- The Washington Times - Wednesday, March 13, 2002

Last week, the administration slapped tariffs of up to 30 percent on steel imports. The move has seriously tarnished President Bush's image as a free trader and must have been painful for Trade Representative Robert Zoellick to argue publicly. What is more, it will put a hefty burden on U.S. consumers, corporations and, eventually, taxpayers. Abroad, U.S. trading partners are fuming, and many have made clear, through statements and actions, that there will be consequences to Mr. Bush's decision. Although a trade war will only hurt consumers worldwide, Mr. Bush knew he risked international retaliation.

The Europeans haven't minced their outrage. Europe's industry commissioner, Erkki Liikanen, called the tariff increase a "U.S. unilateral protectionist measure" and vowed to "protect our industry and its workers against this wholly unfair decision of the U.S." The European Union is disputing the U.S. tariff hike at the World Trade Organization (WTO). The litigation costs of this WTO case will invariably be high, and if Europe wins the case, it will have the right to slap retaliatory tariffs on U.S. exports, which would severely hurt other U.S. industries. The European Commission, meanwhile, now plans to impose tariffs on American airlines using what it calls unfair subsidies to cut fares. Although EU officials deny there is any link with the steel decision, the measure is nicely timed.

A new Russian ban on U.S. poultry was also announced at about the same time the White House raised steel tariffs, although the Russians, too, deny there is any link. The ban will have a big impact on the U.S. poultry industry, since almost half of all U.S. poultry exports, worth up to $800 million, are bought in Russia.

The administration's lopsided defense of its decision on steel tariffs seems almost juvenile. In a letter to WTO Director General Mike Moore, Ambassador Linnet Deily, deputy U.S. trade representative in Geneva, claims the U.S. tariff hike was justified by the subsidies other countries apply to their steel industries. And even though the White House didn't take these grievances to the WTO, choosing instead to increase U.S. tariffs, it has cautioned other countries not to follow its own example. Mr. Deily goes on to claim, amazingly, that if Europe is concerned about a flood of steel exports hitting its own markets as a result of the U.S. tariff hike, it should raise its own tariffs on steel. The Bush administration has so abandoned its leadership on free trade that it is now recommending that other countries erect trade barriers.

It is truly regrettable that the White House is allowing the steel industry to bring its political power to bear. At best, U.S. consumers and taxpayers will pay a cost that can only be quantified over time. At worst, U.S. trading partners will re-evaluate their commitments to America. Mr. Bush has risked all this for steel-cold political gain.

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