This is a partial transcript from Your World with Neil Cavuto, December 2, 2003, that was edited for clarity.

Watch Your World w/Cavuto weekdays at 4 p.m. and 1 a.m. ET.

NEIL CAVUTO, HOST: Talk about being caught between a rock and a hard place. President Bush can either lift tariffs (search) on steel imports (search) and make them happy over there or keep the tariffs and make workers happy over here.

The president was in Pittsburgh Tuesday, America’s steel city. But in a half-hour speech at a fund-raising event, he did not mention the issue, not even once.

How does that make the head of one of the nation’s largest steel companies feel? Joining us now is Wilbur Ross himself. He is the chairman of International Steel Group and the CEO of WL Ross & Company.

Good to have you.


CAVUTO: Now is the president going to let you down?

ROSS: I don’t think so. I think if he does do something about the tariffs, he’ll put in some other kind of a measure.

CAVUTO: Like what?

ROSS: Well, for example, you could simplify the 201 process, which is what had led to the tariffs to begin with. It cost tens of millions of dollars and a couple of years to get that hearing completed. Simplifying that, de-bureaucratizing it, will be a big help in case there’s another upsurge in important dumping.

CAVUTO: You know, a lot of your critics, Wilbur, and those of the steel industry are saying, "Look, you’ve had your chance to get your act together," not you specifically but the companies. The steel users are saying, drop the stupid stuff.

ROSS: Well, some people calling themselves steel-users are doing that. There are very few cries from legitimate steel-users. It’s mostly a group called SETAC, which is actually funded by the foreign steel producers. That makes...

CAVUTO: So you say they have an agenda?

ROSS: Yes, they have their own agenda. The independent group, the International Tariff Commission, did a survey of the 425 biggest steel- users, and a majority said neither their employment nor their capital spending would be affected, whether there were tariffs or not.

CAVUTO: Let me ask you, though, your claim to fame as an investor is you dive in and you buy risky, beaten-up properties. You make a mint doing so. You did so with LTV and Bethlehem, and some of the others. But there does seem to be a feeling out there, Wilbur, that there needs to be a lot more of that scouring around.

ROSS: Well, I think there is and we’re prepared to do a little more.

CAVUTO: Really?

ROSS: Yes.

CAVUTO: So what are you going to be left with, two or three players on, all of a sudden?

ROSS: Well, I think most American industries are going to have to consolidate. For example, we have now invested in the textile industry as well. We bought Burlington Mills, and we’re trying to buy Cone Mills.

What’s wrong with American industry in part is it’s over-populated with under-producing activities. The steel industry now has three players: ourselves, U.S. Steel and Nucor, that constitute more than half.

CAVUTO: Yes, but these are all the players who have bit the dust over the last few years. It goes on and on. You can see the names as well as I can. But how much further do we have to go?

ROSS: Well, I think unless we started to enforce our trade agreements the worst is yet to come. And the reason...

CAVUTO: You know what happens, though, with trade wars, that they get ugly. And now even the Chinese are claiming, you know, we’re going to slap fines on you, the Europeans are going to slap fines on you. Then we said we’re going to slap tariffs on bras coming out of China.

ROSS: Sure, sure, sure. But that’s a little like the argument for unilateral disarmament. The fact is we’ve been in a trade war right along, and we’ve been losing it.

CAVUTO: Didn’t we do this in 1930, Wilbur, and we had all hell to pay?

ROSS: The world was quite different in 1930 from what it is right now. Quite different in a lot of regards.

My quarrel is not so much with China. China has legitimately lowered costs twice, but a majority of our trade deficit is with three high-cost areas: Europe, certainly not low-cost; Japan, incredibly high costs; and Canada. The reason we have a trade deficit with those countries is, by and large, they don’t play by the rules. They are not fundamentally cheaper than we are.

CAVUTO: So if the president bends on this tariff issue, do you feel he will have let you down?

ROSS: I think if he bends and does nothing else he will have made both an economic and a political mistake. But I don’t think he will. I believe if he does do something with the tariffs, he’ll invoke some other kind of measure to try to make sure that unfair trade doesn’t occur.

You notice lately his rhetoric is a little different. He isn’t just saying "free trade," saying "fair trade." Fair trade is what should be our objective, and fair trade doesn’t mean we’re patsies and everybody takes advantage of us.

CAVUTO: All right, Wilbur Ross we’ll see what happens. International Steel Group, world-famous investor, still like one of the richest guys on the planet.

Wilbur Ross, thank you very much.

ROSS: Thank you, Neil.

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