Bush Avoids Talk of Tariffs in Speech to Auto Workers

President Bush pivoted from Iraq to the economy on Monday but, in a speech to auto workers, offered no hint of his coming decision on the issue foremost on the minds of his audience: whether he will extend his tariffs on imported steel.

Although Bush is widely expected to drop the tariffs -- a step that would play well here in the heart of steel-consuming country -- he limited himself to singing the virtues of his tax cuts and other economic policies.

The World Trade Organization has ruled the steel tariffs illegal, and the European Union has threatened to impose $2.2 billion in retaliatory tariffs if the U.S. duties remain in place on Dec. 10.

The decision presents Bush with a difficult political choice. When he imposed the tariffs, his political advisors saw them as an opportunity to build support in steel-making states such as Ohio, where he narrowly beat Al Gore in 2000, and Pennsylvania, where Gore won by an equally small margin.

“Caving in to the blackmail of the European economic community is not going to float well in Ohio, Pennsylvania, West Virginia, Illinois and the other industrial states,” Leo Gerard, president of the United Steelworkers of America, told reporters Monday. “And the last that I saw, there were no votes for the president in Europe.”

But the tariffs inflicted more economic damage than expected in important steel-consuming states such as Michigan and Wisconsin, where many automotive and metal-fabricating companies laid off workers and shifted production to other countries in response to the rising price they had to pay for steel.

Bush takes his economic message today to Pittsburgh, the nation’s steel-producing center. Among members of Congress from Pennsylvania, Ohio and other steel-making states, reaction to Bush’s expected decision to lift the contested tariffs ranged from disappointment to anger.

Sen. Arlen Specter (R-Pa.), who planned to join Bush in Pittsburgh, said he would try to persuade the president to keep the tariffs in effect.

“I think we have a very strong case,” said Specter, chairman of the Senate Steel Caucus. He said the WTO was mistaken when it found that a rising tide of imported steel had not been proved to have damaged the American steel industry.

“I believe it was established that foreign steel violated both national and international trade laws by subsidizing and dumping it in tremendous quantities,” Specter said.

Rep. Robert W. Ney (R-Ohio) said he was “very disappointed” that the administration, “which has exhibited such great courage in the past by standing up to international pressure, has instead chosen to back down in the face of threats by the World Trade Organization.”

Sen. John D. “Jay” Rockefeller IV (D-W.Va.) said in a statement that if Bush was planning to lift the tariffs, then he would break his promise to American steelworkers. “What makes me most angry,” Rockefeller said, “is that President Bush is turning his back on the Ohio Valley and American workers to appease foreign companies.”

At a $750,000 fund-raiser in Dearborn, Mich., as well as in an appearance at an automotive supplier here, Bush delivered his standard lines on international trade.

“If you’re good at something, we ought to try to find more markets,” the president told several hundred blue-collar workers as he called the American workforce the most productive in the world.

“We ought to be opening up markets for us to sell our goods. But the other thing I want you to understand is, we’re going to make sure it’s fair. We want the playing field to be level, so we can compete in a fair way.”

That formulation could foreshadow a decision that rescinded all or most of the tariffs while dangling a threat to crack down once more on foreign imports if, in Bush’s view, foreign companies resorted to unfair practices.

From Michigan, Bush went to Whippany, N.J., near Newark, for the day’s second reelection fund-raiser.

After today’s fund-raiser in Pittsburgh, he has another scheduled for Baltimore on Friday. The events are part of a tireless effort to amass $200 million for his reelection bid.

Michigan and Pennsylvania are expected to be key battleground states in the 2004 presidential election, and each has a huge economic stake in how Bush comes down on the steel-tariffs questions.

The president imposed the duties in March 2002. In the closely contested 2000 election, Bush lost both states to Gore, although by close margins -- 51% to 46% in both states.

In Michigan, Bush spoke to 500 ardent supporters at a luncheon reception in a hotel ballroom. He later rode in a motorcade to Canton and spoke at Dynamic Metal Treating International, a small business that manufacturers steel components and tools for the automotive and oil industries. Bush joined a half a dozen workers, including three from Spectrum Automation, on stools in a warehouse to promote his economic policies.

In a highly orchestrated event, each speaker briefly discussed his personal circumstances in a way that allowed Bush to tout his priorities, such as making the two across-the-board tax cuts permanent to imposing caps on medical liability awards.

The president seemed buoyed by a report that a survey of company purchasing managers showed an increase in planned purchases, which he said provided evidence that “the manufacturing sector of the American economy is coming back pretty strong.”

Then, in recognition that unemployment remained high, he quickly injected his standard caveat: “But my attitude is so long as we have one of our fellow citizens out of work and who wants to work, we’ve got a problem.”

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Times staff writer Richard Simon contributed to this report.