Bush to Comply with the WTO?

Well, it looks like Bush may indeed lift the steel tariffs. Many (most?) of the relevant parties in the administration have wanted to lift them for some time, but now it may happen. To emphasize the point, Senator Charles Grassley (an unusually sensible Republican from Iowa who chairs the Senate Finance Committee) apparently wrote Bush a letter suggesting that he remove the tariffs, according to CBS Marketwatch:

“The purpose of the steel safeguard tariffs has therefore been met, but this has come at a heavy cost,” Senate Finance Committee Chairman Charles Grassley, R-Iowa, wrote in a letter to Bush dated Friday.

The quasi-judicial U.S. International Trade Commission “estimates that the steel safeguard tariffs have already cost U.S. businesses and workers over $680 million since their imposition,” Grassley added.

Bush is widely expected to lift the tariffs, according to administration sources speaking on condition of anonymity. But the president, who likes to make surprise announcements, has been guarded in the last few days about his intentions.

US Trade Representative Bob Zoellick has begun laying the groundwork by saying things like “the polictical climate has changed since the tariffs were imposed” and “the tariffs have already done their job.” So why will Bush now remove the tariffs, after all of this time? A news item from Yahoo suggested one reason:

Grassley’s letter gives the White House more ammunition for arguing it is lifting the tariffs for domestic reasons, rather than “buckling under” to the threat of EU retaliation.

But I don’t buy this line of reasoning. If the White House was looking for domestic reasons to remove the tariffs, they had plenty with the ITC report back in September. Plus, why remove the tariffs now, right after the WTO ruling, if you want to make it look like your decision has nothing to do with possible EU retaliation?

No, it doesn’t make sense. Instead, as I suggested earlier, I think Bush will use the WTO ruling as political cover that allows him to remove the tariffs while not admitting what the administration already knows – that the tariffs were a mistake. In the process, he might actually help the US manufacturing sector – something that would admittedly be an untested policy first for this administration. Even better, he gets to go to steel country in Ohio and Pennsylvania and blame the EU for the tariffs being lifted. After all, from Bush’s perspective, what better scapegoat for this administration’s terrible economic policy-making than the EU? Unless you can somehow blame Saddam Hussein.