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White House May be Near Decision on Steel Tariffs - 2003-12-01

There are signs the White House is nearing an announcement on the fate of U.S. tariffs on imported steel. There are reports the tariffs will be lifted. But White House officials say no decision has been made.

The president knows he has little time to act on this politically sensitive issue.

The tariffs were recently declared illegal by the World Trade Organization. And the European Union and Japan have vowed to retaliate if the United States does not respond by December 15. They warn of a potential trade war and have threatened sanctions on billions of dollars in U.S. exports, from orange juice to farm machinery.

It's a dilemma for the White House as the tariffs remain popular in some states that could play a major role in next year's U.S. presidential election, such as Pennsylvania, Ohio and West Virginia. Pressure from companies and unions in these manufacturing states helped persuade President Bush to put the tariffs in place back in March 2002.

The president told foreign critics of the move that the U.S. steel industry was facing unfair international competition. Mr. Bush said the tariffs would remain for three years to give manufacturers time to restructure and retool.

In public, White House officials are only saying that the matter remains under review. But there are indications a decision to lift the sanctions more than a year early is all but finalized.

One came just last month when U.S. Special Trade Representative Robert Zoellick discussed the issue with reporters. He said the tariffs have already helped the domestic steel industry rebound.

That is the argument likely to be put forward in the days ahead by the president, as he praises overall improvement in the economy. On Tuesday, he will attend a political event in Pittsburgh, Pennsylvania, the home of U.S. Steel Corporation, the nation's largest steel producer. The president will have a chance to meet with some U.S. Steel executives at the event, and is expected to formally announce his tariff decision later in the week.