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Free trade is an idea that is publicly promoted by many governments worldwide. In reality though, free trade is limited by the various political ambitions of the government. Recently, President Bush has demonstrated his willingness to deploy protectionist measures by placing tariffs and quotas on steel imports. The arguments put forward by the steel industry are persuasive, however they warrant closer investigation. The current measures, like those of the past, can be shown to be backed by false logic, and will actually harm the economy in the long term. First, let's discuss the tactics used by the U.S. steel industry to convince the government and the public about the alleged need of protectionism.

The steel industry has used several of the classic arguments in the course of lobbying for tariffs on steel imports. Their primary argument is that other countries have been illegally dumping their excess steel on the U.S. market at prices below production cost, allegedly made possible by government subsidies and other protectionist measures in the these foreign markets. According to the American Iron and Steel Institute (AISI), imports have driven prices of steel down to unprecedented levels, causing the bankruptcy or liquidation of 35 American steel companies. The steel industry also claims that 10,000 jobs were lost per year directly attributable to imports. The steel producers did not stop at using fear of lost jobs to advance their cause; they also used the cheap ploy of patriotism.

American steel makers have also used the argument for military self-sufficiency to promote their agenda. Without a doubt, steel is the primary component in many critical areas of our national defense, the building of ships, tanks, and other modes of transportation being just a few. A recent publication from the AISI had this to say: "Losing our domestic steel industry would leave U.S. manufacturers dependent upon foreign producers for the next generation of steel products, and would directly threaten America's economic leadership in any number of critical industries."

While dumping is a valid concern, using it as an excuse for protectionism is highly susceptible to abuse. In order to use employ anti-dumping laws, it must be shown that import prices were intentionally fixed below production cost in order to hurt domestic manufacturers. Since it is often difficult to prove intent, American producers lobby lawmakers for protection such as tariffs and quotas.

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