Posted on 11/11/2003 8:20:30 AM PST by veryone
Ineffective Steel Tariffs Now Illegal, Too
NEW YORK - In a ruling that was widely expected, the World Trade Organization held yesterday that steel tariffs imposed by the U.S. last year violated international treaties, to say nothing of the Bush Administration's free-trade rhetoric.
The ruling exposes U.S. exporters to more than $2 billion in sanctions unless the U.S. agrees to end quickly its illegal policy. If they go into effect, the penalty would be the biggest ever levied by one WTO member against another.
As is typically the case, much of the discussion of the tariff policy has been its political effect. The Bush Administration now must choose whether to respect international laws--laws the U.S. has led the way in advocating, at least as a general rule--or seeking political advantage in steel-industry states such as Pennsylvania and West Virginia.
Whatever the political gain from the steel tariffs, which went into effect in March 2002 and were challenged in the WTO court soon after, they have not blanched the woes of U.S. steel manufacturers. In September 2003, U.S. monthly steel production was 6,846 metric tons, 15% less than the 8,088 metric tons it produced in September 2002, according to the International Iron and Steel Institute. Production continued to fall despite the fact that U.S. imports were also down sharply over roughly the same period, according to the American Iron and Steel Institute.
The WTO ruling upheld an earlier ruling issued in March in response to complaints by the European Union, which, as a group, is the world's second-largest steelmaker, and by Brazil, China, Japan, Korea, New Zealand, Norway and Switzerland. (China ranks first, and its production is rising, while that of the U.S. and the E.U. is falling. World output has been rising slightly, all due to the rise in China's production.) The organization said that the U.S. policy, which increases the cost of imported steel by as much as 30%, could not be justified by the putative reason of giving the U.S. steel industry a three-year respite from international competition, perhaps noting that the decline in the U.S. steel industry is a decades-long phenomenon.
The tariffs also hurt U.S. steel users, such as homebuilders and auto companies that buy steel. The U.S. policy has been riddled with so-called exemptions to manufacturers, which are designed to minimize its effect, but which were not enough to make it legal.
In an apparent rebuke to the political nature of the decision to impose tariffs, the European Union has proposed sanctions on politically sensitive targets, such as Florida citrus products, farm equipment and cigarettes.
The ruling has been expected since the U.S. policy was announced. In August 2002, the U.S. International Trade Commission ruled against the industry in its claim that certain non-U.S. manufacturers were "dumping" steel in the U.S. But steel-industry leaders have continued to urge defiance, painting themselves as in the vanguard of the defense of U.S. industry.
"The United States should not buckle under pressure from the European Union," Daniel DiMicco, vice chairman, president and CEO of Nucor (nyse: NUE - news - people ) and chairman of AISI, said in statement last week. "The steel industry is a test case for problems facing all sectors of U.S. manufacturing. The way to send a clear message that the U.S. is truly committed to a level playing field for domestic manufacturing is to keep the president's steel tariffs intact. This is the tip of the iceberg and all of America is watching."
Thomas Usher, chairman and CEO of United States Steel (nyse: X - news - people ), added in the same statement that recent polls show overwhelming bipartisan support for keeping the steel tariffs in place for the intended three-year term. The AISI itself issued a statement accusing the European Union of "blackmail" for seeking exclusions for imports covered by the tariffs and said the law allows the U.S. a "reasonable period of time" to comply with the WTO decision.
White House spokesman Scott McClellan said the administration needed time to study the WTO decision before determining a response
Exactly, and these people in the manufacturing industry need to get the message that their outmoded jobs are just that - outmoded for this country. The labor union-style manufacturing jobs are indeed on the decline, but jobs in everything else are shooting through the roof as of the most recent quarter. And I don't care if everyone in their family has always worked in the steel mill going back to their great great great something graddaddy. My great great great something granddaddy was a blacksmith but you don't see me banging metal scraps into horseshoes over an open flame.
Stop complaining and get back to work, prole, or you won't get your bowl of rice today. You have profits to make for your masters. ;-)
One solution to the Unfair Trade issue is the Bush effort to devalue the dollar (slowly). It makes for less expensive American goods/services, more expensive foreign goods/services, and it causes the Free Traitor brigade to screech a little less obnoxiously.
I will be the first to remind you of that the next time a "Foreign Suppier" decides it will not make a critical part for one of our DOD projects, or when most Americans are working flipping burgers or at Walmart. I don't like Unions but I Despise companies that think it's ok to hire a foreigner instead of an American just because they will work for $1.00 per hour. The backlash against greedy "Free-Traitors" is just around the corner.
I'll happily recieve your reminder if you desire to make it, but since that day will never come due to the laws of economics, I am confident that I have little to fear from you.
Huh? what domestic effects are you talking about? Name one.
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