U.S. President George W. Bush is expected to announce this week that he will immediately lift most of the tariffs he placed on foreign steel in an effort to protect American industry, bowing to a ruling by the World Trade Organization (WTO) that his administration had violated global trading rules, say industry officials who have been in negotiations with the White House.
Mr. Bush may make the announcement after a Dec. 2 trip to Pittsburgh, PA, U.S., where the decision to accede to the trade organization ruling will be deeply unpopular among steelworkers and owners of the American steel manufacturers -- even if accompanied by an expected threat by President Bush to reimpose tariffs if there is a surge of low-cost foreign steel.
However, the White House has said President Bush may not make a decision until a deadline in the middle of December. But industry officials who have been talking to White House economic officials say his advisers have warned him that there is no way to avoid the billions of dollars in retaliatory tariffs that Europe and Japan have threatened to impose on American goods if the tariffs are not lifted.
The Europeans would use retaliatory tariffs to strike at industries in states crucial to the 2004 election.
One industry official who has been talking to the White House said he expected that President Bush would try to make the best of his defeat by arguing that the main objective of the tariffs has been achieved: the American steel industry has consolidated significantly in the past 18 months, exactly the reorganization that President Bush declared had to happen during the 3-year life of the tariffs.
Under the trade organization's rules, the tariffs on foreign steel decline every year so that the domestic steel industry would face increasing pressure to become more efficient. (Reuters)
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