US President George W. Bush is expected to announce plans within days to scrap or roll back tariffs on steel imports to head off retaliation from European and Asian trading partners, congressional and industry sources say.
Ending the tariffs 16 months ahead of schedule to comply with a World Trade Organization (WTO) ruling could spark a political backlash against Mr Bush in next year's presidential election in the pivotal steel-producing states of Ohio, Pennsylvania and West Virginia.
But key Bush advisers concluded that the tariffs were causing more harm than good and that lifting them would boost Bush's standing with small- and medium-sized Midwestern manufacturers, another important constituency.
The White House insists no decisions have been made since the WTO issued a final ruling this month that the tariffs violated international trade rules.
But Bush aides have raised expectations the tariffs will come down, saying they have already served much of their purpose by giving the steel industry time to consolidate operations and become more competitive after a string of bankruptcies.
Steel importers said they are increasingly confident Bush will end the tariffs as early as this weekend - just days before the European Union was set to make good on threats to retaliate on $2.2 billion worth of US exports.
To soften the blow to US steel makers, the Bush administration may keep a steel import licensing and monitoring system in place, according to industry sources.