Return to Transcripts main page

American Morning

Bending on Steel

Aired December 02, 2003 - 09:37   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


SOLEDAD O'BRIEN, CNN ANCHOR: President Bush might be walking into a political blast furnace today. He's scheduled to attend a fund-raiser in Pittsburgh. The host? U.S. Steel. All this just as the president is said to be on the verge of repealing the tariffs he imposed 20 months ago to protect domestic steelmakers from foreign competition. The World Trade Organization says the tariffs are illegal, it's threatening more than $2 billion in sanctions.
Joining us this morning from Washington to talk about all of this, Cliff May. He is a former communications director for the Republican National Committee. Democratic strategist, Julian Epstein joins us as well.

Good morning to both of you. Nice to see you.

Hey, Cliff, let's begin with you. The president is supposed to make a decision this week on these steel tariffs. Some people have said he's in between a rock and a hard place on this one. You got to agree with that.

CLIFF MAY, FMR. RNC COMM. DIR.: Oh, yes, absolutely. Look, the thing about tariffs is, it protects the industry, it makes the price, in this case of steel, higher. People who sell steel like that. But it's bad for anybody who buys steel. Auto industry, for example, manufacturing in general. So any time you have tariffs, you reward one group, you punish another group. I'd say, in general, free trade is the best economic principle, getting away from all of the politics. And I think what he'll decide to do is get rid of the tariffs at end of the day.

O'BRIEN: Decide to get rid of the tariffs, a couple of questions out of that. One, what will be the explanation for putting them in in the first place 20 months ago, and two, huge political implications of that. Julian, why don't you first give me of a sense of what you think the president can say in order to reverse his position for 20 months ago before we take a stab at the second part?

O'BRIEN: Sure. Well, deciding to get rid of the tariffs at the wrong end of the barrel of a gun, he's being forced to, because the World Trade Organization declared them illegal. I think the imposition of the tariffs in the first place shows that President Bush puts politics over principle. He said he's for small government, he said he's for free trade, yet when it came to real important electoral votes, in the states of Ohio, Pennsylvania, and West Virginia, the president shows that he puts aside very quickly principle and good economics in favor of politics. He's looking for electoral votes there. This is a bad economic policy, as Cliff said, and I agree with him, the likely effect of this is to actually lose more jobs than save. The benefits are very, very short-term.

And again, we see this president isolated in the international community. The Europeans are very opposed to this. Our closest ally Tony Blair has indicated that he would retaliate, and simultaneously, we see free trade progress being halted with respect to the Western hemisphere free trade agreement. This is a big international failure for the president, and it's an attempt to cover up a bad economic policy that's lost 3 million jobs here at home.

O'BRIEN: Let's -- Julian has to I would hope be consistent. Right now, a number of Democrat candidates, notably Representative Gephardt, are in favor of continuing the tariffs. To do that, means going into a trade war with the Europeans. To do that means violating international law. To do that means that Mr. Gephardt and others are saying let's be unilateralists here, let's do what's good for the steel industry, never mind what our trading partners say, never mind happens to other industries around the country.

O'BRIEN: Forgive me for jumping in there, and I want Cliff to answer this. You can expect Dick Gephardt to raise this as a huge issue in the political campaign. What do you think the political fallout, the political impact will be of that?

MAY: You know, in a way, it's a no-win proposition for everybody involved, because when you impose tariffs, again, you help one group in one area, in this case you may help actually, but you certainly please the steel workers, but you hurt the auto workers. You will hurt in this case the farmers, the citrus farmers in Florida, because the retaliation from Europe will mean that oranges don't get exported. It's a political trap. It's a no-win proposition for all involved.

EPSTEIN: I'd like to give you more disagreement with your morning coffee. I actually agree with Cliff, the point that he makes about the negative impacts of protectionism is exactly correct. All of the products that use steel, the prices go up on that. The retaliatory effects in terms of what the Europeans and others would do would cause us more job loss than job savings.

The point here, though -- and if Democratic candidates are out there advocating for steel tariffs, I believe that they are wrong as well. The point here is the president's consistency, whether we can take the president at his word. He says he's for small government, he says he's for free trade. When this comes time to playing politics, when it comes time to try to get some electoral votes in a couple of states that are important, we see that this president will quickly dispense with the principle that he's articulated for many years.

O'BRIEN: That's going to be our final word. Gentlemen, we are out of time, and I appreciate your insight, both of you. I'm going to write this down, Julian said I agree with Cliff, so I'm marking that down right here.

EPSTEIN: Only on the substance, not on the policy.

