Cato Podcast The $650,000 Question: How Steel Protectionism Fails
Nov 4, 2025
The impact of U.S. steel protectionism costs a staggering $650,000 per job saved, demonstrating the inefficacy of tariffs. Historical trends reveal a long-term decline in the steel industry despite decades of protective measures. Buy American rules add financial burdens while failing to ensure competitiveness. Recent disputes over acquisitions spotlight political and economic ramifications. The hosts suggest market-oriented solutions to revitalize the industry, advocating for reforms in trade practices and regulations.
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Decades Of Protectionism Failed
- The U.S. steel industry has received persistent protectionism for nearly 60 years.
- These policies inflated domestic steel costs and failed to restore global competitiveness.
Highly Concentrated Market, High Prices
- The domestic steel market is concentrated with five firms controlling ~70% of the market.
- U.S. steel prices are among the highest globally, hurting downstream manufacturers' competitiveness.
Postwar Complacency And Protectionist History
- Clark traces postwar U.S. steel dominance to technological complacency and rising foreign competition.
- He recounts repeated protectionist tools from the 1960s–1990s that raised prices and delayed necessary adjustments.