I'm sure he had his reasons, I mean he's a smart business man.

or not......

 

the US's competitiveness has been reduced due to the steel shortages and rising prices

BY TOM WALSH
DETROIT FREE PRESS COLUMNIST

Protectionism can be so dang tempting.

You don't have to do a lot of it -- just a little sniff here, a tiny snort there -- to get a nice buzz. No hangover, no upset tummy.

That's what President George W. Bush figured in March, when he slapped punitive tariffs of up to 30 percent on imported steel.

But now the poor prez has a nasty case of acid reflux.

Folks who make auto parts, 55-gallon drums and 1,001 other products from steel are all riled up. They say that because of the tariffs, they're forced to pay 20, 30, even 54 percent more for steel -- if they can even get the steel they need. Shortages are cropping up; supply contracts are being broken.

Auto suppliers are losing business to China, England -- and even to our friendly northern neighbor, Canada, whom the prez graciously exempted from the steel tariffs. That's what a parade of steel users, including G.R. Spring & Stamping of Grand Rapids, told Congress recently.

Uneven playing field
Tim Leuliette, chairman and president of Plymouth-based Metaldyne, raised the rhetoric to sonic boom level with a tirade last week in Traverse City.

Leuliette said auto suppliers will be "the meat in the sandwich," stuck between tariff-inflated steel costs and auto companies that won't accept higher prices for components. "The tariff," he said, "is patently dishonest."

"Suppliers cannot and must not be forced to absorb price increases legitimized by the politically driven tariffs," Leuliette said. "If we must bring Detroit to its knees over this, so be it."

Whew.

Leuliette was one of 20 executives who signed a June 14 letter to Bush from the Motor & Equipment Manufacturers Association, asking him to reconsider the tariffs. In July, Leuliette urged all Metaldyne employees to write their lawmakers with the same request.

The Bush administration took a small step toward mollifying irate steel users a month ago, by ordering U.S. steelmakers to report by Sept. 5 on how tariff relief is helping build a stronger domestic steel industry.

Unintentional fallout
Bush should have known, of course, that a tariff that helps one industry will inevitably put the squeeze on others.

But back in the hotly contested 2000 election campaign, steel industry states like Pennsylvania and West Virginia were begging for relief from low-priced imports. Bush promised to help if elected.

When it came time to deliver, Bush figured he could live with flak from overseas. At home, the steel industry was strongly behind the tariffs. And big steel users, like General Motors Corp. and Ford Motor Co., weren't opposing them. They didn't want to rile the UAW, which was supporting the steel union's bid for protection.

The tariffs have clearly had their intended short-term effect. Steel prices and profits rose immediately.

But fallout elsewhere is causing heartburn for the prez. Leuliette said the tariffs benefit 178,000 steel industry workers, but threaten 2.2 million auto supplier jobs.

And then there's the Russian chicken problem.

Russia stood to lose $500 million in steel exports from the tariffs, so it banned imports of American poultry parts, on grounds that our chickens weren't healthy enough. The U.S. has since eased restrictions on Russian steel imports. Will Russia now declare our chickens healthy?

Need an Alka Seltzer, Mr. President?

 

Politics are so stupid.