Bush to back down on steel tariffs

PRESIDENT George Bush could make a humiliating climbdown this week by dropping or scaling back controversial tariffs protecting US steel producers.

The measures, adopted last year, were ruled illegal on 10 November by the World Trade Organisation.

The European Union has drawn up a list of retaliatory measures that it will impose on US products should Bush refuse to abandon the steel levies.

The US argued that the protective, three-year measures would give its steel industry a chance to reorganisein the face of rising international competition.

But critics said they flouted global trade rules and were designed to protect US jobs - and Republican votes - in regions critical to Bush's reelection drive next year.

Since the WTO ruling, US officials have said the steel tariffs had 'served a useful purpose' suggesting that Bush could soon remove or dilute them.

The US may retain a scheme licensing US steel importers, allowing officials to check a careful eye on the volume of the metal entering the United States.