market price) of imported goods has occurred, and the International Trade Commission, the quasi-judicial federal agency which rules on whether imports have injured a domestic industry. More broadly, however, this is a case about how the American political system handles trade issues; it examines the confluence of lobby groups and Congress, the role of sub-groups (such as the so-called Congressional Steel Caucus, a group of members from steel-producing states) and committees within the Congress. It describes, moreover, the sorts of countervailing pressures which converge on the Executive Branch as it confronts the prospect of a so-called Section 201 action-policy retaliation in response to a finding that imports have injured a domestic industry, which the George W Bush administration took. The case is based on candid interviews with a wide range of key players, ranging from the Office of the US Trade Representative to representatives of the steel industry itself, involved in the steel trade debate. Research was overseen by Kennedy School professor Robert Lawrence, who served on the Council of Economic Advisors during the Clinton administration and was himself involved in the steel issue.

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Abstract

The March 2002 decision by President George W Bush to impose tariffs on some imported steel capped a long-running campaign by the US steel industry and its unions for assistance in dealing with surges of low-priced imported steel, often said to be sold in the US below its cost of manufacture. The Bush decision came as a surprise to many convinced that a free trade-oriented administration would not adopt measures likely to be viewed as protectionist. This case provides definitive historical context for those seeking to understand the Bush decision. It uses the long-running dispute over whether steps should be taken to limit the quantity of steel imported by the US as a window on the wide range of laws, factors, and players who influence the making of American trade policy. The case traces the steel dispute through the late 20th century, with particular focus on the Clinton administration. It provides a primer on trade laws, particularly the roles of the Commerce Department, which determines whether illegal ''dumping'' (selling below cost of production or home market price) of imported goods has occurred, and the International Trade Commission, the quasi-judicial federal agency which rules on whether imports have injured a domestic industry. More broadly, however, this is a case about how the American political system handles trade issues; it examines the confluence of lobby groups and Congress, the role of sub-groups (such as the so-called Congressional Steel Caucus, a group of members from steel-producing states) and committees within the Congress. It describes, moreover, the sorts of countervailing pressures which converge on the Executive Branch as it confronts the prospect of a so-called Section 201 action-policy retaliation in response to a finding that imports have injured a domestic industry, which the George W Bush administration took. The case is based on candid interviews with a wide range of key players, ranging from the Office of the US Trade Representative to representatives of the steel industry itself, involved in the steel trade debate. Research was overseen by Kennedy School professor Robert Lawrence, who served on the Council of Economic Advisors during the Clinton administration and was himself involved in the steel issue.

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