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. Last Updated: 07/27/2016

Bush Advisers Mull Steel Tariffs

WASHINGTON -- Treasury Secretary John Snow, Commerce Secretary Donald Evans and other economic advisers want U.S. President George W. Bush to roll back tariffs he imposed on $3 billion in steel imports, sources said.

Bush's economic team will argue that the tariffs ended up hurting U.S. manufacturers more than it helped steelmakers such as U.S. Steel Corp., said administration officials and outside advisers who requested anonymity. They said it has not been decided whether the team will recommend that Bush eliminate or just trim the tariffs, which are now as high as 24 percent.

"They understand they've done more political and economic harm than good," said Stephen Moore, president of the Washington-based Club for Growth, the second-biggest funding source for Republicans after the party itself. "It's really damaged the administration's free-trade credentials."

Bush moves closer to the November 2004 election with 2.6 million lost manufacturing jobs on his watch. Opponents of the tariffs blame higher steel prices that resulted from the duties for keeping 200,000 people out of work last year.

The president's decision will ultimately depend on whether he accepts that analysis or one by steel producers that the tariffs have saved more than 10,000 jobs, including ones in key electoral states such as Ohio, West Virginia, Pennsylvania and Michigan, advocates both for and against the tariffs say.

Bush eked out victories in West Virginia and Ohio in 2000 and lost the other two states. Then-Vice President Al Gore, Bush's Democratic opponent, received less than 51.5 percent of the votes in Pennsylvania and Michigan.

Administration officials say Bush has not decided whether to lift the tariffs and is waiting for a report due Sept. 19 from the International Trade Commission, an independent U.S. government agency.

"We look forward to looking at the ITC report when it comes out," said White House spokesman Scott McClellan, adding that he expects no decisions about the tariffs before then.

It is "too early" to comment on the economy team's stance toward the tariffs while different government agencies are still discussing the issue, said John Taylor, the Treasury Department's undersecretary for international affairs, in an interview with Bloomberg News late last week.

"The steel tariffs have different kind of effects which are being assessed and estimated now," Taylor said. "There is a conversation going on about how to get to the heart of those estimates and make a policy decision."

Snow, Evans, White House economic policy chief Stephen Friedman and other advisers want the tariffs removed or reduced in part because they are concerned the European Union may impose sanctions on the United States after a World Trade Organization appeals panel ruling in November, sources have said.

The EU has drawn up a list of $2.2 billion in goods that will be targeted with tariffs, ranging from fruit juice to T-shirts. The United States just last week submitted its appeal to the WTO of a ruling against the tariffs, which originally were set as high as 30 percent last March.

"They are concerned with the threat of retaliation," Thomas Danjczek, president of the Steel Manufacturers Association, which represents Nucor Corp., the largest U.S. maker of steel from scrap, and other mini-mills.

Danjczek said he predicts Bush will keep the program in place until it expires in March 2005.

"This president has a history of not going back on his decisions," he said.