| George W. Bush at the White House. (AFP)
Washington, Dec. 4 (Reuters): US President George W. Bush scrapped steel tariffs today 16 months ahead of schedule to avert retaliation from Europe and Asia, risking a political backlash in battleground states in next year’s election.
The White House said Bush will, however, keep in place a system that helps US steel producers by licensing and tracking steel imports to cut the risk of unexpected surges.
“This safeguard definitely provided the industry and workers with needed breathing space and to its credit, much of the industry has used its time well,” White House spokesman Scott McClellan said.
“The bulk of the restructuring that was necessary to make the industry more competitive has now taken place.” he said.
The widely expected decision comes 11 days before the EU was set to slap duties on $2.2 billion of politically sensitive US exports if the tariffs were not lifted.
Japan had also threatened to hike duties on $458 million of US goods.
European steel lobby Eurofer said today it welcomed Bush’s decision to end controversial steel import duties.
“This means that indeed access to the markets becomes normal. This is an excellent thing. We are glad that the President has decided to respect the rules of the World Trade Organisation (WTO),” said Christian Mari, director of Eurofer. He stressed his reaction was preliminary and said he had not seen the full decision.
Bush set tariffs that ranged up to 30 per cent on imported steel in March 2002 to help the US steel industry get back on its feet after a string of bankruptcies.
The duties had been scheduled to expire in March 2005.
The WTO last month ruled that they violated international trade rules, sparking the retaliation threats.
McClellan said the White House would closely monitor imports and respond to any surge.
European steel firms had complained of losing US market share after the duties were imposed in March 2002.
The EU had threatened sanctions on up to $2.2 billion of US goods if the duties had remained in place by December 15.
Eurofer members include the world’s biggest steel firm, Arcelor, and Anglo-Dutch company Corus.