Bush, in ‘Steel City,’ Skips the ‘T’ Word

Here in “Steel City,” President Bush didn’t say a word in public Tuesday about the hot political issue of the day: his expected decision to lift the tariffs he imposed on imported steel last year.

But it was on the minds of the steelworkers who demonstrated outside Bush’s campaign fund-raiser in Pittsburgh as well as some of the president’s Republican supporters who attended the event, underscoring the high political stakes of the trade issue in the 2004 presidential campaign.

Thomas J. Usher, chairman and chief executive of U.S. Steel Corp. and a co-sponsor of the fund-raiser, joined members of Pennsylvania’s congressional delegation in privately lobbying Bush to keep the tariffs, which were put in place to prop up the price of steel in domestic markets so financially strapped U.S. steelmakers would have time to reorganize.

But according to Rep. Tim Murphy (R-Pa.), who brought up the subject with Bush, the president responded: “I’m not making any comments about that except to say I’m not going to make a political decision.” Murphy said Bush told him he would “deal with it in terms of what’s going to be good for the American economy overall.”

Bush was even lobbied aboard Air Force One by Sen. Arlen Specter (R-Pa.), who told reporters that the tariffs were demonstrating their usefulness in protecting the steel industry as it restructured.

White House Press Secretary Scott McClellan said the president had not yet decided what to do about the tariffs, imposed in March 2002 and deemed illegal last month by the World Trade Organization. The tariffs are supposed to remain in effect for three years, but the program called for a midpoint review by the White House.

Although the tariffs are popular in steel-producing states, including Pennsylvania, Ohio and West Virginia, steel-consuming companies in such states as Michigan and Wisconsin say the duties have increased manufacturing costs and forced layoffs as companies moved production overseas in response to rising steel prices.

In addition, the European Union has threatened retaliatory tariffs on U.S. goods if the tariffs stay in place after Dec. 10.

“He’s trying to dance across Pittsburgh without having to deal with this thing,” said Peter Morici, a business professor at the University of Maryland and a former chief economist at the U.S. International Trade Commission.

“However, he’s going to have to deal with it,” he said.

In his remarks at the Pittsburgh fund-raiser, which officials said had been scheduled long before the tariffs became an issue, Bush avoided the subject and spent less time than usual promoting his economic policies.

He barely mentioned unemployment or recent improvements in job creation, since those have been little felt in western Pennsylvania.

“I’m going to stay focused on a pro-growth economic agenda, one that elevates the entrepreneurial spirit of America, until everybody who wants to work can find a job,” Bush told his supporters at the event, which campaign officials said raised $850,000.

Gov. Ed Rendell, a Democrat, said Bush’s visit to “Pennsylvania’s own ‘Steel City’ should surely highlight the tremendous impact heavily subsidized foreign steel prices can have on a manufacturing-based economy. Since 2001, in Pennsylvania alone almost 3,000 manufacturing jobs have been lost as a result of unfair trade practices, crippling the economies of many of our steel towns.”

Bush imposed the tariffs, which range from 8% to 30%, after the U.S. International Trade Commission ruled that imports severely harmed the U.S. steelmaking industry, which has struggled for years to compete with foreign producers that benefit from lower costs and government subsidies.

Usher, the U.S. Steel chairman, urged “that the relief be kept in place and that [Bush’s] promise to the steel industry be fulfilled,” said Michael R. Dixon, a spokesman for the Pittsburgh-based company, the country’s largest steel manufacturer.

Usher remained hopeful that Bush would “keep his earlier commitment to the steel industry to keep the tariffs in place for their full term,” Dixon said.

Rep. John P. Murtha (D-Pa.) said, “The bottom line is that the tariffs haven’t had time to do the job they were intended to do, and repealing them now isn’t the answer.”

Pennsylvania, with 21 electoral votes, is considered a key battleground state in next year’s presidential election. The Pittsburgh visit was Bush’s seventh to the city and 23rd to the state -- which he lost in 2000 by only 5 percentage points -- since he became president.

Steve Murphy, campaign manager for Democratic presidential candidate Rep. Richard A. Gephardt of Missouri, who has been endorsed by the United Steelworkers of America, said Tuesday at a breakfast with reporters in Washington, “Obviously, this is going to be a very significant issue in states like Ohio, West Virginia, Pennsylvania.”

Bush supporters were already signaling how they might deal with the political fallout in steel-producing states if the tariffs are lifted.

Tim Murphy, who represents the Pittsburgh area in Congress, said he hoped that if the White House lifted the tariffs, it would find other ways to help the U.S. steel industry.

“The issue isn’t about just tariffs,” he said. “It’s about stopping illegal dumping of steel on American soil.”

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Reynolds reported from Pittsburgh and Simon from Washington. Times staff writer Nick Anderson contributed to this report.