Bush Is No Hypocrite.(George W. Bush, tariffs on steel imports anger trading partners)(Brief Article)

In the annals of trade there haven't been many reversals quite like this. George W. Bush from the start has billed himself a free trader. He led the way to a new round of world-trade talks at Doha, Qatar, in November. Now he looks like a total hypocrite after slapping tariffs of up to 30 percent on steel imports last week. Outraged trading partners in Europe and Japan claim Bush sold out his principles to placate steel voters in Midwestern mill states. His critics worry that Bush may have touched off a "trade war" that will derail global economic recovery.

None of this is quite fair. First, a trade war occurs when a tiff over a single product spills over into other industries. But the United States and its partners are already in dispute over beef fed with growth hormones, European aircraft subsidies and U.S. export subsidies, among other things. No broader war has developed. Few believe this one will go beyond steel either. "Instead of a trade war," says Ben Goodrich of the Institute for International Economics, "it's going to be follow the leader. Everybody's going to increase protection of their own [steel] markets."

The damage will be limited. Trade in steel has been a nightmare of nationalism for 100 years, perhaps the most heavily protected industry there is. Historically, the United States is among the lesser offenders. It's the only large rich country that's ever been a major steel importer, and it has been one for 40 years. Europe, Japan and other big steel exporters have less free-trade ground to stand on than Bush. That will not, and should not, stop any of them from challenging the Bush tariffs before the World Trade Organization. But it will likely prevent them from escalating the fight.

The European legal case looks pretty strong. Bush based his tariffs on well-established trade rules that allow nations to temporarily protect industries and communities hard hit by a sudden spike in imports. There is no question that American steel mills were devastated by a 40 percent jump in imports following the 1997 crash of Asian and Russian economies. Thirty U.S. mills are now in bankruptcy. The legal problem for Bush is that these old U.S. mills have been in decline for decades, owing ...