Steel Tariffs Seem to Have Backfired on Bush*

[kskiska]

Move to Aid Mills, Gain Votes in 2 States Is Called Political and Economic Mistake

Friday, September 19, 2003; Page A01

In a decision largely driven by his political advisers, President Bush set aside his free-trade principles last year and imposed heavy tariffs on imported steel to help out struggling mills in Pennsylvania and West Virginia, two states crucial for his reelection.

Eighteen months later, key administration officials have concluded that Bush's order has turned into a debacle. Some economists say the tariffs may have cost more jobs than they saved, by driving up costs for automakers and other steel users. Politically, the strategy failed to produce union endorsements and appears to have hurt Bush with workers in Michigan and Tennessee -- also states at the heart of his 2004 strategy.

"They tried to play politics, and it looked like it was working for awhile," said Bruce Bartlett, a conservative economist with ties to the administration. "But now it's fallen apart."

The issue is being brought to a boil by the scheduled release today of voluminous progress reports by the U.S. International Trade Commission. The ITC's mid-session assessment of the three-year tariff program's impact will examine not only the tariffs' effects on the steel industry but also on the hard-pressed manufacturers that shape steel into products.

more…
http://www.washingtonpost.com/wp-dyn/articles/A31768-2003Sep18.html

[joeybee12]

1. Hooray!

This is what happens when you don't have principles!

[aquart]

2. Does this mean Karl Rove is NOT a genius?

Just checking.

[jamesinca]

3. Here is part of an article discussing this issue

US and Europe on brink of trade war

WTO says Bush's steel tariffs break rules · Brussels threatens to retaliate unless Washington backs down

Andrew Osborn in Brussels and Larry Elliott
Saturday July 12, 2003
1. The Guardian

The European Union and the United States were teetering on the brink of a transatlantic trade war last night after Brussels threatened a $2.2bn package of sanctions unless Washington scrapped steel tariffs ruled illegal by the World Trade Organisation yesterday.
Brussels claimed victory in its fight to force President George Bush to drop measures aimed at shoring up his political support in America's industrial heartlands, but the US said it would appeal against the decision.

<SNIP>

Yesterday's ruling comes as EU and US negotiators are attempting to settle their differences in the global trade liberalisation talks.
A WTO disputes panel said American import tariffs of up to 30% on foreign steel could not be justified under global trade rules and that they should be abandoned as soon as possible.

Within minutes, the European commission said it would seek to hit pre-selected US products with retaliatory tariffs worth up to $2.2bn (£1.3bn) a year unless Washington dismantled its offending steel tariffs within five days.

"If and when the US does not comply with this ruling, the EU will impose counter measures," said Arancha Gonzalez, a spokeswoman for EU trade commissioner Pascal Lamy. She said the sanctions, if used, would hit US steel products, textiles and fruit and vegetables.
"We would like to urge the United States to look at the wider picture - all the world's steel exporters are telling them to remove these tariffs. This is not just a partial victory - it is a full victory. The US has been caught red-handed."

EDITED BY ADMIN: COPYRIGHT

[Old and In the Way]

4. It's making imported stamped parts a lot more attractive.

Used to be that an automated stamping facility here was quite competitive when you dialed in the freight costs to ship components to the US. Tarriffs now make the steel more expensive and a significant part of the advantage is negated...

[T_i_B]

5. It was always a stupid policy

Sooner those tariffs get repealed the better.

[NewYorkerfromMass]

8. Yep. Manufacturers here (what's left of them)

need to buy the cheapest steel they can get. Regardless of whether it comes from China or Europe or here.

[dArKeR]

6. Surely no one believes Junior could even remotely comprehend the

'decisions he makes.' Everyone knows Junior is told what to do and he does it without any comprehension to what he's actually doing.

Is Junior Ahno 2 or is Ahno Junior 2?

[priller]

7. As John DiIulio said:

There is no policy apparatus at the WH these days. He said, "What you’ve got is everything, and I mean everything, being run by the political arm." Rove may be a genius at politics, but he's an idiot when it comes to policies. All their policy decisions, made for political expediency, are coming back to bite them.

[Paschall]

9. And Shrub said

It would be much easier to be a dictator.

Who cares what you think? (still quoting Shrub)

[VolcanoJen]

10. Kick!

:dem: