End the steel tariffs

Washington Post: No one would ever accuse the Bush administration of being eager to admit to its mistakes. But in the case of steel tariffs imposed by the president in 2002, such an admission is overdue. The tariffs were a diplomatic failure: Imposed just as a critical round of international trade negotiations was getting underway, they sent precisely the wrong message to the world at precisely the wrong time -- namely, that the United States supports free trade in theory but not in practice. The World Trade Organization has condemned the tariffs and, depending on the results of an appeal, may well allow others to retaliate against the United States.
Economic failure
Now it seems that the tariffs were an economic failure as well. True, they have helped the steel industry recover from what seemed as if it might be a permanent slump. Steel productivity has risen. At a meeting of the Congressional Steel Caucus Thursday, the steel industry trumpeted its successes, which also include consolidation and plant upgrades that will, they say, better prepare the industry for competition. But a close reading of two reports filed last week by the International Trade Commission also shows that the tariffs are costing industries that consume steel more than $680 million annually.
The ITC claims, defensively, that this loss is offset by the $650 million paid to the U.S. government in tariffs. Since companies pass tariff costs on to the consumers, that simply means the American public is paying a $650 million hidden tax to the U.S. government. Given its anti-tax rhetoric, this administration should find that unacceptable.
For the record, it doesn't appear that the tariffs have been the political triumph for the president that they were supposed to be either. Instead of thanking the president for protecting industry, the steelworkers union has already backed one of his opponents, Rep. Richard Gephardt, in the 2004 presidential race. Nor will it be so easy, going into that election, for the president to claim that he "saved jobs" by imposing steel tariffs. He may have saved them in the steel industry, but he may well have destroyed more of them elsewhere. That's the trouble with trade restrictions: They come at a cost.