U.S. President Bush scrapped the controversial steel tariffs 16 months ahead of schedule, averting a trade war with Europe, but risking a political backlash in next year's election.
"These safeguard measures have now achieved their purpose, and as a result of changed economic circumstances, it is time to lift them," President Bush said in a statement read by his spokesman.
The President offered little to cushion the blow to U.S. steel makers, but said he would keep in place a system to license and track steel imports "so that my administration can quickly respond to future import surges that could unfairly damage the industry."
The tariffs, which were imposed in March 2002, will officially end at midnight on Dec. 5.
The decision will disappoint struggling U.S. steel makers and the United Steelworkers of America, a union representing nearly 1 million active and retired steelworkers. The union accused President Bush of abandoning the industry's workers and retirees, and said it would appeal to members of Congress for protection.
President Bush's reversal on the tariffs comes less than a month after the World Trade Organization's highest court ruled that the tariffs violated global trade laws, and just before the European Union (EU) planned to launch sanctions against U.S. $2.2 billion in U.S. goods, including politically sensitive products like citrus from Florida and textiles from the Carolinas.
The EU immediately announced that it was suspending retaliatory sanctions and its trade commissioner, Pascal Lamy, said the EU would remove its own safeguard measures to block an influx of steel from third countries.
The major policy reversal on steel tariffs could spark a backlash against Bush in the battleground steel-producing states of Ohio, Pennsylvania, and West Virginia, U.S. in his re-election bid next year. (Reuters)
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