'The President blinked,' Leo Gerard charges

The following is the full text of a statement on George W. Bush's lifting of steel import tariffs, as released today by the United Steelworkers of America:

****************** USWA Condemns Lifting of Tariffs as "Capitulating to European Blackmail" FOR IMMEDIATE RELEASE December 4, 2003

Derides Administration's failure to defend U.S. trade laws or use their full force to forestall surrender

Pittsburgh, Pa. - The United Steelworkers of America (USWA) today condemned President Bush's decision to lift steel tariffs as "clear evidence of capitulating to European blackmail and a sorry betrayal of American Steelworkers and steel communities."

"In his rush to appease the Europeans and Japanese," said USWA President Leo W. Gerard, "Mr. Bush willfully ignored the fact that damage to the American steel industry and American steel communities continues to this day, even with the tariffs in place."

Gerard cited five major bankruptcies that have occurred since the tariffs have been imposed, raising the total number of bankruptcies to 42 since the steel crisis began in 1998.

During the crisis 17 of these companies have liquidated, wiping out the healthcare benefits of more than 208,000 Steelworker retirees.

"The President's complete lack of mettle in calling the WTO's bluff ignores the continuing damage being done," Gerard said.

"His unwillingness to defend U.S. trade laws is an affront to all American workers, but it's especially insulting to workers at Weirton Steel in West Virginia, Rouge Industries in Michigan, WCI Steel and Republic Engineered Products in Ohio, and EVTAC Mining in Minnesota, all of whom have seen their companies go bankrupt while the tariffs have been in place."

The USWA also condemned the administration for its refusal to challenge the WTO's ruling, which it could have done under Section 129 of U.S. trade laws.

Under this provision, the President could have referred the WTO's decision to the International Trade Commission (ITC). The WTO would then have been obliged to withhold sanctions while the ITC considered how it might address the objections to the tariffs raised by the Europeans and Japanese.

"Our trading partners obviously engaged the Administration in a game of guts poker," Gerard said. "Instead of telling them to 'bring it on,' the President blinked."

"It is particularly galling for the President to have capitulated," he said, "when the Europeans have not even agreed to lift the safeguard protections on their steel markets that were imposed in the wake of U.S. tariffs being implemented."

Gerard said the President's decision today closed the door on the Section 129 option, which he had requested jointly with U.S. Steel Chairman and CEO Thomas J. Usher, Wilbur Ross, Chairman and CEO of International Steel Group, and Nucor CEO Dan DiMicco in a letter to Bush on Tuesday.

The USWA termed the Administration's call for monitoring and licensing "public relations fig leaves which, in and of themselves, acknowledge the very real possibility that the global overcapacity in steel – which the Administration has done nothing to arrest – will lead to more surges and dumping."

The USWA said that lifting the tariffs would have especially dire consequences for hundreds of thousands of Steelworker retirees who have already lost their healthcare benefits, and thousands more who could lose theirs if the more recent bankruptcies lead to liquidations.

"The President's steel plan urged us to work for a consolidation in the industry," Gerard said. "That consolidation is far from complete, and the business plans that were developed for the consolidation that has already taken place were based on groundbreaking negotiations our union spearheaded to make those purchases possible, and on the prospect of a three-year tariff.

"A major success in those negotiations was the creation of Benefit Trusts that would direct some of the industry's profits toward helping to pay at least some of the costs of healthcare for retirees who had their benefits wiped out by the liquidation of companies they had worked for.

"The President's decision to lift the tariffs not only puts future industry profits at risk, it minimizes the chances that more than 200,000 retirees will see their skyrocketing healthcare costs defrayed by the Benefit Trusts.

"It is deeply disturbing," Gerard said, "that the President was unwilling to stand down the Europeans, because steel is just the canary in the mine shaft. Failure to stand by our trade laws will throw open the door for more American manufacturing jobs to take a hit – on top of the 2.4 million that have already been wiped out."

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