A global trade ruling against U.S. steel tariffs puts White House in a Mess

The Miami Herald / AP ^ | 11/10/2003 | Lara Jakes Jordan

[ex-Texan]

A global trade ruling against U.S. steel tariffs puts White House in a Mess

WASHINGTON - A global trade ruling against U.S. steel tariffs Monday put the White House in the middle of a political and economic squeeze play as President Bush weighs the sanctions' fate - and his re-election prospects.

Supporters and opponents of the three-year tariffs shelled the White House with arguments over whether to keep the sanctions in place in the face of a new World Trade Organization ruling declaring them illegal. The European Union has threatened $2.2 billion in retaliatory sanctions if the tariffs, imposed in March 2002, are not immediately lifted.

"The decision undoubtedly confronts Mr. Bush with a test of wills," said Leo W. Gerard, international president of the United Steelworkers of America, which wants the tariffs to remain in place. "Will he exercise his sovereign right as president to protect the jobs and survival of the entire American steel industry, or will he knuckle under to the threat of economic blackmail being leveled by the European Union?"

The Bush administration dismissed the WTO's appellate decision, which upheld a similar ruling by the trade group earlier this summer.

While agreeing on some of the decision's details, "we disagree with the overall appellate body findings," said Richard Mills, spokesman for U.S. Trade Representative Robert Zoellick.

In South Carolina, Bush was touting the virtues of free trade even as the WTO hammered the tariffs. Critics have said the tariffs display Bush's abandonment of free-trade principles.

White House spokesman Scott McClellan told reporters on Air Force One that "we disagree with the overall WTO report" and said the administration was studying the world body's decision.

Bush now faces a decision on whether to leave the tariffs in place. McClellan would not give a timetable on that decision.

The WTO's full body is not expected to ratify the appellate decision until the end of the month at the earliest. The EU must wait five days after the final WTO ruling is issued to impose its retaliatory sanctions.

The tariffs, from 8 percent to 30 percent on certain kinds of imported steel through March 2005, were imposed to give the battered domestic steel industry time to regroup and consolidate after 41 companies declared bankruptcy since 1997. They have endeared the GOP president to traditionally Democratic steelworkers in states such as Pennsylvania, Ohio and West Virginia. But coming on the heels of a slumping economy, the tariffs have likewise angered owners and employees of small manufacturing companies that make up part of his GOP base in Michigan, Minnesota and Wisconsin.

Collectively, all those states rank high on the list for Bush's re-election prospects and account for almost one-third of the 270 electoral votes he needs to win back the White House.

"For the sake of the U.S. manufacturing sector, it's time to end the tariffs now," said William E. Gaskin, chairman of the Consuming Industries Trade Action Coalition steel task force, which wants to eliminate the tariffs. "Manufacturers need some positive news, and a quick end to the steel tariffs will help send a message that the president supports American manufacturers, and understands the requirement that they be globally competitive."

The EU is seeking tariffs on, among other things, citrus, textile products and Harley-Davidsons manufactured in the United States.

But the chairman of the Congressional Steel Caucus called the EU's retaliation threats "groundless" and urged the Bush administration to stand firm against international pressure.

Rep. Phil English, R-Pa., also urged the White House to strike back at the EU by removing all tariff exceptions protecting imported steel from any of the 15 nations that make up the continental governing body.

"The European Union has consistently made groundless threats of retaliation in an inappropriate attempt to influence" the WTO ruling, English said.

"If the EU does decide to retaliate, the Bush administration must immediately remove the exclusions that exempt EU steel products from the safeguard tariffs," English said. "I am extremely disappointed that the WTO has decided to side with Brussels on this issue. This decision is fundamentally flawed and has called into question the WTO's credibility."

[nonliberal]

I now FAVOR steel tariffs! The Constitution is the law of the land, not a global court.

[.cnI redruM]

Ping!!!

[anniegetyourgun]

Solution: Withdraw from the WTO.

[templar]

The Constitution is the law of the land, not a global court.

The Constitution used to bethe law of the land.

I assume you missed Sandra Day O'Connor's latest? Or Anthony M. Kennedy's latest comments about conforming to enlightened opinion abroad in place of American laws?

Republicans ... gotta love 'em.

[sourcery]

[At _War_With_Liberals]

O'C has decided that it is better to be Miss popular at Dem cocktail parties than a conscientious judge. She is also trying to create some 'progressive' legacy for herself.

The DNC got to her and she could not resist the offer. Case closed.

[explodingspleen]

Since when has anyone claimed this supercedes domestic law?

