Steel Tariffs Reported On Way Out

President Bush is likely to avert a trade war by lifting the tariffs he imposed on imported steel in March of 2002. Bush originally established the duties to prevent the loss of steelworkers' jobs. However, keeping the tariffs would likely damage the economy far more by sparking a trade war with the European Union and Japan, both of whom threatened to retaliate by putting $2.3 billion worth of duties on American goods. Their position was bolstered by a ruling from the World Trade Organization that the US tariffs are illegal under international treaties. Many Americans also back the removal of the tariffs, since the duties benefited domestic steel at the expense of other companies that use the product. One analyst pointed out that the broader problem is overcapacity in other country's steel-making capabilities. "The Europeans are trying to make sure that overcapacity doesn't end up in Europe," he said, adding that cheap imports from China are the greater threat to steel markets. - YaleGlobal