Question

The current U.S. administration has announced a plan to impose a 25% tariff on imports of steel, arguing that the tariff will protect the U.S. steel industry and ensure the competitiveness of steel manufacturing companies in the U.S. (refer to any article on the web). Do you agree with the argument that the U.S. steel manufacturers will be able to maintain its competitiveness by the tariff? Explain why.

Answer 1

Q) Do you agree with the argument that the U.S. steel manufacturers will be able to maintain its competitiveness by the tariff? Explain why

Answer:

Yes i agree with the argument that US steel manufacturers will be able to maintain its competitiveness by the tariff.
As it is clear after imposing as high as 20% of tariff on the imported steel , the prices gor importing goods will rise by a considerable amount either equal or even more than the price of steel locally available due to which the domestic consumers will be discouraged from importing it anymore , thus automatically shifting to local steel industries.

Us consumers will be encouraged to rather buy from the local steel manufacturing unit due to which the demand for steel in local markets will witness a hike.

This increase in demand will encourage healthy competition in the market. Now the Us manufacturers will try their best to meet such demand, for which they will utilize their labour and machinery very well and will use different strategies to reduce waste and increase efficiency.

This efficient utilization and large scale production will help the manufacturers to reduce the cost per unit.
Reduced cost will either equalise the price of local steel to the price of that of the imported one which will help manufacturers to stabilize the position and will try their best to use methods and technologies which will give the importers a good competition.
Moreover now if the price set by locals is less than that of the price of imported steel units , then the locals will be able to give a competitive edge to them. This will enhance competition and will remove the deficit of US.
The local steel manufacturers will also regain their market and customer base which they had lost to importers. Resulting in increase in loyalty and commitment.
Moreover through regaining composure, the steel manufacturers will now try best to keep up with the competition and do not lack behind. This will rejuvenate their worth and value due to which imported units will now not be able to preclude their resurgence.

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Hope i explained well

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