The beleaguered American steel industry has urged the Bush Administration to defy the World Trade Organisation ruling and continue protection for it despite the certainty that the European Union and other countries may retaliate if the US does not comply.
It said that 20 months after President George W Bush imposed tariffs on steel imports, the US steel industry has been able to go through a historic transformation under the umbrella of protection.
Noting that several factors fueled the turnaround, The Washington Post said these factors include protection, the government's takeover of failing pension plans and the willingness of organised labour to cut payrolls.
Industry officials said that tariff protection set the stage for all this. Now they are lobbying hard to prevent the White House from giving in to Monday's ruling by the WTO that the tariffs are illegal and should end now, about 18 months before they are scheduled to expire, the Post said.
The US steel industry wants continued protection, it said, because "it still sees itself as being in mortal danger.
While weak companies have merged into more streamlined steelmakers, they have not yet figured out how to operate as global competitors, industry executives and labour officials said.
Wilbur L Ross, a New York financier whose International Steel Group has invested over $1.7 billion to buy failing steel companies, said: "While a lot of progress has been made in restructuring, it is not finished."
Merged companies, he said, are just learning how to function with slashed work forces, and companies still mired in bankruptcy will be unable to get creditors to help them emerge if the tariff safety net disappears.
Others, said the Post, disagree, and argue that Ross and other big steel owners simply want to keep their gravy train on track as long as possible.
The steel industry's call for continued protection is opposed not only by the WTO and foreign producers but by American steel-consuming industries.
"It is our position that any cost benefit to the US economy as a whole that was going to come from the steel tariffs in helping the steel industry restructure has already occurred," said Brian Duggan, director of international programmes for the US Motor & Equipment Manufacturers Association, which represents auto parts suppliers who say they have been crippled by higher steel prices because of the protection granted to the US steel industry.
The US International Trade Council found last month that higher prices cost steel-consuming industries in America some $680 million in just under a year of tariff protection.
