[Economics Report]:Steel Tariffs Dispute


This is Bob Doughty with the VOA Special English EconomicsReport.

Last week, the World Trade Organization ruled that United Statestaxes on imports of steel violate international trade law and shouldbe removed. President Bush ordered the new taxes, some as high asthirty percent, in March, two-thousand-two. He did so to protect theAmerican steel industry from foreign competition.

The taxes were to last for three years and were designed to saveAmerican steel companies from failure. During that time, steelcompanies were to re-organize or join with other companies. Manystruggling companies were bought by larger ones. And jobs were cut.But the steel industry says the reorganization is not complete. Andsteel industry leaders say it may never be complete if PresidentBush cancels the import taxes.

The European Union had protested to the W-T-O about the taxes onsteel imports. The recent ruling permits the E-U to order taxes onimports from the United States as punishment. E-U countries say theyplan to target more than two-thousand-million dollars worth ofproducts. Several other nations, including Brazil, China, and Japan,also protested the steel import taxes and are threatening similaraction.

The American steel industry offered a compromise plan this week.Three powerful steel companies proposed that the taxes on steelimports could end six months early. They also said the taxes couldbe sharply lowered during the next four months.But the EuropeanCommission, which negotiates E-U trade agreements, says the UnitedStates should honor the W-T-O ruling.

President Bush says he will decide on the issue in a reasonableperiod of time. The E-U has said it will begin taxing Americanimports December fifteenth if the steel import taxes are still inplace. The E-U is expected to target products from American statesthat are very important to Mister Bush's re-election effort.

Some companies and individuals in the United States are alsourging Mister Bush to end the import taxes. Industries that usesteel say they have been hurt by the price increases that resulted.

And reports say some Bush administration officials are alsocalling for an end to steel import taxes. They reportedly think thetaxes might be causing Mister Bush more political harm than good.

This VOA Special English Economics Report was written by CatyWeaver. This is Bob Doughty.

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