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US Steel Tariffs To Last Three Years - 2002-03-05

President Bush is slapping hefty temporary tariffs on certain types of imported steel. Even before it was formally announced, his effort to help the ailing U.S. steel industry came under sharp criticism abroad.

President Bush says he remains committed to free trade. But he says he will take action under U.S. law to make sure America's industries and workers compete on a level playing field.

His administration spent months looking for a way to help U.S. steel makers cope with an influx of cheap foreign products. The result is a compromise less than the domestic industry asked for, but enough to send a strong message overseas.

The president is imposing tariffs of 8 to 30 percent for three years on various types of steel. Among the steel exporters hardest hit are Japan, China, South Korea, Brazil, Russia and Ukraine.

Steel from Mexico, Canada, Jordan and Israel is exempt because they have free trade agreements with the United States. So too is steel from developing countries that are minor exporters, such as Thailand.

The president's top trade negotiator, Robert Zoellick, defends the approach. He says the World Trade Organization permits temporary safeguards to help ailing industries.

Mr. Zoellick went on to say, "The president is committed to using U.S. laws and the international trade rules to the fullest extent possible to help American industries under stress to make sure that they have the opportunity to restructure and compete."

Mr. Zoellick says the tariff-and-quota plan is flexible, and President Bush can change it if the financial crisis in domestic steel improves or worsens over time. He noted this temporary solution should enable the American steel industry to survive.

"The president has listened to the frustrations and anxieties of steelworkers and their families. He is offering help," said Mr. Zoellick. "Now, it is the responsibility of the steel industry, owners, management, workers and communities to use this breathing space to construct a new future."

American steel producers say they can accept the president's plan, even though it falls far short of the 40 percent across-the-board tariff they requested. But the response from overseas has been swift and negative.

The European Union has announced it will immediately file a complaint in Geneva with the WTO. And Moscow has let Washington know punitive tariffs on steel could harm Russian-American relations.

The Bush White House leaves no doubt it is willing to take on the legal challenge, while working with other countries to correct problems in the global steel market. The tariff-and-quota plan goes into effect on March 20.