ABSTRACT
The foregoing examination of the history of steel trade policy has shown that proponents of steel protectionism have consistently and systematically penetrated policymaking structures to limit competition from imports. The formation of policies that protect domestic industries from foreign trade competition can generally be described as the culmination of a political process triggered by the failure of firms to adapt to an economic process of adjustment. The economic process associated with increased import competition begins when foreign penetration of the domestic market reduces domestic steel profits to a 'critical' level as perceived by the firm or industry. Increased imports may also be the result of local shortages in specific regions not conveniently serviced by domestic firms or of general domestic shortages of specific steel products. Steel, it must be emphasized, is not a homogeneous good. In a setting of unrestricted markets, a trade disturbance will compel steel industry to adapt to the new circumstances in strict accordance with efficiency criteria.
