Bush rejects trade protection for steel industry

Bush rejects trade protection for steel industry    President Bush declined Friday to follow the recommendations of the U.S. International Trade Commission to impose quotas or duties to stem the rising tide of steel imports from China.
   Bush said that taking action against Chinese steel imports would not help domestic industry because other countries would step in to fill the void, and that U.S. consumers would be hurt by raising the cost of steel.
   “I have determined that providing import relief for the U.S. steel pipe industry is not in the national economic interest of the United States. In particular, I find that the import relief would have an adverse impact on the United States economy clearly greater than the benefits of such action,” Bush said in a statement.
   Seven domestic manufacturers and the United Steelworkers of America petitioned the government in August for relief, saying Chinese imports had swelled so fast that they were harming the market for steel used in plumbing, air conditioning and heating systems, fencing and other light mechanical applications.
   The ITC determined that the sharp drop in domestic steel prices from mid-2004 to mid-2005 was largely caused by the recent flood of Chinese imports, and that U.S. steel producers experienced a sharp drop in sales, capacity utilization, employment and market share.
   Two ITC commissioners proposed that the president impose an annual quota of 160,000 short tons of steel pipe from China for three years, while two other commissioners proposed that the president impose a variable tariff based on the level of imports.
   Bush said the ITC’s recommended quota and tariff remedies would impose costs for U.S. consumers four to five times greater than the additional income that domestic producers would realize.
   The White House’s position on steel imports contrasts with the position it took in 2003 to use steel tariffs to protect the domestic industry. The tariffs have since been rolled back, but were widely viewed at the time as a political move to shore up Bush’s support in steel producing states such as Ohio and West Virginia for the 2004 presidential election.
   Bush authorized the secretaries of Commerce and Labor to consider trade adjustment assistance for producers or workers that seek help under the law.