[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 4 December, 2003, 17:52 GMT
Bush's steel high-wire act
By David Bamford
BBC correspondent in Washington DC

Steel worker

The White House's decision to lift tariffs on steel imports was a move demanded by the World Trade Organisation but resisted until now in an effort to protect the US steel-making industry.

President Bush's has had to try to soften the blow for steel workers and companies, whose influence is strong in several key electoral states.

Earlier this week Mr Bush visited Pittsburgh, campaigning for election funds - his host was the chairman of US Steel - but in his speeches not a word was said about plans to end tariffs on foreign steel imports.

The steelworkers who just two years ago were praising him for imposing them to protect their jobs this time had a different refrain.

"Don't cave in, don't cave in," protesters chanted.

Outraged

But President Bush has been squeezed from several different directions into ending the tariffs.

For a start the World Trade Organisation ruled the tariffs to be illegal.

Mr Bush might have been able to live with that if things had not gone further, but the Europeans, President Bush's most important allies, who have been hit hard by the protectionist measures, set a mid-December deadline for the US to end the tariffs or face retaliatory trade sanctions that will cost the Americans more than $2bn.

American steel workers such as engineer John Heskew were outraged.

There have been any number of studies that show that the costs of protectionism far outweigh the protective benefit
Charlene Barshefsky, former US trade representative
"They talk about free trade, but it is not free trade. We are the only consuming nation left in the world and everybody is trying to dump all their products on us, but they won't let us take our products and sell them over there in their country.

"Is it too expensive? No, it is very cheap now. We are losing $10-15 a tonne every time we produce. It can't be too expensive."

That sentiment was expressed by the management too. Jim Bradley, President of Wheeling-Pittsburgh Steel Corporation insisted this was unfair.

"You cannot allow unfair trade to continue. And that is the differentiation. We are not talking about free trade. We are not talking about protectionism, we are talking about unfair trade."

Softening the blow

But it is not just foreigners who have been calling for a repeal of the measures. American companies that need cheap steel such as the car makers have seen rising steel costs push up the price of their products and cause unemployment.

He is promising to be tough on anything that smacks of illegal dumping of steel by the foreign producers
Charlene Barshefsky, US trade representative under the Clinton administration, says the dilemma that the Bush administration got itself into was predictable.

"The auto industry in Michigan is very against the steel tariffs. The price of steel rises quite considerably, in addition, of course, consumers lose.

"There have been any one of a number of studies that show that the costs of protectionism far outweigh the protective benefit of those measures."

Now, President Bush's main challenge is to try to soften the blow as best he can for the steelworkers on whose votes he will be counting next November.

He is promising to be tough on anything that smacks of illegal dumping of steel by the foreign producers and says he will keep a steel import licensing and monitoring system in place to help trade officials respond to unexpected import surges.


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific