The Wall Street Journal reported that the protectionist move will have the biggest impact on the semicolonial countries like Brazil and south Korea, which...don't have the power or political will to stand up to Washington, given their need to export to the vast U.S. market." Russia is among the workers states whose steel exports will also be affected by the moves.

Steel from Canada, the second largest exporter of finished steel mill products to the United States, and Mexico, the fifth largest exporter, as well as several other Third World countries, is exempted.

The tariffs, which take effect March 20, were described by the Journal as "the most protectionist move of any U.S. president in at least two decades." They will in effect bar many types of imported steel from U.S. markets, setting the stage for an increase in steel prices of as much as 10 percent.

"Officials in South Korea and Brazil expressed dismay at the Bush steel tariffs," another Journal article said, "but made clear that they had little desire to pick a fight with the U.S."

At a March 11 meeting of the Inter-American Development Bank, Brazilian president Fernando Henrique Cardoso said the U.S. tariffs were not in the spirit of the Free Trade of the Americas Act, an agreement being pushed by Washington to open up Latin America and the Caribbean to further penetration of goods and capital from the United States.

"The path to strengthening multilateral trade is not the path of protectionism," Cardoso said. "And it is certainly not the path of discretionary antidumping or agricultural subsidies used in scandalous proportions to impede free competition."

The Brazilian Steel Institute, an employers' organization, has proposed the imposition of tariffs on some finished U.S. steel products. Similar demands were raised by a steelworkers' demonstration organized by leaders of the trade union federation Força Sindical, held March 12 in front of the U.S. consulate in São Paulo.

U.S. trade representative Robert Zoellick brushed off the demand, noting that the Brazilian government has not been receptive to taking such a step. He added a threat, stating that the action "would create a further sense of market uncertainty for companies thinking about doing business in Brazil. Brazil needs to show stability to draw investment."

Despite a harsh reaction from Washing–ton's imperialist rivals in Europe, the U.S. government "faces mostly rhetorical pressure" so far, wrote the Journal after the smoke had cleared from President George Bush's March 5 announcement.

Tariffs on steel imports from Europe affect about 3 percent of the total production by European steelmakers. The biggest impact of Washington's new tariffs on the European imperialist powers could be a rise of imports to the continent. The European Commission, the executive arm of the European Union (EU) , pledged to steel companies that imports will be closely monitored and action taken to block any surge in steel being sold.  
 
European and U.S. steel trusts
The U.S. and European steel industries are dominated by a few large trusts, and a further consolidation is under way. Three producers dominate the European market: Corus, a combination of Dutch and British steelmakers; ThyssenKrupp of Germany; and Arcelor, a pending combination of Usinor of France with Arbed of Luxembourg and Aceralia of Spain. With the consolidation of the merger, Arcelor will be the world's largest steelmaker, producing 54.6 million tons of steel a year, one-third of the entire output in Europe and more than half that of Japan. In carrying out this restructuring European steel producers have cut jobs by one-third to about 277,000 workers.

In the United States, the drive for protectionist measures by the steel trusts, and a demand on the U.S. government to take over the pension and health care costs of 600,000 steel workers, is also combined with restructuring. The U.S. Steel Corporation is seeking to buy up six major companies that together account for 85 percent of U.S. steel production.

Washington agreed to impose the tariffs despite the fact that U.S. steel imports have fallen 33 percent since 1998. According to the American Iron and Steel Institute, U.S. steel imports declined to about 30 million tons last year after reaching nearly 40 million in 1998. Almost one-third of those imports came from Canada and Mexico.

The crisis in the steel industry is rooted in capitalist overproduction, where too much steel is being produced to be sold at a profit. Some estimates put the total annual overcapacity as high as 200 million tons. The day after Bush's announcement, National Steel declared bankruptcy, becoming the 32nd domestic steelmaker to take this route in the past four years.  
 
EU reaction
EU officials said the tariff could cost European steelmakers as much as $2 billion a year in lost trade. They are demanding immediate compensation for this amount from the United States in the form of reduced trade barriers on other products. EU officials are also threatening to impose up to $4 billion in sanctions on U.S. exports in a dispute over a U.S. corporate tax break. The EU has launched two legal challenges to the steel tariffs before the World Trade Organization.

British prime minister Anthony Blair called the action "unacceptable, unjustifiable, and wrong." He added that there was no "linkage" between the trade issue and London's backing of the imperialist assault in Afghanistan, emphasizing that the two powers had a "mature relationship." The Labour Party government's secretary of trade and industry accused the United States of "trying to dump their problems on the rest of the world."

"Although EU steelmakers are angry at Washington," noted a Journal article, "they seem content to let trade officials try to reverse the U.S. decision at the World Trade Organization--a process that could take two years--rather than push for immediate retaliation. 'A trade war is no use to anybody,' says [Acelor spokesman] Mark Schonckert."

Elsewhere, the Australian minister of industry stated that the government there was "not going to lie down on this. The Americans are doing what they always do, they put their own interests first."

The Russian Foreign Ministry issued a statement saying that the tariffs "could have a serious impact on the atmosphere of Russian-American relations." The tariffs affect about a third of Russia's steel exports and will cost the country $400 million a year in lost revenue, according to Russian government officials. Russia is the world's fourth-largest steel producer, and steel makes up a 10th of its total exports to the United States.  
 
Moscow bans U.S. poultry imports
Several days after Washington's steel import ban went into effect, Moscow, citing concerns over food safety, banned all U.S. poultry sales to Russia. U.S. farmers export more than $600 million worth of poultry products to Russia annually. This amounts to almost half of U.S. poultry exports worldwide and a fifth of all U.S. exports to Russia.

Washington's steel import tariffs are beginning to have a domino effect upon other nations as well. A Russian government commission has recommended placing import duties of nearly 32 percent on galvanized steel plate from Ukraine and Kazakhstan.

There have been some disagreements voiced within U.S. ruling circles over the tariff decision. Testifying before the Senate banking committee, Alan Greenspan, chairman of the Federal Reserve, said, "I understand the difficulties that any president has in trying to come to grips with our trade laws. I happen not to agree with the particular judgment."

Treasury Secretary Paul O'Neill told an off-the-record event of the Council on Foreign Relations March 13 that he "was sticking to his long-held position that imposing tariffs risked the nation's interests and the world's leader in promoting free trade," reported the New York Times. O'Neill has been pushing an effort to negotiate deals with other steel-producing countries to enact "voluntary" reductions in steel production in order to shore up prices on the capitalist market.

Spokespersons for various domestic industries that are big users of steel, including manufacturers of cars, industrial equipment, and appliances, warned that the steel tariff will increase their raw material costs. Speaking on behalf of a coalition of steel-using industries, Robert Crandall, from the Brookings Institution, called Bush's plan "a damaging economic blow that could delay the U.S. economy's recovery by increasing the cost of steel-made products like automobiles, cutting the demand for them and setting a dangerous precedent that could cause tens of thousands of layoffs in steel-using firms."  
 
 
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