Made In The U.S.A.

Steel

In Adventures on June 12, 2009 at 12:59 am

Last month–centuries in blog time–I photographed a convention of steel manufacturers. Major American steel manufacturers. Big ones.

They don’t like China.

I learned lots of things at that event, but I can’t say I learned anything as much as how complex the whole protectionism/buy-American argument can be.

So I thought I’d write about it. I figured I would stew on some of these subjects, do a bit of research, and hopefully come up with something insightful. I can’t promise anything other than that I’ve stewed, and now I’ll write. Hopefully we’ll all learn something in the process.

Without further ado, here’s the first installment. I’ll keep it simple.

During a press conference with the president of said steel organization, a question came from a British publication. The reporter asked, with surely more eloquence than this, “We live in a global economy. Isn’t protectionism bad?”

I thought to myself, yes, yes it is. Protectionist policies, as I understand it, led us into the great depression of the 1930s. (Protectionism is the idea that we buy our own stuff to keep our money here. Sounds good on the surface, but then our trade partners cry foul, do the same thing, and the whole trade system collapses.)

Turns out, according to the steel producers, the term protectionism may be bad, but as it regards their product it’s actually a good policy.

Go figure.

But then the top steel guy made a good point. He said in a true fair trade agreement, protectionist policies are bad. But in the real world of 2009 American steel producers aren’t facing fair trade competition. Private companies are competing against entire governments. Foreign governments subsidize production of steel in other countries (China, Turkey, et al), they manipulate their currencies to keep costs down, and they essentially rig the system so that the American makers who are playing by the rules just can’t compete.

So until our government steps up and defends our producers, he said, trade isn’t fair–and so these “protectionist” policies are necessary for our steel producers, businesses, unions, employees and ecomony to survive.

Interesting point.

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