The official word is that a threatened trade war had nothing to do with the decision by US President George W. Bush to end steel tariffs 16 months ahead of schedule.
"These safeguard measures have now achieved their purpose," Bush said in a statement. "And as a result of changed economic circumstances, it is time to lift them."
US Trade Representative Robert Zoellick said in a Washington press briefing that the decision to remove tariffs as high as 30% from selected categories of steel was made independently of European threats of retaliation.
Right. Does anyone believe that if it had decided tariffs hadn't "achieved their purpose," the administration, less than a month away from an election year, would have jeopardized economic recovery with maverick trade policy?
Well, nobody ever expects the official view to take in everything.
What's important is that prospective combatants have called off their trade war.
The World Trade Organization had ruled the temporary steel safeguards illegal in a decision upheld on appeal. Maintaining the tariffs would have discredited the group, undermined international trade agreements, and provoked retaliation.
The European Union was ready to impose $2.2 billion worth of sanctions on US products selected to impose maximum political damage on a US president unwilling to look beyond steel-producing states. Japan planned sanctions worth $100 million/year.
In the US, according to some analysts, the tariffs were hurting steel consumers more than they were helping steel producers.
For Bush, political metrics of the decision couldn't have been clearer.
Hanging tough with tariffs would have played well in Ohio, Pennsylvania, and West Virginia. With steel unions already supporting Democratic challengers, though, the prize for Bush was limited.
And it would have come at the cost of higher-than-necessary steel prices throughout the US, retaliation from Europe and Asia, and general horror over the implicit renunciation of trade.
The giant sucking sound then wouldn't have been jobs leaving the US, as opponents of trade agreements say; it would have been life gushing from economic recovery and Bush's reelection prospects.
For himself and for the country, Bush made the right decision.
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