and hey, speaking of the EU

[sisyphusshrugged]

Remember when the free traders of the current administration bowed to the reality that their hard line doesn't play in rust belt states and slapped on that there tariff on steel?

Hey, so does Europe.

Florida citrus growers could soon be squeezed, Louisiana rice farmers boiled, California nut producers shelled and North Carolina pajama-makers fleeced.

They would be just a few of the victims caught in the crossfire of an increasingly bitter trade fight between the European Union and the United States over steel. Free-trade proponents fear the biggest victim of all could be the United States' half-century of support for expanding global commerce.

"In this situation you could trigger a perfect storm of unintended but very serious consequences," says Fred Bergsten, head of the Institute for International Economics, a Washington think tank.

The prospect of a tit-for-tat trade war has increased with the decision by a World Trade Organization appeals panel that the United States violated global trade rules by imposing tariffs of up to 30 per cent on various types of foreign steel imports in March 2002.

If the administration does not remove the steel tariffs by mid-December when the WTO ruling becomes final, the EU says it will retaliate by imposing tariffs of up to 30 per cent on $2.2 billion of American exports to Europe.

The 15-nation EU carefully chose its target list to inflict significant political pain in key battleground states in next year's presidential election. It put President George W Bush in the uncomfortable position of either withdrawing the tariffs and angering steel producers such as West Virginia, Pennsylvania, Ohio and Indiana or offending a host of states whose industries will be hit by the Europeans' penalty tariffs.

"The EU drew up its list with diabolical cleverness to target products from a number of states that will be in play in the 2004 presidential race," said Brink Lindsey, a trade specialist at the Cato Institute think tank.

The target list runs the gamut from citrus products, aimed at Florida orange juice and Texas grapefruit, to rice, which would hit states such as Louisiana and Arkansas.

Farmers in California, the biggest electoral prize of all, would feel the sting of the EU tariffs on such products as nuts, dates, figs, avocados and grapes.

Other foods targeted for tariffs are various types of apples, pears, apricots, cherries and frozen and dried vegetables. In a strike at such big textile and apparel manufacturing states as North and South Carolina, Georgia and Alabama, a wide array of clothing has been targeted, including underwear, overcoats and pajamas.

The EU list is eclectic, with other targeted items ranging from toilet paper to writing paper and from fire engines and hay balers to yachts and canoes. A large number of U.S.-made steel products were included to strike at the industry that generated the trade fight in the first place.

By the EU's accounting, the products targeted total $2.2 billion in annual US exports to the European trading bloc, less than two per cent of the $143.7 billion in American goods shipped there last year.

However, for the particular industries targeted, the impact could be significant in terms of lost sales given that this country's global competitors will not face the higher tariffs.

And so does Japan.

The government intends to raise tariffs on steel, benzine, textiles, leather products and other imports from the United States as a retaliatory measure if Washington does not lift its steel import curbs, government officials said Tuesday.

The move follows the World Trade Organization's ruling Monday that the U.S. "safeguard" steel import curb violates WTO rules.

It is likely that tariffs on steel and benzine will be raised by 30 percent and those on textiles and leather products by 5 percent.

The European Union already has decided on retaliatory measures against the United States regarding the safeguard. China, Norway and Switzerland also are considering raising tariffs on U.S. imports. If the United States does not cancel its steel import curbs, the situation may develop into a major trade conflict, with four countries and one region taking retaliatory measures.

The WTO approves punitive tariffs as a countermeasure. Japan's planned tariffs in the latest case are expected to amount about 10.7 billion yen per year.

The proposal will be submitted to the Nov. 26 meeting of the Finance Ministry's Council on Customs, Tariffs, Foreign Exchange and Other Transactions, after which the government plans to report to the WTO by the end of this month. If the United States does not lift steel import curbs by the end of the year, the government plans to start imposing the punitive tariffs on U.S. imports early in the new year.

In the abstract, there's a certain rough justice in the rest of the world using tactics as political and amoral as those they're responding to from the Bush administration.

On the other hand, we've lost enough jobs already.

Even in swing states.