Timken (NYSE:TKR) basked in the glow of investor adulation Thursday after the maker of bearings and specialty steel products announced that earnings for the first quarter and all of 2005 are expected to be higher than previously anticipated. Shares in the company closed the day up nearly 14%. While Timken's news was certainly good, changes occurring in the political sphere threaten to rain on its parade.

Timken indicated that it now foresees first-quarter earnings of between $0.57 and $0.62 per share, up from a range of $0.38 to $0.43. Full-year income, meanwhile, is now projected to be between $2.05 and $2.20 per share, vs. an earlier forecast of $1.70 to $1.85.

The Canton, Ohio-based outfit admitted that it has seen a slowdown in the North American light-vehicles segment. This is hardly surprising, considering General Motors' (NYSE:GM) recent woes and the weakness in Ford's (NYSE:F) sales. These soft spots aside, Timken expressed confidence in the strength of the "global industrial market." One of the areas the firm singled out as robust was the aerospace industry. Timken evidently holds a fairly strong position in this space; earlier this month, it disclosed that it was hiking prices on remelted aerospace alloys and air melt stainless steel by 5% to 10%, a hike that apparently hasn't hampered sales.

Timken's faith in the global market is somewhat surprising, however, given its participation in a protectionist arrangement created by federal law. The Continued Dumping and Subsidy and Offset Act (CDSOA) places duties on foreign products sold in the U.S. that are believed to be illegally subsidized or dumped. Revenue from the duties is then given to companies that claim they have been hurt by foreign practices.

According to Forbes, however, the CDSOA may not be long for this world. The World Trade Organization has already come down against it. The Bush administration and members of Congress, meanwhile, are pushing for its repeal. For Timken, the death of the CDSOA could be significant, since the law allowed for the company to receive $44.4 million after expenses. Given that Timken's net income in 2004 was $135.7 million, the disappearance of the CDSOA could be painful.

For more, see: "Timken: A Load of Value?"

Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.