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White House considers dropping steel tariffs

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WASHINGTON (AP) — The Bush administration is debating whether to drop steep tariffs on steel imports halfway through a three-year program.

The internal debate comes as the U.S. International Trade Commission prepares a Sept. 19 report for the White House on the tariffs' impact on domestic steel producers and consumers. The debate pits global business policy against President Bush's political interests in key states as he seeks re-election next year.

"I've talked directly to Commerce, to Treasury, to USTR (the U.S. trade representative) and to the White House, and I do know they are wrestling with this issue," Rep. Phil English, R-Pa., chairman of the Congressional Steel Caucus, said Wednesday.

"We looking forward to reviewing it when we see it," White House spokeswoman Claire Buchan said of the report, declining further comment.

Bush enacted the tariffs, from 8 percent to 30 percent on certain kinds of foreign-made steel, in March 2002 to help the battered domestic steel producing industry. The tariffs are currently set to expire March 6, 2005.

At least 35 steel producers have declared bankruptcy since 1998, eliminating 50,000 jobs.

A presidential adviser who spoke on condition of anonymity said Bush's economic team is pushing the White House to drop the tariffs. They argue the tariffs have already done more in 18 months for steel states than former Democratic administrations did. The advisers have also noted that the World Trade Organization has ruled the tariffs violate global trade laws and the European Union has threatened $2.2 billion in retaliatory sanctions on U.S. exports.

But steel-friendly Capitol Hill lawmakers and political advisers believe rolling back the sanctions would be disastrous for the domestic industry — and endanger Bush's goal of winning key Rust Belt swing states where steelmaking remains a dominant industry. Bush lost Michigan, New York and Pennsylvania and narrowly carried Ohio and West Virginia in 2000. Also, many of the roughly 300,000 retired steelworkers live in Florida, the state that finally decided the 2000 election.