Steel spat could mean wider worries

Steel is big business, but its importance is political

By James Arnold BBC News Online business reporter

The trouble with all these massive trade disputes is working out why anyone should care.

Billions of dollars are usually involved, and most people know that where billions of dollars are concerned, jobs and livelihoods are invariably affected.

But among the dreary formality and tricky terminology of international trade, all this talk of tariffs and quotas often seems impossibly remote.

Is this current steel row any different?

From specs to Space Shuttles

One obvious cause for concern is that steel is absolutely central to our daily lives.

Don't invest in cutlery just yet

In the breathless words of the American Iron & Steel Institute: "Steel is the backbone of bridges, the skeleton of skyscrapers, the framework for automobiles.

"It is the high-strength, lighter-than-plastic frames for eyeglasses; it's the stronger, more durable frame in housing; it's the high-tech alloy used in the Space Shuttle's solid fuel rocket motor cases; and it's the precise surgical instruments used in hospital operating rooms around the world."

Some analysts are already speculating that the US import curb will cause a surge in prices for steel, thereby increasing the cost of thousands of everyday items.

Surplus becomes glut

In fact, the opposite may be true.

International steel production has surged in recent years, mainly thanks to booming output from emerging markets in the former Soviet Union and Asia.

All this Chinese, Russian and Ukrainian steel will find it harder to get into the US, its main market, so will have to be dumped elsewhere around the world, largely in Europe and Japan.

Although prices in the US should hold up, and even rise, the rest of the world could experience a further slump - good news for consumers, if not so cheering for those working in the industry.

Dicing with Doha

But while fears of price rises may be exaggerated, there are deeper reasons for consumers to be nervous.

Steel pops up in the most surprising places

Trade disputes, especially transatlantic ones, are not unusual, but this one looks particularly severe.

It is inevitable that the dispute will stall - or even completely derail - progress on the Doha round, the vast global trade agreement so painstakingly put together late last year.

If Doha came apart, the glacial process of liberalising trade in a vast range of industries would be imperilled.

This could have implications for issues as varied as European farming subsidies and cheap medicines for developing countries.

Friend or foe?

Indeed, any form of transatlantic tension is bad news for ordinary people.

Europe's allies turn nasty

Since the launch of the War on Terror, It had seemed the case that Europe and the US were finding some common ground - something that could have paid economic dividends.

For the UK, America's closest ally, those dividends should have been particularly rich, maybe involving investment, favourable market access and the possibility for Britain to influence US policy.

This latest row shows that neither side is inclined to altruism when it comes to money.

Friends on the battlefield can still be rivals in the boardroom, it seems.