The economic rationale of antidumping law; The steel industry of the USA

Over the past decades the US steel industry has received lots of protection. One of the protective measurements was the antidumping law and in the past steel producers have been really fond of this law. The USA has been one of the biggest users of antidumping law over the past decades and over half of all cases involved its domestic steel industry. The use of this law drove prices of steel up and created a shortage of steel for domestic steel consumers. It are these steel consumers that suffer from this practice of the US antidumping law. The steel consuming industry is far bigger than its counterpart, the steel producing industry. The use of antidumping law has lead to a lot of forced layoffs and closures of companies. This paper points out that there is no economic rationale supporting such a use of antidumping law. The steel industry is important for domestic security but at the moment there is more than enough steel produced to guarantee it. The use of the antidumping law results in welfare loss for the entire US economy year in year out. The steel consuming industry, the WTO and foreign producers have all criticized this policy and therefore it is time that the antidumping law of the US or the use of it, is changed.