WASHINGTON White House faces steel-tariff decision

The White House disagrees with the overall findings of tariff ruling.
WASHINGTON (AP) -- A global trade ruling against U.S. steel tariffs puts the White House in a political and economic squeeze as President Bush weighs the sanctions' fate -- and his re-election prospects.
The White House was pummeled from both sides Monday after a World Trade Organization panel in Geneva declared the sanctions illegal. The European Union has threatened $2.2 billion in retaliatory sanctions if the tariffs, imposed in March 2002, are not lifted immediately.
"The decision undoubtedly confronts Mr. Bush with a test of wills," said Leo W. Gerard, international president of the United Steelworkers of America, which wants the tariffs to remain. "Will he exercise his sovereign right as president to protect the jobs and survival of the entire American steel industry, or will he knuckle under to the threat of economic blackmail being leveled by the European Union?"
Criticism
The Bush administration criticized the WTO's appellate decision. The final verdict of the organization's highest tribunal, the decision upheld a similar ruling by the trade group during the summer.
While agreeing with some of the decision's details, "we disagree with the overall appellate body findings," said Richard Mills, spokesman for U.S. Trade Representative Robert Zoellick.
In South Carolina, Bush was promoting the virtues of free trade even as the WTO hammered the tariffs that he ordered. Critics have said the tariffs display Bush's abandonment of free-trade principles.
White House spokesman Scott McClellan told reporters on Air Force One that "we disagree with the overall WTO report" and said the administration was studying the ruling. He offered no timetable for a decision whether to keep the tariffs in place.
"The steel safeguards the president imposed were to provide our domestic steel industry an opportunity to adjust to import competition ... to give our domestic industry an opportunity to restructure and consolidate and become stronger and more competitive," McClellan said.
Implementation expected
The WTO's full body is not expected to implement the appellate decision until the end of the month at the earliest. The European Union must wait five days after the final WTO ruling is issued to impose its retaliatory sanctions.
The tariffs, from 8 percent to 30 percent on certain kinds of imported steel through March 2005, were imposed, after 41 companies had declared bankruptcy since 1997, to give the battered domestic steel industry breathing space to regroup and consolidate.
They endeared the Republican president to traditionally Democratic steelworkers in states such as Pennsylvania, Ohio and West Virginia. Exacerbated by a slumping economy, however, the tariffs have angered owners and employees of small manufacturing companies who comprise part of the president's GOP base in Michigan, Minnesota and Wisconsin. They contend the tariffs have driven up steel prices and forced small manufacturing businesses to close.