was cheaper to buy slabs from foreign mills than to make the slabs themselves (Robertson, 1998). For the U.S. steel industry, the negative effects of dumping out-weigh any positive effects. Demand for steel in the U.S. has been perfectly inelastic for much of the 1990s meaning that whatever the steel makers could produce the market would absorb no matter what the price. If demand is inelastic, a price rise leads to an increase in total revenue, and a price fall leads to a decrease in total revenue (Arnold, 1998). Dumping leads to lower prices, although demand is the same, total revenue decreases. Since 1997, The U.S. steel manufacturing industry has been suffering from the record level of steel imports that have been flooding the country. The situation has caused the collapse of a number of steelmakers, a reduction in operating levels and the layoff of thousands of workers. Before 1998, the peak level of U.S. steel imports was 27 million tons. Steel imports, in 1998 reached an all-time high of 41.5 million tons, a 54-percent increase over the previous record level (Garvey, 1999). U.S. Steel producers blame more than 10,000 layoffs in late 1998 and the bankruptcies of three steel companies in 1999 on the surge in steel imports.PROTECTIONThe illegal dumping of foreign steel products in the U.S. is depressing the steel-manufacturing sector in the U.S. America's steel industry wants special protection from falling prices in the global marketplace. Should this come at the expense of our nation's overall economic health?U.S. steelmakers and their unions have banded together and petitioned for protection against illegally dumped foreign steel. This campaign "Stand Up For Steel" has worked by putting the pressure on politicians in Washington to "do something." Doing something, particularly when it comes to a political heavy hitter like steel means relying on anti-dumping statutes. Anti-dumping laws, which penalize companies for se...
