Italy Subsidies

Key Term: Subsidies

My key term for this week’s discussion board post talks about subsidies. This term relates very well to one of the reasons I chose to research Italy for my Global Business Cultural Analysis due to the fact that the United States does not offer much assistance to this country. Our text defines subsidies as special privileges offered by the government in order to attract businesses to a region or to provide them with funding to operate successfully. A nation’s government may provide tax breaks, lower the cost of required land, or offer other money saving techniques to businesses that it wishes to attract or maintain in a region. (Satterlee, p. 76) It is also important that we do not confuse subsidy on an international level with subsidy on a local level because foreign investment funding and other outside resources have a much greater potential to elevate local economic wellbeing.

As I was conducting my research I wanted to investigate further why the U.S. doesn’t offer much assistance. And as a result, I kept coming across so much information as to various reasons the U.S. decided to cut back on subsidies over a number of markets from industrial to farming, foods, technology, etc.

Pertaining to the industrial market, one article reported how U.S. steelmakers filed dumping charges against Czech Republic, Japan, France, India, Indonesia, Italy, Macedonia and South Korea. This issue triggered a domino effect of a series of unfair-trade complaints filed with the U.S. International Trade Commission and the U.S. Commerce Department. The complaints that were filed stated that the previously mentioned countries steelmakers either dumped steel in the U.S. or received unfair government subsidies.

The U.S. also claims that imports of cut-to-length plate from these countries have increased six fold and represent 60% of all imports of steel. And with the named countries controlling that much of U.S. imported steel, it literally overwhelmed...