White House mulls ways to help steel industry if tariffs removed
Bush decision expected Thursday
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Indiana members of the United Steelworkers of America gather to try to persuade Bush not to lift tariffs.
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CNN's John King on President Bush being advised to head off a global trade war by rolling back steel tariffs.
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SPECIAL REPORT
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WASHINGTON (AP) -- The administration is searching for ways to soften the impact on the domestic steel industry if President Bush withdraws steep tariffs on imports as expected.
The proposals under consideration, industry officials say, include early reporting requirements to detect possible surges of steel into the United States.
The administration was expected to announce Bush's decision around midday on Thursday, barring last-minute snags, one administration official said on condition of anonymity.
Bush held a late-night meeting in the Oval Office with Vice President Dick Cheney, Commerce Secretary Don Evans and U.S. Trade Representative Robert Zoellick after returning Tuesday from a fund-raising trip to Pittsburgh where he encountered last-minute lobbying from the steel industry.
White House advisers are urging Bush to abandon the tariffs he imposed on various types of foreign steel in March 2002 in an effort to protect the U.S. industry, reeling from bankruptcies and the loss of thousands of jobs, from foreign imports for three years.
The World Trade Organization has ruled the tariffs violate global trade rules, and the 15-nation European Union and Japan are vowing to impose retaliatory tariffs on U.S. products when the ruling becomes final later this month.
The EU hit list targets $2.2 billion of products from orange juice to pajamas from politically important states such as Florida, California and the Carolinas.
Administration officials said Bush has yet to make a final decision on lifting the tariffs. But industry officials in contact with the administration said they expected the president to remove the tariffs to avoid foreign retaliation.
The industry officials, who spoke on condition of anonymity, said that the administration was looking at many ways to provide help to domestic steel producers once the tariffs were removed.
One of the proposals would keep in place an additional monitoring program on steel imports that went into effect when Bush first imposed the tariffs in 2002.
That program requires importers of foreign steel to apply for import licenses for the foreign steel, giving the government a quicker way to detect possible import surges. Under previous procedures, information on steel imports data was collected only after the steel products arrived at U.S. ports.
International talks
The steel officials said the administration likely would pledge to continue international talks for reducing excess global steel capacity and reining in subsidies that foreign governments provide for their domestic steel companies.
Those talks were begun after the steel tariffs were imposed in 2002, but officials have made little headway and trade experts said the chances for any breakthroughs remained slight.
"The reason the talks are not going anywhere is that the United States is not bringing anything to the negotiating table," said Gary Hufbauer, trade expert at the Institute for International Economics, a Washington think tank. "The fact that the United States is withdrawing the steel tariffs isn't worth anything because they have already been ruled illegal by the WTO."
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President Bush is applauded as he is introduced at a Bush-Cheney 2004 fund-raiser in Pittsburgh on Tuesday -- no mention of the tariffs issue.
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Brink Lindsey, a trade expert at the Cato Institute, another Washington research group, said the U.S. package was shaping up to basically be a fig leaf to provide cover for the administration against charges that it is going back on its pledges to help the domestic industry.
"The existence or non-existence of an import monitoring system is not going to make that much difference," he said. "And the pledge on more international talks is lip service as well. The talks haven't gone very far and they are not likely to go very far."
The administration initially imposed the tariffs in hopes of winning votes in key steel states such as Pennsylvania, West Virginia and Ohio, but it faced a barrage of complaints from steel-consuming industries, who claimed the higher prices they had to pay were costing more jobs at U.S. steel companies than were being saved.
But domestic steel supporters said the president had an obligation to fulfill promises he made during the 2000 campaign.
"The White House knows the U.S. industry still confronts serious issues including massive global over-capacity and a whole variety of foreign subsidies that encourage this over-capacity," said Alan Wolff, a Washington attorney representing U.S. steel companies.
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