Bush Tariff Repeal a Political Quagmire (Democrat candidates issue statements within minutes)

Associated Press ^ | Fri, Dec 05, 2003 | LARA JAKES JORDAN

[presidio9]

By scrapping steep tariffs on imported steel, President Bush puts himself in the middle of an electoral brawl between Midwest and Rust Belt states he will need to win re-election, even as he averts a global trade war targeting other political battlegrounds.

Minutes after the White House announcement Thursday to repeal the tariffs, Democratic presidential candidates lambasted Bush as shunning the U.S. steel industry by caving in to threats from global trading partners.

Even more telling, Republicans who usually ally with Bush from politically key Rust Belt states declared their dismay in what Rep. Bob Ney, R-Ohio, described as "bad news" and a "disappointing setback."

But the decision will surely endear Bush to manufacturers of automobile parts, refrigerators, door hinges and hundreds of other steel products in just-as-politically-crucial states in the Midwest that eluded him in 2000.

"There's no question it will help," said Rep. Joe Knollenberg, R-Mich., who represents 1,500 auto parts businesses in his district and fought to end the tariffs when they were imposed in March 2002. Bush lost Michigan in 2000 by a slim 217,000 votes out of more than 4.1 million cast.

Michigan, along with Minnesota and Wisconsin, account for a total of 37 of the 270 electoral votes needed to win next year's presidential election. The key steel-producing states of Pennsylvania, West Virginia and Ohio hold 46.

Facing the threat of a trade war, Bush lifted the nearly 2-year-old tariffs but promised to continue monitoring imports vigilantly to guard against a sudden flood of foreign steel entering the country.

Bush's decision — a turnabout from his own policy — came in the face of threats by the 15-nation European Union to retaliate with $2.2 billion in duties on U.S. products such as Florida oranges and pajamas made in the Carolinas.

Analysts said the list of products was carefully chosen to put pressure on Bush; sanctions could have created significant political pain for him in next year's race.

Within minutes of Bush's decision, the EU withdrew the threat, which was based on a World Trade Organization ruling that the tariffs were illegal.

The tariffs, covering a wide range of steel products, had been scheduled to remain in effect for three years, until 2005, to give U.S. steelmakers protection from foreign competition. Bush said the tariffs had been imposed to give the domestic industry critical time to modernize and to protect jobs.

"These safeguard measures have now achieved their purpose, and as a result of changed economic circumstances, it is time to lift them," the president said in a statement.

U.S. Trade Representative Robert Zoellick said that neither political calculations nor the EU threat directly contributed to Bush's order. But, Zoellick said, "the politics are part of trying to accomplish an agenda" and "this one worked out pretty darn well."

"We avoided any retaliation," he said. "We gave the industry a chance to be back on its feet. And in terms of trade negotiations, I didn't find it (had) any effect. People, of course, use excuses for whatever their position. But it didn't stop us from going ahead."

With 41 steel companies nationwide declaring bankruptcy since 1997, the tariffs are politically symbolic in states like Pennsylvania, Ohio and West Virginia, where the industry once thrived. If next year's presidential election is decided by a small margin of voters — as it was in 2000 — the tariffs may be enough to tip the balance in those swing states, said Ben Fischer, a labor relations professor at the H. John Heinz School of Public Policy at Carnegie Mellon University in Pittsburgh.

"There are a lot of people who still feel an identification to the industry," Fischer said. "I have no friends who are steelworkers, but all feel that this community somehow revolves around steel."

In 2000, Bush lost Pennsylvania by just 204,000 votes out of more than 4.7 million votes cast.

Four Democratic presidential candidates — Missouri Rep. Dick Gephardt, Connecticut Sen. Joe Lieberman, former Vermont Gov. Howard Dean (news - web sites) and retired Gen. Wesley Clark (news - web sites) — accused Bush of abandoning steel producers without offering plans to retain jobs in the industry and other manufacturing sectors.

Gephardt said that "rather than bow to the pressure of our trading partners," Bush should have negotiated further with the WTO. Dean said the tariff repeal "is just another example of this administration playing politics with peoples' lives."

But even lawmakers disappointed with the repeal said Bush still could carry the Rust Belt states if the economy continues on the upswing.

"I think there would be criticism of Mr. Bush regardless of what he decided on this," said Rep. Phil English, R-Pa., who chairs the Congressional Steel Caucus and is a Bush loyalist who pushed the administration to keep the tariffs.

But, he added, "If, at the end of the day, the steel industry is revitalized and we've bounced back, and the manufacturing sector is bouncing back, then I think Mr. Bush is going to do very well."

[The_Victor]

Attempts to appease the steel unions are pointless anyway. The poeple squealing about the tarrifs were not ever going to vote Republican anyway.

[sarasota]

W. doesn't play the game of holding his cards until he's re-elected. He's not afraid to make decisions. Imagine that.

[Prolifeconservative]

"These safeguard measures have now achieved their purpose, and as a result of changed economic circumstances, it is time to lift them," the president said in a statement"

This is a CYA statement, and there is very little truth in it.

I wish Bush would have just come out and said, "hey, my administration made a mistake imposing tariffs on foreign steel" and been done with it.

[SolidSupplySide]

Minutes after the White House announcement Thursday to repeal the tariffs, Democratic presidential candidates lambasted Bush as shunning the U.S. steel industry by caving in to threats from global trading partners.

The way I view it, Bush is working within the confines of international organizations. If Bush bucked the WTO and our trading allies, he would be acting unilaterally. We all know that acting unilaterally is a very serious charge.

