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Assignment II The Dispute over Steel Tariffs Synopsis This assignment assesses the United States Government’s decision to impose tariffs of up to 30% on steel imports. It critically appraises the reasons for such a decision and discusses the possible reactions to it from Europe and other affected states. The conclusion exposes the author’s views as to the rationale for the US decision. Author Carmen Egusquiza Subject Macroeconomic Environment of Business Date 19th August 2002 Words 2,200 (approx.) TABLE OF CONTENTS 1. INTRODUCTION 2 2. INTERNATIONAL TRADE AND THE WTO 2 2.1 THE GATT 2 2.2 THE WTO 3 2.3 FREE TRADE FOR ALL? 3 3. THE US STEEL INDUSTRY 3 3.1 AN INDUSTRY IN DECLINE 3 3.2 DYSFUNCTION 4 3.3 COMPETITIVE ADVANTAGE 4 3.4 ANTI-DUMPING 5 3.5 THE WRONG SCAPEGOAT 5 3.6 RESTRUCTURING 5 3.7 'DEATH SPIRAL' 6 4. THE REACTIONS 6 5. CONCLUSIONS 7 5. REFERENCES AND SOURCES 8 1. Introduction In March 2002 the United States Government decided to impose tariffs of up to thirty percent on steel imports from Europe. Such a protectionist measure is likely to immediately steer considerable opposition from trade partners worldwide and political turmoil. Even more so when it comes from a country that pri