Bush aids steel industry

by Tom Raum
The Associated Press

WASHINGTON – President Bush slapped hefty tariffs of up to 30 percent on a range of steel imports yesterday, suggesting it would help ailing U.S. steelmakers get back on their feet. The action could raise prices on products including cars and appliances and drew sharp criticism from U.S. trading partners.

Bush stopped short of giving the industry the 40 percent across-the-board tariffs it sought and declined to support an industry-proposed $10 billion bailout of pension and health care benefits for retired steelworkers whose companies have gone bankrupt.

Still, both the steel industry and its workers generally applauded his three-year package.

"It's some light at the end of a very dark tunnel," said Leo Gerard, president of the United Steelworkers of America.

Acting on long-running complaints from domestic steel producers and steelworkers' unions, Bush imposed a three-year plan of tariffs of 8 percent to 30 percent on imported steel, depending upon the type.

He said his decision would "help give America's steel industry and its workers the chance to adapt to the large influx of foreign steel."

Foreign steel exporters immediately protested.

"The U.S. decision to go down the route of protectionism is a major setback for the world trading system," European Union Trade Commissioner Pascal Lamy said.

He told reporters the EU would challenge the decision before the World Trade Organization.

Asked about the prospects of trade wars because of his actions, Bush told reporters that international trade rules permit such temporary tariffs to protect battered industries.

"We're a free trading nation, and in order to remain a free trading nation we must enforce law. That's exactly what I did," he said. Bush said steel imports "were severely affecting our industry, an important industry."

Steel prices are at a 20-year low, and more than 30 U.S. steel mills have filed for bankruptcy protection in the past four years.

The action inevitably will bring some price increases to U.S. consumers, even its defenders agreed. But the administration said it could not calculate by how much, noting that steel prices were just beginning to nudge upward after a global downturn.

"Guessing prices is not my business," U.S. Trade Representative Robert Zoellick told reporters at the White House.

- Associated Press writer Claude R. Marx contributed to this report.