| Steely-Eyed Realism |
8 December 2003
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Bush Administration Drops Steel Tariffs
After the WTO decided that the tariffs President Bush had slapped on imported steel was against its rules, it was only a matter of time before the Americans lifted the taxes. Ever sensitive to photo-journalism, Mr. Bush waited until he had left a Pittsburgh fundraiser before making the move. Ironically, the tariffs needed to go for the good of the country.
American manufacturing has had enough trouble over the years without the added joys of paying higher prices than necessary for steel. The policy of "protecting" American steel producers merely drove up the costs to American steel consumers. At the same time, it did nothing to address the global over-capacity in steel manufacturing -- a situation that ultimately works against the high-wage US steelworkers. Mr. Bush was fibbing in a statement that said, "These safeguard measures have now achieved their purpose, and as a result of changed economic circumstances, it is time to lift them."
Beyond the steel industry, though, there was a greater issue at stake. Mr. Bush is roundly condemned by his antagonists as a unilateralist. That is not entirely true. In this case, he accepted the decision of the WTO and avoid European counter-tariffs (which would be permissible following the WTO finding) in order to protect the international trading body. Membership in the WTO is one of the levers that he has used in his dealings with non-members, most notably China. It is a lever that he has used to some effect.
Now, though, his playing to the gallery is at an end. His new policy consists of monitoring the sale of steel to ensure that no dumping (that is, selling at below cost) by other nations occurs. If that weren't enough, the appeal to national security needs never got a hearing. Steel production is not going to win this war the way it won previous conflicts. The Bush administration does understand some things that its critics miss.
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