Bush to soften blow on steel tariffs

President George Bush is expected to lift steep tariffs he imposed on foreign steel 20 months ago but soften the blow on the domestic steel industry by announcing new measures to protect against unfair foreign competition, congressional and steel industry officials say.

A White House announcement is expected later today.

White House officials refused to discuss details of the president’s decision, but congressional and steel industry officials said they expected Bush to remove the tariffs in order to avoid the imposition of retaliatory tariffs on a wide range of American products.

The EU has vowed to retaliate against €1.86bn of American products by mid-December unless the United States removes the steel tariffs, which were ruled illegal by the World Trade Organisation.

The EU carefully chose its target list to cover a range of products from oranges to pyjamas that would inflict maximum political pain in key states that Bush is hoping to win in next year’s presidential race.

Bush’s original tariff decision in March 2002 unleashed a barrage of criticism from steel consuming industries that claimed the higher prices they were forced to pay cost more jobs than were saved at US steel plants.

Steel industry officials said the administration was reviewing a number of proposals to soften the blow of lifting the tariffs.

Among the proposals being considered by the administration was making permanent early reporting requirements to detect any big influx of steel into the United States.

The administration was also expected to pledge an aggressive use of US anti-dumping laws to impose tariffs on specific steel products should imports surge.

The administration package was expected to include pledges to continue pursuing global negotiations aimed at getting other countries to limit government subsidies for their domestic steel producers and to curb overcapacity in the steel industry.

Bush discussed the steel issue yesterday with Vice President Dick Cheney, Commerce Secretary Don Evans and US Trade Representative Robert Zoellick after returning from a fund-raising trip to Pittsburgh .