Apples and pears from the Northwest are among the dozens of U.S. products that could face penalties in European markets starting next month as the result of a bitter trans-Atlantic battle over steel.
The 15-nation European Union says it will impose punitive duties on $2.2 billion worth of U.S. goods unless President Bush lifts tariffs he imposed in March 2002 on imported steel.
Bush's steel tariffs, ranging from 8 percent to 30 percent over three years, were intended to shield gasping U.S. steel producers from import competition while they restructured. But the World Trade Organization has twice decreed that the protections violate global trade rules.
The White House says it is studying its options, but Urban Eberhart, a Yakima Valley grower, says his family will bear the pain if the president doesn't lift the steel duties.
Northwest fruit producers, hurt by a glut in world production and the rise in popularity of apple varieties grown elsewhere, have seen this as their year to recover.
EU sanctions on U.S. fruit "will come right back to the grower," says Eberhart, whose family owns FruitFromWashington.com and grows 300 acres of apples and pears.
"The (EU) tariff would eliminate any of the small upswings in price and kill the recovery. It would leave more fruit on the domestic market and lower prices here."
The French, Belgians, British and other Europeans buy about 5 percent of the Washington apple crop, worth $15 million to $17 million annually. Europeans buy 11 percent of the pears grown in Washington and Oregon, an additional $7 million to $10 million a year.
The numbers are small in the context of $400 billion in annual U.S.-EU trade, but the EU hit list appears to have been put together to inflict a political cost on Bush if he chooses to stick with the steel tariffs.
Bush imposed duties on steel imports to help shore up his base in Pennsylvania, where he lost narrowly to Al Gore in 2000, and West Virginia, where he squeaked out a win. They also help producers in industrial Michigan and Ohio, union-heavy states rich in electoral votes.
The EU retaliation list targets:
- Citrus from Florida, where the 2000 election was decided and Bush's brother, Jeb, is governor.
- Apparel from North and South Carolina, battleground states that have been hit by the worst of the 2.7 million manufacturing job losses since Bush took office.
- Rice from Arkansas, expected to be closely contested.
"The Europeans clearly understand the electoral dynamic in the U.S.," says Joe Lockhart, former White House press secretary for Bill Clinton and now a steel industry consultant.
Washington and Oregon also featured close races in 2000 and could swing against Bush this time.
But Lockhart says the EU's pressure tactics could backfire with a president who is still resentful of European opposition during the Iraq war. "It's not clear to me they understand how averse President Bush is to being told what to do. I honestly believe the single-worst approach with this guy is to threaten him, particularly if you're European."