President Bush should not have lifted the steel tariffs. The main reason Europe wanted the tariffs lifted is because they realize there is an oversupply problem in the global steel industry, and that if the United States didn’t allow cheap steel to be dumped in its market, it will likely be dumped in Europe’s market. For Europe to vilify the United States for taking a stance they would ultimately advocate for themselves is the epitome of hypocrisy.
According to the Wall Street Journal (3-31-03), even at 100% capacity, American steel companies can only produce 75% of the steel America consumes, so foreign producers already have a nice slice of America’s market built in. If the United States believes it is unnecessary and unwise because of economic or national security reasons of to give a greater share of our money and our markets to foreigners, that should be up to us to decide - not for Europe, the WTO, or anyone else.
Our country’s ability to make and execute our own decisions, thereby controlling our own destiny, is what being a country founded upon independence is all about, and is the only authentic reason Americans can celebrate July 4th.
If all other countries have to do is threaten trade wars to get us to reduce protective or revenue tariffs, we ought to be threatening most countries with trade wars since we have trade deficits with most countries, and they’ll reduce import tariffs too, right? Until that happens, free traders’ claims that we must continually sacrifice America’s markets to foreigners in order to gain market share in theirs – a strategy that has yet to work for three decades – can only be seen as baseless, hollow rhetoric.
However, the fact is that America’s threat of trade retaliation over the last several years has been likened to being about as scary as walking through a zoo of caged lions. Some high-ranking government officials don’t take threats by the EU serious either. House Speaker Dennis Hastert went on record in October saying "I'm not going to be intimidated by the Europeans."
And yet when Europe threatens, the U.S. caves in, revealing that whatever steel America has, none of it is located within the spines of certain politicians. America didn’t care what France and Germany thought about the military war in Iraq where the potential losses are fatal, and we should be even less concerned with what they think when the losses are strictly economic.
Europe depends more on America than the other way around, so they are the ones that have the most to lose in a trade war, not the United States. Just like a poker player who doesn’t know when he has a winning hand, if America doesn’t realize when it has the upper hand in a theoretical trade war, our manufacturers can’t expect to win the lion’s share of the global consumer market.