Bush retreat from trade fight sends the wrong message

The White House tried to put a happy face on the lifting of steel tariffs by President Bush Thursday, saying that 20 months of tariffs had accomplished what 36 months were supposed to do. But the truth is that the administration buckled to European pressure.
The president weighed the political consequences of standing up to threatened European retaliatory tariffs that were aimed at agricultural and textile producing states in the South against the possible backlash in steel-producing states such as Pennsylvania, Ohio and West Virginia. The rust belt didn't carry as much weight as the Carolinas and Florida.
The steel industry was reeling when President Bush gave it the protection it needed against unfair steel imports. More than 35 companies had filed for bankruptcy (the number now stands at 41) and thousands of American steel workers had lost their jobs.
The tariffs, which were aimed at specific markets and were to be phased out over three years, gave the domestic industry a cushion while the domestic industry was being restructured. The president acted Thursday as if that restructuring were complete and the tariffs had done what they were supposed to do.
The job is unfinished
While it is true that some restructuring has been completed, the overall economy is rebounding and China has been gobbling up steel on the international market, there's no question that the steel industry could have used another 16 months of protection. Industry leaders told the president that, to no avail, Tuesday when he visited Pittsburgh.
The administration says that it will monitor steel imports more aggressively to protect against dumping, but that's little consolation. If it finds evidence of dumping, what will it do? File protests with the World Trade Organization that will take years to adjudicate? Impose tariffs?
This is an administration that has made much of the need for the United States to project an aura of strength. It says the United States must be resolute in protecting its own interests. That it must stand alone when necessary and when its cause is right.
That kind of talk rings hollow in this hasty retreat the administration pursued from a threatened trade war.
And if we think our trading "partners" will not exploit this sign of weakness, we are kidding ourselves.
And the winner is ...
While it was the European Union from which we ran in this skirmish, it is China that will be emboldened.
China, which enjoyed a $103 billion balance of trade with the United States last year, responded angrily when Washington announced measures last week to discourage sales of Chinese television imports at artificially low prices. China, which anticipates the balance of trade with the United States growing as high as $130 billion, refused to take measures that would open its markets to more U.S. goods and dismissed a U.S. suggestion that it relax controls on its currency that make Chinese exports unfairly cheap on world markets. Chinese officials have twice summoned the U.S. ambassador to respond to its complaints about trade issue.
China acts like the victim in a trade relationship that has worked to its favor for more than a decade and has grown to the point that Americans ought to be alarmed.
The United States will get nowhere negotiating with China from a position of weakness. And that could be the most troublesome thing about the Bush administration's unwillingness to stand up against the Europeans.
If there is one time that the president should have said bring it on, it was yesterday. He should have said it loud and clear to the European Union. Then a few days later, he could have whispered it, ever so politely, in the ear of Chinese Premier Wen Jiabao, when he visits Washington. Now it would just be a waste of breath.