The Washington Post broke the story yesterday that the Bush Administration will announce that the controversial steel tariffs enacted 20 months ago will be dropped. Since then White House Press Secretary Scott McClellan has denied that a decision has been made, but it is looking likely that the Bush Administration will decide against the tariffs this week.
The tariffs were the biggest policy mistake of the Bush Administration. They went against his free trade beliefs, they threatened an expensive trade war with Europe, and they did little to help the steel industry, instead creating a ripple effect that caused thousands of Americans to lose their jobs. Moreover, the manufacturing sector is already in recovery from its recent lows as demand has picked up. Most of the losses in manufacturing came from overcapacity, technological change, and lack of demand rather than foreign competition. Removing the tariffs will only help the economy by removing an artificial negative stimulus.
Bush should never have enacted those tariffs, but it’s not too late to do the right thing and repeal them.