Bush steel exemptions aimed at preventing trade war

WASHINGTON -- The Bush administration, seeking to head off a trade war with its major allies, announced Thursday it had decided to exclude another 178 steel products from protective tariffs imposed in March to give the battered domestic industry time to reorganize and become more competitive.

The latest batch of exclusions brought to 727 the number of products the administration has decided to exempt from the tariffs, which ranged as high as 30 percent.

U.S. steel companies have complained that the administration was granting too many exclusion requests, but the announcements have been greeted with approval from major trading partners, including the 15-nation European Union and Japan.

Those countries had threatened retaliatory tariffs of their own, contending that President Bush's action last March violated World Trade Organization rules. However, as the exemptions have been granted, the EU and Japan have both backed off threats to impose immediate sanctions although they are continuing to pursue a WTO case against the U.S. action.

The administration said the latest group of exclusions was the "seventh and final' group to be granted exemptions from the tariffs this year. However, the administration said it would allow steel consumers to make new requests beginning in November for further exclusions. It said this review would be completed in March of next year.

The 178 products covered in the final group for this year covered a broad range of steel categories including plate, hot-rolled, cold-rolled, corrosion-resistant, tin mill and stainless.

A government fact sheet said the steel being exempted from the tariffs was produced in a number of countries.