Steel Dump for the World

by Patrick J. Buchanan – October 23, 1998

Fourteen years ago, foreign steel producers began dumping heavily into the U.S. market, choking America’s industry near to death. Big Steel went to the president. Ronald Reagan listened and acted.

On Sept. 22, 1984, he took to the airwaves to denounce “predatory practices” that had made America a “steel dump for the rest of the world.” “(T)hat simply isn’t acceptable,” said Reagan, as he pledged “swift, effective action.” He was true to his word.

“Voluntary export restraints” were imposed on steel dumpers who had grabbed 26.4 percent of our market. Imports were rolled back to 18.5 percent. With the U.S. market cordoned off for U.S. steel, $22 billion in investment capital poured into the industry. Productivity soared.

Reagan showed how strong governments act to protect their own in tough times. That economic patriotism is making a comeback. Before Congress adjourned, populist Democrat James A. Traficant introduced a resolution demanding a year’s cutoff of steel imports from any country caught violating U.S. anti-dumping laws.

Republicans offered a milk-and-water substitute, but it got only 153 votes, all Republican. By 345-44, Traficant’s resolution then rocketed through. Yet all 44 “no” votes were cast by Republicans.

Can the party not see the handwriting on the wall? The GOP had best get aboard and steer this train, or it will be run over by it, as it was on fast track. For the trade numbers just in guarantee that new America First trade laws will be passed in the 106th Congress, with or without Republican backing.

Consider: From January to August 1998, steel imports from Japan were up 141 percent over 1997; from Korea, 96 percent; from South Africa, 124 percent; from Australia, 160 percent; from India, 71 percent; from Indonesia, 387 percent. In August alone, Russian and Ukrainian steel imports were double and triple what they were in August 1997. Should Congress fail to act, the U.S. steel industry will be devastated before 2000.

As we can see now, the Asian crisis is a direct result of overproduction. Japan, China and the Pacific Rim, competing ferociously for U.S. consumers, built far too much capacity. Asia’s factories have been churning out far more goods than the world can consume. Like a herd of cattle that has become so numerous it eats up its own pasture and must be thinned, Asia’s industries must be culled for the good of all.

But instead of a modest slaughter of its own, Asia, egged on by the International Monetary Fund, has decided to drive its herds over into our range land — to eat out our forage and kill our cattle, instead of their own. That is how nations naturally behave in troubled economic times.

The Clintonites, however, being good globalists, are perfectly content to let this happen. “Our policy has been (that) our markets … remain open,” says Trade Representative Charlene Barshefsky. She has also told incredulous Europeans, who take in a tenth of the steel we do, that they, too, should absorb more foreign steel.

While this comports splendidly with the theories of England’s 19th century Utopians like Richard Cobden, from the standpoint of Alexander Hamilton’s economic nationalism, it is madness.

Projecting the January-August trade figures to year’s end, the United States is going to run a 1998 trade deficit in manufactures of $229 billion or 17 times our trade surplus in farm goods. We will end the year having exported about $543 billion in manufactured goods but having imported $772 billion.

What these numbers say, nay, scream, is that all the blather about our future being in exporting to “the 96 percent of our consumers who live outside the United States” is nonsense. The greatest potential market for U.S. manufacturers is that huge share of the U.S. market our free-trade zealots have given away.

This year, we will run $172 billion in trade deficits in vehicles, textiles, office machines, TVs, VCRs and electrical machinery alone — but trade surpluses in cigarettes, corn, soybeans, animal feeds, meat, wheat, cotton, coal, hides and skins, rice, pulp, waste paper, tobacco, fats, flour and fertilizers. This is the kind of trade profile America had around the time of the Lewis and Clark Expedition.

Folks, these numbers are no longer just about trade. They are about national security and national survival. They are about whether America, faced with trade wars being launched against her, will embrace a policy that is indistinguishable from pacifism. And if the GOP is going to stand with Clinton and globalism, and against Americanism, both are inviting the same political fate in 2000.