`Steel City' braces for US tariff decision

America's "Steel City" is hosting an anticipated US$1 million fund-raiser this week for US President George W. Bush as he faces a deadline to decide whether to keep steep tariffs on steel imports.

Bush is expected to decide on the tariffs before the WTO dispute settlement body meets Dec. 10. His campaign travels yesterday and today take him to Pennsylvania and Michigan -- two battleground states where voters are fiercely divided on the tariffs Bush imposed in March last year to give the beleaguered US steel industry breathing room from foreign competition to consolidate and restructure.

The EU, Norway and Japan have threatened immediate retaliation on billions of dollars of US exports if the tariffs are not eliminated. The WTO last month upheld its earlier ruling that the tariffs, currently set to expire in March 2005, violate global trading laws.

"It's a very big decision for the president from the political standpoint," said William Green, a Pittsburgh-based Republican political consultant. "I understand the WTO pressure. But it's at least 60 electoral votes involved. That has to weigh heavily on this president."

The tariffs endeared the Republican president to traditionally Democratic steelworkers in states such as Pennsylvania, Ohio and West Virginia. But coming on the heels of a slumping economy, the tariffs have since angered owners and employees of small manufacturing companies that make up part of his Republican base in Michigan, Minnesota and Wisconsin.

Collectively, those states account for almost one-third of the 270 electoral votes Bush needs to win re-election.

Yesterday, Bush was to host a fund-raiser in Dearborn, Michigan, a suburb of Detroit, where auto parts manufacturers say the tariffs have hiked steel prices. Bush is also expected to talk about the economy at steel-consuming Dynamic Metal Treating in Canton, Michigan.

If the tariffs remain in place, steel consumers are likely to face a supply shortage, said Lew Leibowitz, attorney for the Consuming Industries Trade Action Coalition. CITAC opposes the tariffs.

Yet "I can't find anyone who believe that the tariffs are going to be continued," said Leibowitz, who predicted the White House would announce its decision this week. "We're beginning to get a little optimistic."

But the president is not expected to release his decision until after Tuesday's fund-raiser at the Westin Convention Center in Pittsburgh, which is co-hosted by US Steel chairman and chief executive officer Thomas Usher. The luncheon has already surpassed the US$750,000 fund-raising goal, Green said, and is expected to eclipse the US$1 million mark.

"It's been one of the easiest raises I've ever done," said Republican National Committeewoman Christine Toretti, who is co-hosting the luncheon with Usher.

Lifting the tariffs now, said US Steel senior vice president Terrence Straub, could cost Bush a winning margin in Pennsylvania -- a state he narrowly lost in 2000 and will have visited 23 times on Tuesday since taking office.

"They don't need but a handful of votes," Straub said. "If he lifts the relief, he forsakes that; he's walked away, he's squandered that opportunity. This would be, in our view, a broken promise by the White House."