- The Washington Times - Monday, November 24, 2003

The World Trade Organization will adopt a ruling against U.S. steel tariffs Dec. 1, moving up by more than a week the timeline for other countries to retaliate and adding pressure for a quick decision by the Bush administration.

U.S. voters in major industries and in electorally important states will be affected by the president’s final decision.

The WTO earlier this month ruled against the tariffs, imposed by President Bush in March 2002, but was not expected to formally adopt its findings until Dec. 10. Instead, the trade body plans to formalize the decision Monday.

That opens the way for the 15-nation European Union, Japan, China and other nations to retaliate with about $3 billion in sanctions as soon as next week.

The European Union and Norway confirmed they would slap U.S. products with tariffs five days after the WTO move, and Japan and China are preparing to follow suit.

Mr. Bush imposed the tariffs to give the domestic steel industry, beset by bankruptcies and layoffs, time to regroup. The move was also intended to shore up political support in major steel-producing states like Pennsylvania, Ohio and West Virginia — key electoral battlegrounds. Mr. Bush lost Pennsylvania but won the other two states in the 2000 election.

But in addition to damaging trade relations with steel-producing nations in Europe, Asia and South America, the tariffs alienated U.S. manufacturers that rely on raw steel to make finished products.

In Michigan, another major steel-producing state where tariffs were meant to help, small manufacturers and Detroit-based auto companies complained that higher prices hurt them. Some lawmakers, led by Republican Rep. Joe Knollenberg, urged a repeal of the tariffs.

Others in the state, like Rep. Sander M. Levin, Michigan Democrat, supported the safeguard decision.

Mr. Bush, who lost Michigan in 2000, last week in London said he would make a “timely decision” for steel; the White House has not elaborated.

The White House is listening to all parties involved but not actively pushing a compromise, said Trent Duffy, White House spokesman.

Steel industry sources have commented on compromise solutions, but officially want relief for a full three years.

The United Steelworkers of America, a union with about 120,000 members, has demanded continuation of the tariffs and promised to make the president’s decision an electoral issue.

Another consideration is foreign retaliation. The European Union’s list has electoral implications. Florida citrus, for example, is an industry that employs 90,000 people and a state where Mr. Bush very narrowly won in 2000.

“We are concerned. [EU retaliation] would essentially put us out of the market in Europe for the time being,” said Andy Lavigne, executive vice president for Florida Citrus Mutual, an industry group.

Florida sends a fraction of its orange juice to Europe but commodity prices are delicately balanced, and the lost market share could significantly lower prices paid to farmers, Mr. Lavigne said.

Other nations also are ready to retaliate.

Norway said Friday it would impose 30 percent levies on $12 million worth of American products, including steel, produce and appliances, starting Saturday unless the president repeals the steel tariffs.

Japan is prepared to impose duties on $98 million in U.S. iron, steel, clothes and other goods, effectively pricing them out of the market, as early as next month if the tariffs remain in place, according to Japanese press reports.

China also has warned that it would impose trade sanctions in response to the steel tariffs, but that move is believed to be related to a trade dispute with the United States over textiles.


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