In the AFR of 14 November there was an excerpt from the editorial in The
Wall Street Journal of November 11 stating that as a result of the steel
tariffs domestic steel prices hiked by 30 per cent. The International Trade
Commission found that in their first year the levies inflicted a $US680
million hit on the US economy. The editorial continues:

“A study done earlier this year for the Consuming Industries Trade Action
Coalition went further. It found that the higher steel prices cost 200,000
American jobs and $US4 billion in lost wages from February to November
2002.”

“Those 200,000 jobs were more than the total number of people employed by
the steel industry itself. That’s one reason more than 200 companies and
organisations representing steel-consuming and related industries sent [US
President George] Bush a letter last month begging for relief.”

By any sensible measure it seems that Bush has shot himself in the foot big
time. Why did he do it?

My best guess was that he was trying to prove his credibility on trade
matters to Congress. Hence the steel decision and the hike in farm subsidies
demonstrated his ostensible commitment of the national interest. The reward
was the Trade Promotion Authority (TPA). The TPA, granted by Congress to the
President, allows the President to negotiate trade agreements without the
formal involvement of Congress until the final approval stage.

What will Bush do now? Who knows, I don’t!