Early signs of a shift to faster US economic growth provided a crucial backdrop for President George W. Bush's decision this week to abandon steel tariffs, making it easier for him to risk the wrath of voters in politically important industrial states.
"Because the economy is improving, the argument that the tariffs are needed for this industry is less of a problem," said Grover Norquist, president of Americans for Tax Reform.
"You can say to these companies, `We've given you your training wheels, we've helped you out and now these protections aren't needed anymore,'" said Norquist, who is a close ally of the Bush administration but a foe of tariffs.
Steel companies and their workers fought hard to persuade Bush to keep the 20-month-old tariffs, but on Thursday he opted to scrap them in the face of a possible trade war with Europe.
Ohio, West Virginia and Pennsylvania are all states with big steel-making constituencies that have suffered heavy job losses in recent years. They are also expected to be key battlegrounds in the November 2004 presidential race. Bush won Ohio and West Virginia in 2000 but Democrat Al Gore carried Pennsylvania.
"We are talking about three very important states," said pollster John Zogby. "Bush is hoping that the upswing in the economy gives him cover on this issue."
Political analyst Larry Sabato agreed.
"If the economy had not just witnessed this stunning upturn in the numbers, it would have been a lot harder for Bush to do this," he said. "If this turns out to be a close election race, it could cost Bush."
Bush and his advisers have relished recent economic figures showing the economy grew at a rate of 8.2 percent in the third quarter -- the fastest pace in nearly 20 years. Productivity vaulted 9.4 percent in the same period, also marking the best pace in two decades.
Some of the optimism was tempered on Friday by a report of slower-than-expected job growth. US payrolls outside the farm sector edged up by 57,000 in November, falling short of forecasts for a jump of 150,000.
Private economists said the steel tariffs could have backfired on Bush if left in place. Financial markets might have suffered and that in turn could have taken some of the wind out of the economy's sails.
Although the White House did not play this up, avoidance of a trade war with Europe was surely a key factor in the decision. The WTO ruled that the protections were illegal and Europeans were set to slap US$2.2 billion in retaliatory duties on US goods. Japan also had threatened sanctions.
Among those affected would have been citrus growers from Florida, the bitterly contested state in the 2000 election that is rich in electoral votes.
Free-traders, a base of support in Bush's Republican party, loathed the tariffs and they were a burden to domestic car makers that had to absorb the higher steel costs.
So high would have been the price-tag for leaving the tariffs in place that Stephen Wayne, professor of politics at Georgetown University, said he thought that Bush probably lost no sleep over the decision.
"All the cards were stacked in one place," he said. "I would say that the European Union helped Bush out of a difficult situation by giving him a reason to dump the tariffs."
But Zogby and Sabato said that the decision may yet come back to haunt Bush, especially if the stellar numbers on GDP and productivity fail to lift the anxieties about the job market that have lingered long after the end of the 2001 recession and have helped fuel growing support for protectionist policies.
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