Skip to main content

Features

Bad trade winds

Bush steel tariffs threaten to ignite a trade battle with Europeans

When President Bush imposed tariffs on imported steel in March, political pundits suggested he was trying to light a fire under GOP campaigns in steel-producing swing states like Ohio, Pennsylvania, and West Virginia ("QuickTakes," WORLD, April 6). But the move is threatening to boil over into a trade war that could threaten the emerging economic recovery.

Tensions over trade were high as President Bush and U.S. Trade Representative Robert Zoellick prepared to meet with European leaders last week at the White House. On the table for discussion: A European plan to retaliate with $335 million in tariffs on citrus from Florida, apples and pears from Washington and Oregon, textiles from North and South Carolina, motorcycles from Wisconsin, and, of course, steel.

Fighting with the tools of political warfare, the Europeans targeted electoral swing states important to the GOP, forcing Mr. Bush to reap what he has sown. "I have grudging respect for the cleverness of the European list," said Brink Lindsey, a free-trade economist at the Cato Institute.

Meanwhile, with U.S. officials threatening further retaliation, economists worry that the politicization of world trade would harm the economy. The Bush tariffs, for instance, would raise U.S. steel prices by an estimated 8 percent to 10 percent, taking money out of the pocket of any American who buys any product with steel in it. David Wyss, chief economist at Standard & Poor's in New York, put it this way: "We really can't afford a major trade war right now given what it could do to the economic recovery."

Timothy Lamer

Timothy Lamer

Tim is executive editor of WORLD Magazine. He is a University of Kansas graduate and worked for the Media Research Center before joining WORLD in 1999. Tim's work has appeared in The Wall Street Journal, The Washington Post, and The Weekly Standard. He resides with his wife and three children in Spring Hill, Kansas.