WTO Rules US Steel Tariffs Illegal...Again

by Ulrika Lomas, for LawAndTax-News.com, Brussels

12 November 2003

The World Trade Organisation (WTO) on Monday ruled against the United States for the last time with regard to the Bush administration's decision to impose tariffs of up to 30% on steel imports in order to protect the US steel industry.

The multilateral body ruled in March that the move was in contravention of WTO rules, and the dismissal this week of the US appeal of that decision marks its final ruling in the matter. This opens the way for the European Union and other aggrieved steel producing regions to impose retaliatory tariffs of their own on US goods, as planned.

According to a Wall Street Journal report, the White House's attitude following the WTO decision was initially defiant. Spokesman, Scott McClellan told the business daily that:

"Our response is that the steel safeguards...were put in place to give our domestic industry an opportunity to restructure and consolidate and become stronger and more competitive." He went on to add that the tariffs were "fully consistent with WTO rules".

However, there is said to be division within the administration, with Treasury Secretary John Snow and Commerce Secretary Donald Evans reportedly in favour of scrapping the levies now that a degree of restructuring has taken place within the steel industry.

It appears clear that whatever President Bush's final decision, it is likely to have far-reaching consequences, both economically and politically. According to the WSJ, a poll commissioned by the steel industry in October found that in Michigan, Ohio, Pennsylvania and West Virginia, 69% of voters favoured keeping the tariffs in place for the full three years.

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