In 2001 Congress was not in the mood to grant that authority. Democrats were against anything that would either expand trade (and thus, in their opinion, threaten American jobs) or help Bush, whose election many considered illegitimate. GOP control of Congress was very thin, and with the economy in recession many Republicans were skittish about voting to promote trade if it might be seen as threatening domestic jobs.
Republicans in the steel-producing districts of Pennsylvania, Ohio, and West Virginia were especially fearful of electoral retaliation. They demanded that Bush do something to help the steel industry as the price for their vote on trade-negotiating authority.
In June 2001, Bush initiated an investigation by the U.S. International Trade Commission into whether the steel industry was being injured by imports. It was virtually preordained that the commission would find such injury, because of the low legal threshold for such a determination. The commission did indeed find injury in December. Under the law, President Bush had until March to decide what actions he would take to protect the steel industry.
At the same time, Republicans from agricultural areas were complaining about low farm prices and demanding more subsidies, even though Bush had promised to move toward a more market-based agricultural system during the 2000 campaign. It was vital Bush do the right thing on the 2002 agriculture bill because the whole point of the trade negotiations, known as the Doha Round, was to remove subsidies for agriculture, which cost taxpayers in the industrialized countries dearly while making it impossible for farmers in the developing world to compete and better themselves.
In both cases, Bush made exactly the wrong decision.
George W. Bush, Man of Steel
Only one justification for trade protection has widespread support among economists: to preserve “infant” industries, those just getting started and competing against well-established rivals. So it is ironic that the American industry that has sought and received the most protection over the years is not a new one, such as electronics or software, but the quintessential old industry: steel. It is always just on the verge of being competitive, the industry swears, and only needs a little breathing space to invest and modernize. Then tariffs and quotas can be relaxed.
But that day never comes. Since 1969 the U.S. steel industry has received continuous protection in one form or another. These barriers have cost U.S. consumers between $104 billion and $175 billion more (in constant 2006 dollars) for products made with steel, such as automobiles and appliances.
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