By Sally Hardcastle BBC World Service business reporter

US Steel faces stiff competition from foreign companies

Cleveland in Ohio is a city built on manufacturing, particularly the making of steel, and it is right in the middle of what is known as the rustbelt in the United States.

But the American steel industry has been through a tough time with 120,000 jobs lost since President George Bush took office.

Unemployment is running at 6%, and Cleveland doesn't feel like a vibrant place. The shopping malls lack bustle, the streets are surprisingly free of jams.

At a Democrat meeting, one young voter said she was worried about economic issues.

"We all graduate college, and a college degree used to mean that you were guaranteed a job, but right now it doesn't. I have a lot of friends who have gone back to waitressing because the job market is in such a slump right now."

Job creation

Both the leading Democrat candidates say they will act to create jobs.

They want US companies to stop building factories overseas, and local congresswoman Stephanie Tubbs-Jones is glad to hear that.

She has her own ideas of what the president should do to safeguard jobs.

"One of the things that this president could do would be to suggest to Congress tax incentives to cause people to keep jobs in the US. Right now we have incentives for companies to do business in other countries and we need to take that tax advantage away," she said.

The prices that we're experiencing today are going to be just brutalising for manufacturers in our country Bo Burr, Atlas Steel

"A president in the course of negotiating trade agreements can press to have incentives for doing business with the US in exchange for doing business outside the US," she maintains.

"I'm confident there are better times ahead in Cleveland and across the country, but they will not be as a result of the tax cuts of the George Bush administration.

"I asked Secretary Snow the other day when am I going to see a job. He said all the indicators are there, but my people can't eat an indicator."

Protectionist solution?

This attack on trade agreements when they affect Americans sounds very much like old-fashioned protectionism.

Steel underpins Ohio's manufacturing industry, which has been haemorrhaging jobs recently.

An effort was made to protect US steel from foreign competition by imposing tariffs. They had to be lifted eventually because the WTO ruled them illegal.

At Atlas Steel they make products which end up in cars, appliances and lots of things we buy.

Bo Burr, chief executive at Atlas Steel in Twinsburg, which makes products that end up in cars and domestic appliances, says his company is enjoying brisk business right now.

"I'm happy to tell you we're enjoying a rising economy which is going to sustain us into 2004 at least, if not into 2005," he said.

Mayor Jane Campbell: Cleveland has suffered badly

He understands, however, that rising prices are going to be very destructive to the manufacturers in the US.

"The causes are many: They relate to steel scrap costs, the price of coke, and it's really driving steel prices way beyond sight," he said.

Eastern threat

The effect on manufacturing in general will also become more difficult when competing against Chinese manufacturers that are already bringing a great number of steel-laden products into the US.

"The prices that we're experiencing today are going to be just brutalising for manufacturers in our country," Mr Burr said.

"We see many more jobs going abroad. It's just a problem that will not go away as long as we have this kind of disparity between the Chinese manufacturing labour costs and our own."

Being an election year there is of course, a tremendous amount of rhetoric, but the aspects of our relationship with China go much more deeply into geopolitical implications - North Korea, the other issues of the world economy, plus China is a very strong investor in US treasury bonds and bills.

Bur Mr Burr is optimistic about the future.

"I strongly agree with our President. We are definitely in the middle of a recovery. The question is how sustained it is, and whether jobs will be recovered, as he says they will be. We hope he's right, but we have a tough road to haul," he said.

Cleveland's mayor Jane Campbell is less enthusiastic, however: