NEW YORK (CNN/Money) - President Bush took the first step toward intervening to end the West Coast port dispute Monday, a day after talks between the two sides broke down.

A tugboat maneuvers through waiting freighters on the Columbia River near the Port of Vancouver in Vancouver, Wash. A lockout at West Coast ports has left about 200 ships anchored waiting to load or unload cargo.

Labor Secretary Elaine Chao said Bush named a board of inquiry to consider the impact of the dispute that has choked off trade between the United States and Asia since Sept. 27.

Establishing the board is a step the president must take before he can exercise powers under the seldom-used Taft-Hartley Act to seek a court order forcing a reopening of the ports for an 80-day cooling-off period. The board is expected to report its findings Tuesday, and Bush can seek a court order immediately afterward.

"The country has been patient, we have been patient, but now ordinary Americans are being seriously harmed by this dispute," Chao said.

The dispute is causing problems for many sectors of the U.S. economy, including retail, manufacturing and agriculture. The cost of the work stoppage now is estimated at about $2 billion a day, and Chao said layoffs will grow at additional factories if they run out of necessary parts.

She also said produce and other food exports are rotting in containers and on docks waiting to be shipped, and the loss of those shipments can devastate family farmers and ranchers. There are 200 ships anchored off the coast waiting to load and unload cargo.

Chao noted that military cargo on commercial ships is being affected by the port shutdown, but a spokesman for the Pacific Maritime Association, the management group that represents shipping lines and terminal operators and has locked out the union members, said Monday that military cargo is being handled by union members despite the dispute, as well as cargo bound to and from Alaska and Hawaii.

However, a Labor Department spokesperson said that both the PMA and the ILWU define military cargo more narrowly than the DOL does. The definition of military cargo used by both labor and management might not include commercial goods destined for military use, and military cargo shipped in commercial vessels, sometimes mixed with commercial goods.

At a Monday news conference, PMA CEO Joseph Miniace denied that management had sought to force presidential intervention by locking out the union and refusing to reopen the ports. He said he gave the union the opportunity as late as Sunday night to return to work under terms of the expired contract for 90 days while negotiations continued.

"I'm very, very sorry it came down to this," he said. "We tried to avoid it. We gave the union every opportunity to avoid it. They said no."

Labor Secretary, Elaine Chao, discusses President Bush's decision to intervene in West Coast port lockout. Play video (QuickTime, Real or Windows Media)

International Longshore and Warehouse Union President James Spinosa said the union offered to go back to work under the old contract for seven days and was turned down by management.

"It is clear from PMA's latest proposal that they never had any intention of making an agreement," Spinosa said Monday. "Their strategy has been all along to use the lockout to push this situation to crisis and get the government to bail them out with the Taft-Hartley injunction."

Union officials say that a cooling-off period will only delay an eventual settlement of the dispute, not solve the problem. A Labor Department official said that most port labor disputes in the past that prompted Taft-Hartley being invoked were not resolved during the cooling-off period.

Miniace said that the union's offer to return to work for seven days was conditioned on PMA's dropping its key negotiating demand for greater use of technology, which he called unacceptable to management. A union official said the offer to return to work for seven days was made without condition.

Business groups that had been pressing for presidential action welcomed the intervention.

"Obviously I think this is a necessary first step because the contract negotiation unfortunately broke off this weekend and doesn't seem likely to be restarted," said Robin Lanier, executive director of the West Coast Waterfront Coalition, a group that represents the nation's major importers and exporters who depend on the ports. "We have to do something to reopen ports. The impact is going to get much worse over time."

This is the first time that Taft-Hartley has ever been invoked in the case of a lockout of unionized workers by management. In the past it was used in the case of strikes or threatened strikes by a union or unions.

A Labor Department attorney said Monday that if a judge orders the two sides back to work, the union will be ordered to work at normal levels of productivity. But Lanier and some other observers expressed concern Monday that union members will not work productively if the ports are reopened.

"Taft-Hartley is not a terribly effective tool. It's pretty much a lead pipe cinch that if there is an order to end this, we will not have the most productive reopening of the ports," Lanier said. "That's why I was hoping there would be a negotiated settlement. But that's not going to happen."

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The ILWU has denied throughout the last month that it was engaged in any slowdown. Union spokesman Steve Stallone said that it will be impossible to have normal productivity once ports reopen due to the backlog of cargo that needs to be moved. Even Miniace concedes it will take a good six weeks to work through the backlog of cargo that has built up in the last 10 days.

"It was unsafe out there before," Stallone said. "We've had five people die in the last six months from the speed-up of work that has happened. It's going to be hell out there now; we don't want to bury any more people for PMA's productivity."

Under a presidential order, management would have arbitration procedures in place to challenge any alleged slowdown. But that can be a cumbersome process and some worry that a presidential order won't be enough to clear the backlog of freight.

"You can rule people back to work but you can't order them back to work at high efficiency levels," said John Martin, president of a leading maritime economic consulting firm.

It is conceivable that Bush could seek an order to have the two sides return to work and have that request denied by a judge, which happened in 1978 when then-President Carter last invoked the act to try to end a mine workers dispute. But most requests for court orders have been granted in the past.