- The Washington Times - Wednesday, March 6, 2002

President Bush yesterday levied heavy tariffs on imported steel, drawing sharp criticism from world leaders and raising the ire of some congressional Republicans, who said the move hurts American consumers.
Attempting to find middle ground on the contentious issue, Mr. Bush announced tariffs on 10 types of steel ranging from 8 percent to 30 percent. While administration officials said the tariffs' effects are unknown, business leaders said the move will lead to higher prices for American consumers.
Mr. Bush's decision yesterday also caused divisions within the Democratic leadership. House Minority Leader Richard A. Gephardt, Missouri Democrat, charged that the president's move did not go far enough to help the industry and steelworker unions. "The situation remains dire," he said.
But Senate Majority Leader Tom Daschle, South Dakota Democrat, said it was a good decision that balances the concerns of competing interests.
The president said imposing tariffs was the only way to protect slumping U.S. companies from unfair trade practices of some countries that have dumped cheap steel into the U.S. market for the past decade.
"An integral part of our commitment to free trade is our commitment to enforcing trade laws to make sure that America's industries and workers compete on a level playing field," Mr. Bush said. "Free trade should not mean lax enforcement."
U.S. Trade Representative Robert B. Zoellick would not speculate on how much the tariffs will raise prices on items ranging from refrigerators to automobiles.
Mr. Zoellick said imposing tariffs which will last for three years but can be adjusted by the president was the only viable option to save the steel industry.
He said the tariffs were a response to decades of government subsidies in other countries and will allow the U.S. steel industry some "breathing room" to restructure.
But some trade industry officials said tariffs are not the answer.
"We've been down this road before and it makes no sense to impose protectionist tariffs when steel imports are declining, the U.S. manufacturing sector has been in a deep recession for 18 months and the U.S. steel producers are raising prices," said Calman Cohen, spokesman for the Emergency Committee for American Trade, a coalition of manufacturing and merchandising executives.
"You will find that jobs will migrate to places where steel is lower in cost. You have a cost on the American economy a tax, so to speak that would not be borne by manufacturers overseas. That will mean U.S. plants will be closed," he said.
Steel industry officials, however, praised the decision. "This president is a leader who keeps his word," said Dan DiMicco, CEO of Nucor Corporation, the nation's largest steel producer. "He has acted to correct the injustices perpetrated on this industry, our workers and our communities."
On Capitol Hill, some Republicans criticized the president's decision to impose tariffs.
"The number of workers in industries that consume steel in the United States far outweighs the number of workers within the steel industry," said Sen. Charles E. Grassley, Iowa Republican.
The decision was also criticized by some foreign governments. While the tariffs exempt countries that have free-trade agreements with the United States such as Canada, Mexico, Israel and Jordan, many nations, including Japan, Brazil, South Korea, Taiwan, Russia, Germany, Turkey, France, China, Australia and the Netherlands, will be hit hard.
The head of the European Union told Mr. Bush that Europe will "have little choice" but to retaliate against the curbs that the administration imposed yesterday on steel imports from around the world.
Romano Prodi, the former Italian prime minister who is the EU's chief, wrote Mr. Bush in a letter that the two sides are facing a "major trade conflict" as a result of the American action.

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