U.S. plans to drop steel tariffs
 |
The EU has threatened retaliation if U.S. steel tariffs are not removed.
Story Tools
|
WASHINGTON (CNN) -- The U.S. administration is likely to repeal tariffs on imported steel, according to administration officials.
While a senior administration source called the move "all but a done deal," a White House spokesman insisted President George W. Bush has not yet officially signed off on it
"The president still has not made a decision. It remains under review," spokesman Scott McClellan told reporters traveling with the president on his fund-raising trip to Michigan. "The administration continues to consult with users, consumers, members of Congress, and others on steel."
Administration sources said the tariffs could be repealed because they accomplished administration goals of allowing the steel industry time to regroup and recover. But they also said a major factor in the decision is concern that the European Union, Japan and other countries would retaliate.
The tariffs were high on the agenda of last month's meeting between Bush and British Prime Minister Tony Blair in London.
"We're in a tough position when you've got the penalties about to be imposed for something that we're doing," a senior administration official told CNN. "In some ways it is out of our control."
The move is designed to avoid retaliation from key trade partners such as Europe and Japan that would have targeted products exported from politically crucial U.S. states.
European countries had vowed to respond to the tariffs, which were ruled illegal by the World Trade Organization (WTO), by imposing sanctions on up to $2.2 billion in exports from the United States, beginning as soon as December 15. Japan issued a similar threat.
The WTO's ruling against the tariffs was finalized three weeks ago, clearing the way for the retaliatory levies.
Bush decided in March 2002 to impose tariffs of 8 to 30 percent on most steel imports from Europe, Asia and South America for three years, in a move to help the U.S. steel industry cope with competition.
After the WTO ruling, the Bush economic team concluded that the tariffs should be scrapped.
Macquarie Bank global chief economist Richard Gibbs told CNN Monday that he expected to see the U.S. steel tariffs wound back.
He said the "greater good" would be done for the U.S. economy by winding them back, and in any case the cost of likely retaliation by trade partners such as Europe and Japan would be too high.
Gibbs also noted that China was becoming a key player in the global steel trade.
Observers say ending the tariffs ahead of schedule could lead to a backlash against Bush in the steel states of Ohio, Pennsylvania and West Virginia.
-- CNN White House Correspondents Suzanne Malveaux and Dana Bash and producer Matt Byrne contributed to this report
