Just say no to steel tariffs

Posted: Nov 16, 2003 12:00 AM

WASHINGTON -- This is going to be entertaining.

All the Democrats seeking to evict George Bush from the White House denounce him for ``unilateralism,'' meaning insufficient respect for international institutions and obligations. Now some of those Democrats may turn on a dime and demand that he defy an international organization, and disregard clear obligations freely entered into, by ignoring the World Trade Organization.

Last week the WTO said, for a second time, something that hardly needs saying at all -- that the tariffs the Bush administration imposed 20 months ago on imported steel are not justified by any demonstrated surge in steel imports, and are as illegal as picking pockets, which all tariffs do. As adolescents say when told something obvious: Duh.

Thirteen months after winning an excruciatingly close election, Bush proved himself less principled than Bill Clinton regarding the free trade principles that have fueled world prosperity since 1945. His tariffs were supposed to provide a three-year ``breathing space'' for domestic steel makers -- who have been on the respirator of protection for decades.

Since then various studies, not all of them disinterested, have reached the same conclusion: By raising the cost of goods manufactured from steel, the tariffs have cost more jobs than they have saved. Duh.

But most of the Democratic candidates are trying to do something no Democrat has done since the Civil War -- win the presidency by running as a protectionist. Once upon a time, Democrats understood that when Republicans protected, as they did for decades, American industry from the inconvenience of price competition from abroad, the result was higher prices -- a hidden tax -- paid by consumers. Today Democrats advocate protectionism, which they call ``fair trade,'' in the name of protecting what tariffs actually destroy: American jobs. The steel tariffs are, for example, a $100 tax on every new American car, and on the creation of jobs for autoworkers.

Bush imposed the tariffs to court steelworkers. There are 124,000 of them nationwide. But they are most important in Pennsylvania, which had 23 (it now has 21) electoral votes that Bush in 2000 lost by 204,840 votes; Ohio, which had 21 (now 20) electoral votes that he won by 165,019; and West Virginia, which has five electoral votes that he won by 40,978 votes. The steelworkers union has endorsed Dick Gephardt for president.

If the Bush administration defies the WTO ruling, the European Union has a list of $2.2 billion of U.S. exports on which it will impose tariffs of up to 30 percent, shutting many products out of Europe. There could be an additional $4 billion in EU sanctions if Congress does not repeal U.S. export subsidies -- more corporate welfare -- that the WTO has ruled illegal.

Japan and other nations also have lists of targeted U.S. products. Textiles, sunglasses, pantyhose and other clothing, wine, hunting weapons and other sporting goods, farm equipment, toilet paper, ballpoint pens, boats -- these and other U.S. products are on foreign governments' lists tailored to serve domestic interests in each country. But the EU does not disguise the fact that it is targeting U.S. products from swing states Bush will target in 2004.

One targeted product is motorcycles made in Pennsylvania and Wisconsin. Bush lost Wisconsin's 11 electoral votes by just 5,708 votes.

Another targeted product is apples. Last year Washington state produced 60 percent of America's apples. Bush lost Washington's 11 electoral votes by 138,788 votes. Another targeted product is citrus fruit, nearly 80 percent of which comes from Florida, whose 25 (now 27) electoral votes Bush won by 537 votes.

In an election year, or in the year before an election year -- that is, in any year -- it is difficult for democracies to be governed sensibly, given the political class' preoccupation with cobbling together majorities from factions receiving government favoritism. Fortunately, the WTO has presented the president with an excuse to retreat from the futility of trying to erect a wall between the steel industry and reality. That protection comes at the expense of the 99.9 percent of Americans who are not steelworkers whose jobs are endangered.

A steel executive warns against ``buckling'' to the WTO. Buckling? To an institution the United States helped to create in order to promote the free trade policies favored by every U.S. administration since the Second World War?

Alas, Bush may be tempted to play the national security card by arguing that tariffs are necessary because, well, tanks need steel. Five months after 9/11 he told a cattlemen's convention that agriculture subsidies are national security measures because ``this nation has got to eat.'' That is nonsense, but entertaining.