International pressure increases on U.S. to drop steel tariffs
A World Trade Organization appellate body ruled Monday that U.S. tariff increases on certain steel imports are illegal.
The decision upholds the conclusions of a July 11 WTO report that stated the U.S. government lacked a legal basis for the steel import tariffs.
On March 5, 2002, President Bush imposed “safeguard measures” on 10 steel product groups in the form of additional tariffs up to 30 percent.
Immediately after, the European Commission, along with Japan, Korea, China, Switzerland, Norway, New Zealand and Brazil, requested a WTO dispute settlement procedure against the U.S. steel tariffs.
The European Union now threatens to impose up to $2.2 billion, or 100-percent tariffs on certain U.S. goods. These retaliatory measures could take effect by the end of the month.
According to the Associated Press, many U.S. goods targeted by the EU for tariff increases are produced in “swing states that would be crucial to Bush’s re-election campaign next year.”
The Bush administration disputes the WTO appellate body’s findings. “We will be reviewing the WTO report carefully,” said Richard Mills, spokesman for the U.S. Trade Representative.
The United States has argued that the tariffs are “temporary” to the give the domestic steel producers “breathing space needed to restructure and consolidate and as such they are consistent with WTO rules.”
The United States has also affirmed that the financial crises in East Asia and Russia in the late 1990s combined with a strong U.S. dollar produced an “unexpected” increase in imports, injuring domestic steel producers.