NO LONGER BASIC IN ANY SENSE OF THE WORD. At Cato-at-Liberty, some reflections on the continued usefulness of steel tariffs.

By wiping those liabilities off of the books of several major bankrupt steel producers, that intervention paved the way for mergers and acquisitions and new labor agreements that have enabled the industry to retire inefficient capacity, cut its fixed costs, and consolidate production decisions. In 2003, the top three producers of flat-rolled steel (the steel used in autos, appliances, and construction) controlled 25 percent of flat-rolled steel production capacity. Today, the top three control 70 percent.

That concentration has given the domestic industry a high degree of market power, which enables it to prop up prices and weather downturns in demand by curtailing output. There’s nothing objectionable about that (with the exception of the government-assisted jumpstart) unless, of course, steel is a major component of the products you manufacture. What is objectionable, then, is buttressing this emerging oligopoly with continued trade restraints. Consumers of steel should be expected to adapt to the effects of greater concentration of steel production, but that adaptation requires having access to imported substitutes and supplements.

Taxpayers, steel-using industries, and consumers have subsidized this industry for too long.

In some economists' understanding of antitrust policy, the emergence of today's steel oligopoly is a long-term effect of the 1920 U.S. v. United States Steel (251 U.S. 217) antitrust case, in which the company famously beat an antitrust rap by arguing, in effect, "how could we be a monopoly if we had to discuss prices with our competitors?" The case is the basis of many an answer to the question, is protecting competitors equivalent to protecting competition?