Effects of Globalization on the US Steel Producers Research Paper

Effects of Globalization on the US Steel Producers - Research Paper Example Globalization is an integrated term related to the people, industries and government policies of different nations. With the virtue of globalization, people today can share the new ideas, technologies, and techniques. These developed traits can further be implied by them into their own corporations with an aim of betterment. Therefore, globalization has a great impact on the culture, political system and economic development of any and every economy. Likewise, the US steel producers are also affected by globalization. For instance, the competition has increased in the international steel industry making it more challenging and complex. However, an industry can gain opportunities and incur threats simulataneuously due to the impct of globalization. The US steel industry is also fluctuated with many of the factors active in the global market. US steel industry is one of the major steel producing sectors in the inetrnational market. It chiefly produces iron-ore and coke for steel manufacturing. Worth mentioning, it achieved a net sales of 16,873 million doller in the year 2007 which was a steep rise when compared to the net sales amounting 15,715 million dollar in the year 2006. Besides producing steel, it is also involved in other business activities, such as developing transportaion via rail and barge operations (United States Steel Corporation, 2007). The integration of globalization with the US economy occurred rapidly which in turn affected the US steel industry quite strongly. Notably, the consequences raised by the integration of US steel industry with the global market were severe. For instance, the globalization provides the US consumers more choices and lower prices which increases the power of buyers at large. It also increases the employment rate in the global market (Plummer, 2006). As steel is chiefly produced in the US and in the South Korean industries, threre exists a wage restrain between the two economies. This illustrates the fact, that if the wages of the US steel industry is too high, then it will not be able to compete with South Korean steel suppliers and other economies as well. This would most probably lead the US steel producers to decline along with an increased constraint of unemployment. According to Plummer, hardly any other economy could compete with the US technology three decades ago. But presently s everal countries have advanced in technology as a result of globalization. This reveals the fact that the US economy requires to concentrate more on its competitive edge when compared with the international market. On the similar context, the imports and exports are also affected because of globalization which in turn influences the US based steel industry largely (Plummer, 2006). American Institute for International Steel, Inc’s study on The US Steel Market reveals that steel industry of the US has a record of profit gained from the exportation of steel in the global market. Higher prices of steel in global markets in comparison to that of the US steel industry has resulted in exports amounting approximately to 13 million tons. In this milieu, China, Europe and India are recognised as the major receivers of the US made steels (American Institute for International Steel, Inc, 2009). High freight rate and attractive prices in Turkey, Oman, Russia and Europe have