What it means if the WTO finds U.S. tariffs to be illegial is simply that other countries can impose retaliatory tariffs. It is not as though the WTO has an army behind it. The reason the WTO was created was to organize mutual tariff reductions. If the U.S. wants to excercize its sovereign right to tax foreign goods, fine, but if it's not going act like a free trade nation then it has no right to any of the perks of being in the club.

I hope this pursuades President Bush to kill the steel tariffs. There is not much point to pumping money into the economy with tax cuts and then making everything made out of steel more expensive with high tariffs. But if Bush doesn't then I can hardly blame other countries for passing similar measures against the United States.

[PianoMan]

Steel tariffs - worst economic decision of the Bush presidency.

[Batrachian]

One of the problems with your thesis is that those other countries are dumping steel on our markets in an effort to destroy our steel industries. Of course, the president wasn't concerned with trade policy when he implemented those tarrifs. He was trying, uselessly, to curry favor with labor unions.

[Willie Green]

The bizarre aspect of this is that it isn't really about Euroweenie steel.
The dumping comes from nations like China, Brazil, Mexico, Japan, South Korea, Russia, etc. etc.
The Euroweenies have shackled their own production with regulatory restrictions worse than we have.

This whole charade is actually being choreographed by the global Automotive Cartel, including "The Big Three": Daimler-Chrysler, Ford and General Motors.

[hedgetrimmer]

Great suggestion. Let's do it!

[hedgetrimmer]

Maybe its time for Mrs O'connor to be a "used to be" supreme court justice. She deserves no less than impeachment for putting her agenda over the US Constitution and her judgeship.

[.cnI redruM]

The Big Three were hard core protectionists before they signed their truce with foreign automakers. I find amusing to hear them complain when they get hosed from the same water truck.

[Redwood71]

I wonder how hungrey they can get before they realize that you don't deficate where you eat?

[Willie Green]

The Big Three were hard core protectionists before they signed their truce with foreign automakers

The relationship is quite a bit more incestuous than that.
Globally, the industry is basicly composed of The Big Three, Toyota and Volkswagen.
There may be a couple others who are nominally independent, but the bulk of everybody else have been either purchased, or entangled by significant investment relationships with one of the Big Five I've named.

I have a list that I copied back in Y2K that shows all the global relationships that existed back then. It's somewhat dated, and the reference URL has expired, but I think it's still informative enough to be applicable.

It's also hellatiously lengthy.
I'll show a little mercy and spare this thread some time before I zap it with the list.

;^)

Oh, another thought about the Euroweenies: even though Euroweenie steel isn't actually central to the spat, my suspicion is that nations like France and Germany are also going along with this for much the same reasons as they opposed our intervention in Iraq. Slimey ba$tard$.

[Blackyce]

There are no constitutional issues with the WTO at all. We entered into a voluntary agreement and they are simply telling us that we said we wouldnt do something. When we violate our agreements other countries are then free to defend themselves with similar actions. There is no way at all being outside of the WTO would make the situation any more favorable.

[templar]

She deserves no less than impeachment for putting her agenda over the US Constitution and her judgeship.

Man, do I ever agree with that!

Unfortunately, the odds of that ever happening are zero with the Democrats and Republicans running everything. If even one Conress critter would just introduce articles of impeachment (even knowing they were doomed to fail) there would be some real changes in the USSC though. They's start realizing that people out in the hinterlands are starting to get really PO'd, and they'd certainly view their positions differently.

[explodingspleen]

Dumping isn't so much the problem as is the fact that our steel industry simply cannot produce as efficiently as some of their foreign competitors.

The reason the 'Euroweenies' (as you so eloquently put it, Willie Green) are upset is not because they object to a tariff on their steel as it is because Europe (which is as grossly inefficient at making steel as America) faces a flood of cheap steel from Japan and Latin America as the respective nations seek more profitable tariff-free markets.

The correct response to dumping/subsidies, at any event, is not to level a universal tariff but instead to specifically target the dumpers with high tariffs.

Really, our steel industry either needs to get with the times or simply subside into oblivion. Too much of the rest of American manufacturing (automobile industry, construction, household appliances, etc.) depends on steel for us to tolerate artificially inflated prices. How will they compete in foreign markets if they have to pay more for their raw materials than other nations?

[templar]

There is not much point to pumping money into the economy with tax cuts and then making everything made out of steel more expensive with high tariffs.

There is not much sense in pumping money into the economy with tax cuts and then sending it overseas either. Along with all the jobs it creates where it is going. Do a quick analysis of our balance of trade position and think about how many JOBS that deficit represents that are created overseas and not here. Oh, Yeah, and the taxes that those hundreds and hundreds of billions that go overseas aren't producing here either.