A chorus of critics has attacked the recent decision by the U.S. Commerce Department to offset the impact of dumped imports of steel from Japan, Brazil and Russia, imports sold at below their cost of production or below their home market price. The critics argue that this unfairly priced steel should be accepted as a gift to consumers. Rather than imposing duties or taking other measures to raise the price to reflect its true market value, the United States should accept dumped steel gladly and congratulate itself on being a bargain hunter. This viewpoint, however, is tremendously short-sighted. This gift to consumers comes with some very costly strings attached, including the loss of domestic steel companies like Geneva Steel, and there are at least three good reasons to counter steel dumping.

First, quite simply, dumping is against the law, and U.S. authorities are obligated to act. Ironically, some of the same Clinton critics who criticize him for undermining the rule of law argue for ignoring the law in this instance. The United States has had laws against dumping for most of this century. Further, anti-dumping laws, as they are known, are fully endorsed by the World Trade Organization. Under U.S. law, any industry that can prove it is being forced to compete with dumped imports it feels are injuring its economic health can demand that the U.S. government take action to halt the dumping.

In this case, there is little debate that steel is being dumped. All of the countries and most of the companies accused of dumping steel have been found to be dumping steel in the U.S. market in previous years. Desperate for hard currency and with little domestic market, Russian steelmakers have slashed steel prices far below their cost of production. Japanese steelmakers routinely export steel at far less than the price they charge Japanese domestic buyers; often, the price disparity amounts to a difference of hundreds of dollars per ton. Brazilian steelmakers have a similar history of dumping and subsidizing exports of steel; more than a half dozen successful complaints of unfair trading have been made against Brazil in recent years.

Second, the U.S. government should seek a level playing field for its companies. The world steel market is deeply distorted by subsidies, trade barriers, cartels and national industrial policies. Japan, Brazil, Russia and Korea, to name but a few, employ these policies to build up their domestic steel industry and encourage exports; dumping is the frequent result. For its part, the United States does little to aid its steel industry, tariffs are low, cartels are prohibited, and subsidies are quite small.

If the United States did not level the playing field by imposing duties on dumped imports, U.S. steel companies would not be able to compete. U.S. investment, production and employment in the steel industry would all decline precipitously. In a recent economic study of the problem of dumping in the steel industry, my colleagues and I at the Economic Strategy Institute found that the consumer benefits of dumping were rapidly outweighed by the negative impact of the economic losses in the steel industry.

There is also a political dimension to the level playing field. Simply put, free trade is not possible without fair trade. The American public is already suspicious of the merits of free trade. If the U.S. government does not act even in the face of demonstrated unfair trading tactics on the part of its trading partners, the political consensus that makes an open U.S. market possible will soon begin to erode.

Finally, the steel industry is an internationally competitive and valuable component of the U.S. economy. In previous years, the U.S. steel industry had undeniable problems, but more than a decade of rebuilding and retooling has created a highly competitive industry with some of the lowest production costs in the world. The modern steel industry is seeking a level playing field, not a handout. Further, steelworkers are so productive that they are able to command wages almost twice as high as those of the average U.S. job. Jobs in the new competitive steel industry are exactly the kind that the United States should encourage to ensure a healthy middle class.

Despite its critics, the Clinton administration can and should vigorously enforce its trade laws against dumped steel from Russia, Japan, Brazil and other countries that dump steel. Those who argue that dumped steel is a gift to consumers simply ignore the larger picture. One of life's lessons is that deals that are too good to be true almost always are. Certainly, this is the case with steel dumping; the gift to consumers simply comes at too high of a price.