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US Steel Executives Warn Bush Not To Repeal Banned Steel Tariffs

by Mike Godfrey,, Washington

11 November 2003

The World Trade Organization (WTO) ruled on Monday against a US appeal seeking to overturn its previous ruling on President Bush's tariffs on imported steel, opening the possibility that the EU, Japan and other steel exporters can apply retaliatory tariffs.

The EU immediately reiterated its threat to apply duties of as much as 30% within a month on more than $2 billion worth of US exports including clothing and orange juice.

US steel industry leaders had warned President Bush on Friday he would pay a heavy political price if he gives in to international pressure to repeal the tariffs.
"I just think it would be a very terrible political mistake," Tom Usher, chief executive of the United States Steel Corp., told reporters. But Leo Gerard, president of United Steelworkers Union said he could not pledge steelworkers would actually vote for Bush even if he keeps the tariffs. The union has already endorsed Rep. Richard Gephardt, a Missouri Democrat, as its candidate for president.

Bush imposed the tariffs in March 2002 to give the US steel industry a "temporary breathing space", but international reaction was highly negative, and tariffs on many of the items affected were reduced or eliminated after a series of appeals from exporting countries.

The administration responded defiantly to the WTO ruling. White House spokesman Scott McClellan said: "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." Treasury Secretary John Snow and Commerce Secretary Donald Evans are said to favor scrapping the tariffs.

EU Trade Commissioner Pascal Lamy said yesterday that the US no longer had reason to keep the steel tariffs in place. Restructuring of the steel indutsry had largely has been completed, Mr. Lamy said. "Serious restructuring in the U.S. steel industry has taken place; real negotiations have taken place with unions," he said. "We are at a stage now where removing safeguards will accelerate the process."

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