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By Doug Palmer
WASHINGTON, Sept 25 (Reuters) - A top U.S. official on Wednesday rejected calls for the Bush administration to rescind its controversial steel tariffs, saying they were still needed to encourage consolidation in the U.S. steel industry.
U.S. Commerce Under Secretary Grant Aldonas also said the tariffs were necessary because many trading partners remained unwilling to eliminate government subsidies and other "unfair" trading practices that benefit their steel sectors.
Asked if the Bush administration was considering rescinding the steel tariffs, Aldonas said: "No, because the process of adjustment we're trying to encourage is incomplete. No, because the sort of things we've asked our trading partners to do, they have not fulfilled."
The vigorous defense of the tariffs, imposed by U.S. President George W. Bush earlier this year, came as the European Union appeared to be backing down from a threat to retaliate.
According to a European Commission document seen by Reuters in Brussels, Belgium, the EU's executive branch has recommended against going ahead with sanctions "at this stage," while vowing to vigorously pursue its complaint against the U.S. steel duties at the World Trade Orgainization.
Earlier this month, the EU joined forces with Asian nations to call on the United States to immediately eliminate the tariffs, which range from 8 percent to 30 percent in ten different categories of steel products.
At a hearing in the U.S. House of Representatives Wednesday, Small Business Committee Chairman Don Manzullo, an Illinois Republican, said the tariffs were costing more jobs in the steel consuming industry than they were saving in the steel sector.
"This policy is obviously doing more harm than good, and I strongly urge the president to rescind the tariffs as soon as possible. We can't afford to lose any more jobs," he said.
The committee heard testimony from a number of small manufacturers who said they had been hurt by the tariffs.
"The steel tariffs have brought us to the point that we are now seriously considering moving some of our production to Mexico," Chris Dowding, president of Dowding Industries, which supplies products to diesel and automotive producers. "That could mean the loss of 150 jobs in mid-Michigan."
Aldonas said many trading partners who criticized the United States for imposing the "safeguard" tariffs are unwilling to seriously consider reforming their own steel policies.
"They're willing to complain about U.S. action (taken) under the unfair trade laws, but when you ask them to step and eliminate the underlying unfair trade practices, most of them take a walk. They don't want to actually engage seriously," Aldonas said during a break in a congressional hearing.