But the fact remains that regulations (safety, environmental, labor, etc) impose additional costs without perceptibly changing the quality of the output (the steel in this case), whereas these factors have a definite impact on the price. If you have a project where you need 16,000 #1 steel I beams, and you have two bids, one of which is 10% less than the other because the country of origin of that steel has absolutely no regulation in these areas, you are going to choose the cheaper company unless you have outside influences forcing you to do otherwise. As a US public company, I would go so far as to say that, barring outside influences, (which I would contend that you would object to, because it interferes with the free market) you are literally _forced_ to go with the cheaper quote, unless you want to face the wrath of minority shareholder lawsuits. The fact is that the company is polluting their environment or killing 10% of their workers annually can't be a determining factor, because it doesn't affect _your_ bottom line. Only un-free-market tactics like labor pressure, corporate conscience (ha!), and legislation (like tariffs) can make process go differently.

The fact is that pure economics suggests that countries should only produce items that can be produced more cheaply than anyone else. Regulation increases the cost of production, and thus makes the regulated products less competitive. Even if the US steel industry had made the 'correct' decisions historically (and they haven't, BTW, but that's neither here nor there), their product would still be more expensive than many other countries' steel because everyone uses the same system to make steel, but only some people have to deal with regulation.

So, perhaps the US steel industry should innovate! Yes, that's the answer! (in fact, historically, it has been.) Unfortunately, innovation only buys so much, because eventually your competition copies your innovation. So you need to innovate again to keep ahead. Well, this looks good, but look at the steel industry. This is an industry that has been around for hundreds of years, and they are about innovated out. There are no significant innovations to be made that are not based on other governing technologies, which come at their own pace; a pace much slower than the pace needed for the US steel industry to keep ahead of its competition.

So _the_ answer to making the US steel industry more competitive in the world market is to remove all regulations. But is this a good idea? No! If you were to do this, they would pollute the environment (high cost, just not a cost that the steel industry would have to bear), exploit their work force, and do all sorts of other unsavory things. That why we have the regulations in the first place.

So, if the US steel industry can't survive, the obvious answer is to stop producing steel. But this has another host of problems with it; US dependency on foreign steel sources, (temporary) economic downturn caused by the end of a major industry, etc. So, is this what you want? Do you honestly think that this is the best answer? This is the answer provided by the free market, so it must be the best, right?

I'm just trying to point out that the answer is not straight forward. It is complex, because there are factors other than local maximization of profit that matter, but a free market system only accounts for local maximization of profit. As such, people modify the free market system to attempt to foster other goals as well, like reasonable labor and environmental practices.