Bush Weighing Steel Industry Protection ; Steelworkers Rally Today for High Tariffs on Cheap Imports

Article excerpt

When George W. Bush set out to win West Virginia during the 2000 campaign, he carefully courted two groups in particular: coal miners and steelworkers.

Today, thousands of those steelworkers will descend on Washington to demand that the president keep what they see as his promise to save their industry.

At issue is a looming March 6 deadline for President Bush to decide whether to impose high tariffs on cheap imported steel. Industry leaders claim that unfair trade practices by other countries have led to the bankruptcies of more than 30 US steel companies in the past four years.

DESPITE his free-trade beliefs, Mr. Bush last summer signaled his willingness to help the industry, ordering the International Trade Commission (ITC) to investigate the situation.

But since then, Bush has been facing powerful pressure from steel users in states such as Michigan, who say tariffs would cost more jobs in their industries than they'd save overall. Likewise, foreign allies such as Europe - on whom the president is relying for support in the war on terror - strongly oppose tariffs.

Still, thousands of angry steelworkers in swing states such as West Virginia, Ohio, and Pennsylvania could make things politically uncomfortable for Bush in 2004. As a result, many analysts are predicting that the president may try to compromise by imposing some sort of small tariff or quota system - a result likely to leave both sides dissatisfied.

"It's going to make everybody angry," says Dan Ikenson, an analyst at the Cato Institute. "The steel industry will be very upset that they're not getting the protection they claim they need to revitalize.... At the same time, it's still some sort of protectionism that's going to infuriate our European trade partners."

Few disagree that the old-lineUS steel industry is facing an unprecedented crisis. As a result of the recent wave of bankruptcies, there are fewer than 170,000 Americans working as steelworkers today - less than two-thirds of those working in the field in 1974.

THE industry, dominant during the first half of the 20th century, has been in decline since the 1960s, as other countries rebuilt their steel mills in the wake of World War II. But industry leaders trace the recent acceleration of problems to the Asian financial crisis of 1997-98, when the US saw a huge spike in cheap imports. …