O'BRIEN: He's already qualifying it. All right, you guys. Cliff May and Julian Epstein, nice to see you. Thanks a lot. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired December 2, 2003 - 09:37   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: President Bush might be walking into a political blast furnace today. He's scheduled to attend a fund-raiser in Pittsburgh. The host? U.S. Steel. All this just as the president is said to be on the verge of repealing the tariffs he imposed 20 months ago to protect domestic steelmakers from foreign competition. The World Trade Organization says the tariffs are illegal, it's threatening more than $2 billion in sanctions.
Joining us this morning from Washington to talk about all of this, Cliff May. He is a former communications director for the Republican National Committee. Democratic strategist, Julian Epstein joins us as well.

Good morning to both of you. Nice to see you.

Hey, Cliff, let's begin with you. The president is supposed to make a decision this week on these steel tariffs. Some people have said he's in between a rock and a hard place on this one. You got to agree with that.

CLIFF MAY, FMR. RNC COMM. DIR.: Oh, yes, absolutely. Look, the thing about tariffs is, it protects the industry, it makes the price, in this case of steel, higher. People who sell steel like that. But it's bad for anybody who buys steel. Auto industry, for example, manufacturing in general. So any time you have tariffs, you reward one group, you punish another group. I'd say, in general, free trade is the best economic principle, getting away from all of the politics. And I think what he'll decide to do is get rid of the tariffs at end of the day.

O'BRIEN: Decide to get rid of the tariffs, a couple of questions out of that. One, what will be the explanation for putting them in in the first place 20 months ago, and two, huge political implications of that. Julian, why don't you first give me of a sense of what you think the president can say in order to reverse his position for 20 months ago before we take a stab at the second part?

O'BRIEN: Sure. Well, deciding to get rid of the tariffs at the wrong end of the barrel of a gun, he's being forced to, because the World Trade Organization declared them illegal. I think the imposition of the tariffs in the first place shows that President Bush puts politics over principle. He said he's for small government, he said he's for free trade, yet when it came to real important electoral votes, in the states of Ohio, Pennsylvania, and West Virginia, the president shows that he puts aside very quickly principle and good economics in favor of politics. He's looking for electoral votes there. This is a bad economic policy, as Cliff said, and I agree with him, the likely effect of this is to actually lose more jobs than save. The benefits are very, very short-term.

And again, we see this president isolated in the international community. The Europeans are very opposed to this. Our closest ally Tony Blair has indicated that he would retaliate, and simultaneously, we see free trade progress being halted with respect to the Western hemisphere free trade agreement. This is a big international failure for the president, and it's an attempt to cover up a bad economic policy that's lost 3 million jobs here at home.

O'BRIEN: Let's -- Julian has to I would hope be consistent. Right now, a number of Democrat candidates, notably Representative Gephardt, are in favor of continuing the tariffs. To do that, means going into a trade war with the Europeans. To do that means violating international law. To do that means that Mr. Gephardt and others are saying let's be unilateralists here, let's do what's good for the steel industry, never mind what our trading partners say, never mind happens to other industries around the country.

O'BRIEN: Forgive me for jumping in there, and I want Cliff to answer this. You can expect Dick Gephardt to raise this as a huge issue in the political campaign. What do you think the political fallout, the political impact will be of that?

MAY: You know, in a way, it's a no-win proposition for everybody involved, because when you impose tariffs, again, you help one group in one area, in this case you may help actually, but you certainly please the steel workers, but you hurt the auto workers. You will hurt in this case the farmers, the citrus farmers in Florida, because the retaliation from Europe will mean that oranges don't get exported. It's a political trap. It's a no-win proposition for all involved.

EPSTEIN: I'd like to give you more disagreement with your morning coffee. I actually agree with Cliff, the point that he makes about the negative impacts of protectionism is exactly correct. All of the products that use steel, the prices go up on that. The retaliatory effects in terms of what the Europeans and others would do would cause us more job loss than job savings.

The point here, though -- and if Democratic candidates are out there advocating for steel tariffs, I believe that they are wrong as well. The point here is the president's consistency, whether we can take the president at his word. He says he's for small government, he says he's for free trade. When this comes time to playing politics, when it comes time to try to get some electoral votes in a couple of states that are important, we see that this president will quickly dispense with the principle that he's articulated for many years.

O'BRIEN: That's going to be our final word. Gentlemen, we are out of time, and I appreciate your insight, both of you. I'm going to write this down, Julian said I agree with Cliff, so I'm marking that down right here.

EPSTEIN: Only on the substance, not on the policy.

O'BRIEN: He's already qualifying it. All right, you guys. Cliff May and Julian Epstein, nice to see you. Thanks a lot. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com