[JLAGRAYFOX]

Screw the United Steel Workers. Those ingrate morons have backed Dick Gephardt! That is the thanks GW Bush gets for giving themn their tariff protection for the last 21 months. The real problem is that the cost of producing USA steel is too high! Why is it too high! The labor union has drained the juice out the goose. Now, if the steeworkers want to keep their jobs I suggest they get out of the traitor Democrat Party, who will not only destroy the steel industry with protective tariffs, but will take down the whole USA economy and join with their employers to make the steel industry as productive as possible. Eight hours work for eight hours pay would be a good beginning! You don't want to lose your wages and benefits, than get with the program and help your companies cut costs by becoming more productive! The Democrat way will kill the goose that lays the golden egg. Wake up, you labor idiots! I watched Pan Am and Eastern Airlines die and thousands become unemployed because of labot union greed and weak mangement! That is why you are not growing, you morons. And... the unions that are growing, the public service sector, is the worst bunch of lazy, useless workers in the country!

[concerned about politics]

The steel industry was in trouble. Bush bailed them out, and they're productive again. How do they thank him? They endorse a democrat who's party did nothing for them.
Along comes a possable trade war. Gee, who should Bush side with now? All the other Americans in the U.S., or a union who stabed him in the back? Gosh, decisions, decisions. This one is too hard - NOT!

[sarasota]

Well said. Just how does one attempt to bring the unions down? Wish we could create a policy to bring them to their collective knees.

[LLBeet]

Don't be fooled by the liberal media trying to exploit this issue. Actually the repeal of these steel tariffs are not as significant as they say. The reasons:

1. The Anmerican dollar has lost 20% of its value compared to the Euro. That's equivalent to a 20% tariff on imported steel from the European Union.

2. Ocean freight rates have been soaring and are now three times as high as they were a year ago.

3. China is importing all the steel that it can find on the international market. Don't expect much foreign steel to come in to the US.

In this type on environment, steel tariffs are not really needed. Our domestic steel industry should be able to compete with any country and, if it can't, it has nobody to blame except iself.

[DustyMoment]

This is just so much Dem blather. Bush trampled on their turf and, rather than engage in a trade war that would have more devastating effects on our recovering economy, he blinked.

The Dems, if they were honest, would do the same. They just aren't honest enough to admit it.

[concerned about politics]

The real problem is that the cost of producing USA steel is too high! Why is it too high! The labor union has drained the juice out the goose.

Yep, like many other big businessess. In our area, two manufacturing compainies packed up and left. The unions spent more time on the sidewalk bitching for more money than they did working. The companies said "enough" and now those greedy people have no money at all !! They got what they deserved.
Now, they're bitching at the politicians for not bringing more jobs into the area. DUH!

[Mr. Bird]

Politically speaking, PA is a Dem "must hold". Rove is certainly involved in the political calculus of policy changes, so setting aside the economic virtues of repeal, I'm sure the political impact is offset somewhere.

[Prolifeconservative]

"Our domestic steel industry should be able to compete with any country and, if it can't, it has nobody to blame except iself."

Right on!

Aren't we a champion of open markets based on free and fair trade? If so, let the chips fall where they may without tariffs. The onus is on the steel industry to figure out how to compete. They could start by looking at worker productivity. But who I am?

[presidio9]

Our domestic steel industry should be able to compete with any country and, if it can't, it has nobody to blame except iself.

One word: UNIONS.

[mountaineer]

Bill Clinton and Al Gore appeared in Weirton, W.Va., during the 1992 campaign and promised the steelworkers they would help save the industry. Once elected, Clinton not only didn't do a thing, he refused even to meet with steel industry and labor officials. During the eight years of his presidency, fellow Democrats did nothing (that includes the estimable Sens. Byrd and Rockefeller). Only after Bush was elected did those folks get the opportunity to present their case to the administration. Nevertheless, the unions - and the Dem politicians - now are squawking that they'll remember how Bush didn't keep his promise, come November 2004.

[Montfort]

If you need someone to bring folks to their knees, you need Bill Clinton.

[sarasota]

LOL!

[Hermann the Cherusker]

This is a CYA statement, and there is very little truth in it.

Did you miss the US Steel absorbition of National Steel, the creation of ISG from the detritus of LTV, the ISG absorbtion of Bethlehem Steel, the swap of assets between US Steel and ISG, the restructuring of Wierton Steel, the sale of US Steel's vertical integration assets to raise cash, etc.???

Things are a lot different now than two years ago, and all thanks to Bush. We now have two very large and very strong steel companies (US Steel and ISG) with significantly restructured finances who are finally as large and capable as other worldclass companies.

[Prolifeconservative]

"Did you miss the US Steel absorbition of National Steel, the creation of ISG from the detritus of LTV, the ISG absorbtion of Bethlehem Steel, the swap of assets between US Steel and ISG, the restructuring of Wierton Steel, the sale of US Steel's vertical integration assets to raise cash, etc.???"

And all that happened in the environment of "free/fair trade" or did our steel industry strenghten itself by the U.S crippling our World competitors with tariffs. How would they fair if there were retaliatory tariffs? Now let's see how this industry fairs from this point forward on a level playing field.

Anyway, my initial point about Bush's decision....it has nothing to do with the Steel industry's renewed strength, rather it has everything to do with a strategic play by the EU threatening to impose tariffs on 2.2 billion of U.S. goods. And it worked wonderfully.

Bush's statement looks Karl Rove-like, but that's just me.

Oh well, in the grand scheme of things, this really is nothing to get excited about one way or another.

[Hermann the Cherusker]

How would they fair if there were retaliatory tariffs?

Since they don't export much, I'm sure it wouldn't make much difference. Surely you know very little about this industry.

Now let's see how this industry fairs from this point forward on a level playing field.

How is it a level playing field when foreign governments pay the pension and health benefits our companies must pay out of pocket?