1995 Reports

Challenges Facing Japanese Steel in Today's Global Economy

Fujitani, Yoshitaka

Japanese steel production has surpassed U.S. output since 1982. This shift in steel output
leaders occurred against the background of a severe recession in the United States caused by high inflation, subsequent high interest and strong dollar policies which were extremely damaging to
American manufacturing, not only to steel but also to auto production and other areas. The final
blow, which made the recession even worse, was rising energy costs fueled by the oil crisis. The
loss of American manufacturing competitiveness was followed by a hollowing-out effect as some
manufacturers moved off-shore. Since 1982, the U.S. current account has been in deficit.