The WTO approved sanctions on the US for a little known trade regulation called the Byrd Amendment. The Byrd Amendment allows the US to impose "anti-dumping" tariffs on goods that are sold here at low prices (dumping=pricing below cost). By itself that would not be quite as objectionable to the WTO, but the Byrd Amendment goes one step further in giving the proceeds of those tariffs (that is, tax revenue) to the American companies competing with the offending foreign firms.
Tariffs are seldom a good thing for the economy as a whole, but the benefits are concentrated in the hands of a few while the costs are diffused over everyone. This makes them politically difficult to remove. How much more so when the benefits are so tangible and physically handed over from government to firm? Sorry, but I don't see how giving corporations a cut of our spending on imports (isn't that what tariff revenue is?) will help them in the long run. It's windfall profit. It's not going to change their behavior.
The retaliation will be significant and could come early in 2005. Not that we haven't had warning. According to the article linked above, the US has had 2 years to comply.
The major beneficiary of the policy has been steel (which means that anyone who buys steel in their manufacturing process has been subsidizing the troubled US steel industry , but pasta producers and candlemakers have also benefitted.
Ah, the candlemakers. Read here, please. This one's over 150 years old. Time to move on, Congress.
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