Did someone in Washington, DC, forget something?
Isn't a report due on the latest study of the US security effects of rising imports of oil?
There would have been a ruckus worth staying up late to watch last week if findings of the Department of Commerce's import study had found their way out of hiding at the White House. Somewhere, the report surely catalogs hypothetical remedies. And if that part had emerged in public, poor Energy Sec. Bill Richardson, meeting last Wednesday with Bostonians angry about rising prices of heating oil, might have had to deal with a question like this: "Mr. Secretary, would you comment on reports that a tariff on oil is under consideration by the Clinton-Gore administration?" What a scream!
Politics instructive
Under no circumstances, of course, would the import study have surfaced while chilly New Englanders were paying $2/gal for heating oil. And under no circumstances will this or any other administration hike tariffs on oil, now or at the bottom of the next price cycle.
It's instructive, however, to watch how politics affects events in an election year. A case in point: While a price rebound aggravated by weather raised the usual squawk on behalf of oil buyers, tariffs materialized for the steel business.
President Bill Clinton announced a new 19% tariff on the value of imported line pipe beyond 9,000 net tons from any country. The rate will drop to 15% in the second year and 11% in the third year. Clinton also announced a 10% tariff on imports of steel wire rod exceeding 1.58 million net tons. The exemption will increase and the rate decrease slightly in the second and third years.
The administration didn't call these measures countervailing or antidumping duties, the normal responses to subsidized trade. In a press statement it said only that it acted under "safeguard" provisions of trade statutes in response to an International Trade Commission finding that "increased imports were a substantial cause of serious injury or threat of serious injury to the US industry." The relief "is intended to help the steel line pipe industry adjust to import competition and return to profitability."
To that, US oil and gas producers can only respond, "It must be nice."
No argument will appear here for protectionism for any industry except in clear cases of anticompetitive behavior abroad. The political favoritism simply deserves notice from US oil producers struggling out of a market slump as brutal as steel's.
The steel moves solidify labor support for Vice-Pres. Al Gore's run for the presidency. George Becker, president of the United Steelworkers of America, called imposition of the tariffs "a major victory in our union's tireless drive to bring relief to steelworkers, steel producers, and steel communities that have been devastated by unprecedented surges in imports."
Lacking a political prize as large as the labor vote, US producers were probably lucky to score the loan guarantees that Congress enacted on their behalf last August as part of a similar initiative for-any guesses?-the steel industry. Although application procedures proved to be more trouble than the aid was worth, the gesture of concern was welcome, however late.
The need to suffer
Who knows? If ruinous oil prices had lingered into this year, the government might have implemented more-solid ways to help the producing industry endure price slumps, such as graduated tax relief. There's just no telling what producers might accomplish politically if they'd only suffer a little more.
After his Boston scolding, Richardson planned to visit governments of major oil-exporting countries, where officials know they must raise production and need only domestic political cover before acting. Then Clinton and Gore will claim a foreign relations triumph. After all, credit for popular outcomes, such as oil price relief that was going to happen anyway, is one of the privileges of incumbency. So is never having to buy steel.
