| President Bush Lifts Steel Tariffs Facing outrage from manufacturers and global trade leaders, the White House's attempt at protectionism vaporized earlier this month when President Bush lifted tariffs on imported steel. The action averted a costly global trade war but angered the domestic steel industry and many of his Republican allies from Rust Belt states, where steelworkers have benefited from the protective measures he imposed almost 21 months ago. The tariffs, imposed in March 2002 and covering a wide range of steel products from several Asian and European nations, were originally scheduled to remain in effect for three years, until 2005, to give U.S. steel makers time to modernize their facilities to better compete against intense foreign competitors. However, the World Trade Organization's highest court ruled that the U.S. steel tariffs violated global trade laws, opening the way for member nations to retaliate with billions of dollars in punitive tariffs against U.S. products. President Bush's decision to lift the tariffs came after the European Union threatened to levy $2.2 billion in retaliatory tariffs on U.S. exports. Similar threats were made by other trading partners, including Japan and China. Bush Says Tariffs "Have Achieved Their Purpose"President Bush, speaking briefly to reporters before the formal announcement was made, said his decision would "be based upon my strong belief that America's consumers, the American economy is better off with a world that trades freely and a world that trades fairly." He justified the policy reversal by saying the tariffs, which raised the price of imported steel, "have achieved their purpose" -- granting a weakened domestic industry sufficient time to restructure and regain profitability. At the same time, Bush warned he would "quickly respond" if heightened U.S. monitoring mechanisms should detect unfair practices by foreign steel companies that damage the American steel industry. In the past, foreign companies have benefited from government subsidies and have sold their products in the United States at artificially low prices. To soften the impact on the struggling U.S. steel industry, President Bush pledged several measures designed to protect American manufacturers from a flood of cheaper imports. Those measures included expanding an import licensing and monitoring system to help head off surges in shipments of foreign steel into the United States. Furthermore, the administration pledged an aggressive application of U.S. antidumping laws to impose tariffs on specific steel products should those imports surge once the tariffs are lifted. Mixed Reactions to Tariff's Repeal The reaction to President Bush's decision was predictably mixed. The steel industry and labor assailed the move, while manufacturers that buy steel praised it. In March 2002, when the tariffs were announced, domestic steel manufacturers were in trouble. In the previous four years, more than 30 companies had declared bankruptcy. Bush's political advisers viewed the tariffs as not only a tool to help a vital domestic industry but also an opportunity to bolster political support among the nation's estimated 150,000 steelworkers. But the move antagonized manufacturers in steel-consuming states -- such as Michigan, with its auto-making plants -- because they had to pay more for steel, as well as other metals. The repeal of steel tariffs now opens the door to lower manufacturing costs to many industries. The reaction to President Bush's announcement from foreign countries was swift. Minutes after the President lifted the tariffs, European Union officials canceled their plans for retaliatory levies. Officials Insist American Steel Is Stronger Than EverU.S. Trade Representative Robert Zoellick emphasized that the economic challenges facing the U.S. steel industry have lessened since the president initially imposed the tariffs. "Not only is the industry much stronger today than it was 20 months ago, but the economic circumstances ... have changed," Zoellick said. In order to mollify steel-producing states, the administration vowed to continue pressing America's trading partners to reduce government subsidies for their domestic steel producers and to curb overcapacity and overproduction of steel manufacturers overseas. "I strongly believe that America's workers can compete with anyone in the world as long as we have a fair and level playing field," President Bush said. Compiled from wire reports and other media sources. | 
