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The Honolulu Advertiser
Posted on: Monday, December 8, 2003

Bush: a free trader once again, for now

The issue of an administration's willingness to place political expedient before the nation's best interest, narrowly defined, came into sharp focus last year when President Bush imposed illegal tariffs on imported steel.

A host of inefficient steel producers in the U.S. "rust belt" had been closing their doors in the face of cheaper imported steel. This was not a question of cheaper labor — Japanese steel workers are paid more than their Yankee counterparts — but newer, more efficient production facilities overseas.

So Bush, in imposing protective steel tariffs, was subsidizing American makers' inefficiency. He was also hurting American industries that rely on inexpensive steel, like automobile and appliance makers, and American consumers in general.

But former President Clinton had angered steel workers by his adherence to free-trading principles, and Bush's willingness to exploit that as a political weakness explains why Al Gore unexpectedly failed to carry West Virginia, a steel state, in the 2000 election.

Now, 16 months early, Bush has unexpectedly lifted his steel tariffs. No one is buying his explanation — least of all angry executives and union officials in the steel industry — that the tariffs had already "achieved their purpose" in making American manufacturers more competitive.

So which expedients was Bush bowing to in ending the tariffs?

• Could it have been the risk of losing the political support of steel-consuming states — such as Michigan, Ohio and Kentucky, with their auto-making plants — that led Bush to conclude that protectionism in the case of steel had outlived its usefulness?

• Could it have been the $2.2 billion in retaliatory sanctions threatened by the European Union and approved by the World Trade Organization, which had found Bush's steel tariffs illegal?

The Europeans shrewdly indicated that they would aim their punitive tariffs at exports coming from American states crucial to Bush's re-election, such as Florida citrus, Carolina textiles and motorcycles from Wisconsin.

• Or did it hit home in the White House that the big danger when the U.S. flouts international trade rules isn't retaliation, but emulation: If we don't honor trade agreements, who will?