Guess who Bush is protecting?
Slaps tariffs on steel imports
By Milt Neidenberg
The ailing steel industry, inundated with 31 bankruptcies in
recent years, received a shot in the arm from President George
W. Bush on March 5. He issued sweeping tariffs and quotas to
protect steel bosses from their global competitors. Owners of
integrated steel plants that convert iron ore into finished
steel are the beneficiaries of a protectionist policy that has
far-reaching economic and political consequences.
It is too early to determine the extent of the protectionist
fallout. But it is clear that although the names of the "good
old boy" Morgan-Rockefeller steel network of a century ago may
have changed, its conservative, rightwing corporate mentality
is still alive.
Bush imposed a stiff three-year, 30-percent tariff on the
main products of integrated steel plants. Other products, such
as stainless steel, face tariffs of 8 percent to 15 percent.
The immediate result is a dramatic increase in the price of
steel.
Catering to this sector, President Bush has provoked a trade
war with the same capitalist allies he has been courting for
his expanding war against Afghanistan and other regions. The
European Union and its steel monopolies are furious.
They now export more than 6 million tons of finished steel
products to the U.S. The projected trade barriers could cost
the integrated steel corporations more than $2 billion
annually. Steel monopolies like Thyssen/Krupp of Germany, the
Anglo-Dutch Corus Group, South Korea's Pohang Iron & Steel,
and others took heavy hits in the stock market.
Japan, South Korea, Russia, Brazil and others seriously
affected are angry. They are assessing retaliatory options.
Even British Prime Minister Tony Blair, Bush's willing junior
partner in the war drive, characterized the move as
"unacceptable and wrong."
A key question therefore is: Will the U.S. war allies,
particularly the European Union, raise tensions by applying
sanctions--such as closing off tax benefits given to U.S.
companies or retaliating against U.S. products? The 15-nation
union has already announced it will file a two-part complaint
with the World Trade Organization.
Competition will intensify
Capitalist overproduction has created a glut in the global
market. Brutal competition will intensify among the giant steel
producers as they fight for hegemony of markets and profits.
Even U.S. non-union mini-steel mills, like Nucor, that compete
with the integrated steel plants have joined the fray. They can
enjoy the protection of high tariffs and cheaper labor costs,
while not being responsible for worker pensions and health
costs that are a burden to Big Steel.
To add to this crisis, the tariffs raised tensions between
the integrated steel plants and domestic users who fabricate
the steel for consumption. The costs of the latter will rise
dramatically as tariffs kick in. These steel users may move
their operations abroad to avoid the increases, eliminating
many thousands of jobs, or pass their costs in price increases
on to workers and consumers--or both.
They constitute a broad array of powerful forces that
include the Big Three auto giants, their suppliers,
construction companies, and manufacturers of a multitude of
consumer products and household necessities, like refrigerators
and stoves.
Even steel-producing countries like Brazil that are now shut
out of the U.S. market have threatened to retaliate. This has
special significance in regard to the Free Trade Area of the
Americas, where the U.S. wants to increasingly squeeze Latin
America and the Caribbean in its economic clutches. Bush's
imperialist "free trade" policies may have hit a bump in the
road.
So what was in it for the Bush administration that Bush
would weigh in on the side of the protectionist wing of his
base? Is his popularity finally waning as the World Trade
Center disaster recedes? Is he worried about domestic support
for his decision to widen the war? Is he concerned about the
November 2002 mid-term elections and therefore wooing the
steelworkers' union, the USWA, which supported him
unconditionally in the tariff campaign?
The union joined the campaign of Bush and the steel tycoons
to raise protectionist tariffs. The USWA mobilized thousands of
its members, held marches and rallies, lobbied politicians and
communities, all in the hope that Bush and the steel bosses
would support its effort to save jobs and finance the benefits
currently in danger.
However, Bush has rejected any bailout for retirees who gave
a lifetime of sweat and blood toiling in the smokestack
industries. Now the steelworkers will be hung out to dry by a
Congress--Democrats and Republicans--who will put the retirees'
issue on a back burner. The Democratic Party joined the
protectionist chorus.
The AFL-CIO leadership is facing a critical moment. The
expanding war, military budget and "anti-terrorist" campaign
are eating up wealth and resources desperately needed by
steelworkers and labor in general. And the recession has
continued to take its toll on the masses of working people.
Millions are unemployed, particularly in the industrial
sector. Millions more are without decent health care. Hunger
and homelessness are rising.
It's time for the AFL-CIO to review the full significance of
the Bush administration's protectionist tariff hike. The steel
industry is in deep crisis. Only a few will survive.
The day after the higher tariffs were imposed, National
Steel--the fifth-largest steel corporation, Japanese-owned but
located in Indiana--declared bankruptcy. This threatens the
jobs of 7,500 steelworkers. Bethlehem Steel, the second-largest
steel corporation, is now in bankruptcy. LTV, a Midwest giant,
has been sold off to a corporate speculator.
Other bargain hunters will exploit the workforce mercilessly
or sell off the physical assets of the plants. The greedy steel
barons driven by the profit motive are bloodsuckers on a
potentially healthy industry capable of producing more than 100
million tons of steel annually.
A spark of struggle could turn it around
Steel workers and their allies need a plan to revive the
industry--a strategy to take over their plants. USWA President
Leo Gerard wouldn't initiate it, but union leaders would have
to support it.
The rank and file have made the maximum sacrifices to keep
the plants running. So much of their labor is invested in the
plants that they have the right to legally declare that they
are the principal creditors, particularly in the bankrupt
plants. They have the skills and the know-how to make the
plants run.
Occupying the plants could save their jobs, their pensions
and health benefits.
There is a desperate need for steel products, particularly
in war-torn, impoverished countries, as well as here in this
country. The potential for international solidarity will rise
as steelworkers abroad face a similar crisis from exploiting
steel magnates.
A spark of struggle, such as taking over a steel plant, even
one in bankruptcy or on "hot idle"--a closed plant with its
furnaces still lit--would be timely and could energize this
development.
Reprinted from the March 21, 2002, issue of
Workers World newspaper
This article is copyright under a Creative
Commons License.
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