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Saturday, 20 April, 2002, 23:36 GMT 00:36 UK
US steel tariffs row escalates
US steel plant
The US tariffs aim to shore up its troubled steel industry
The European Union is threatening the US with punitive trade sanctions in retaliation for tariffs Washington is imposing on steel imports.


Unilateral, pre-emptive sanctions by Europe would flaunt world trade rules

US Trade Representative Josette Shiner

The proposed move would affect millions of dollars' worth of US exports ranging from citrus fruits to textiles.

However the US warned the EU on Saturday it would violate world trade rules by unilaterally imposing duties.

Last month, President George W Bush announced tariffs of up to 30% on steel imports to protect the ailing US steel industry.

EU officials estimate the tariffs will cost Europe's steel producers more than $2bn.

The World Trade Organisation has not yet ruled on the US tariffs, which are opposed by Japan and China as well as EU countries.

Applying pressure

The European Commission says that under WTO rules, the EU can impose counter measures from mid-June.

If the proposals presented to EU states are approved, 100% duties would be slapped on goods worth about $335m (377 million euros).

Goods targeted by EU
Citrus fruits
Rice
Stainless steel products
Firearms
T-shirts
Suits

The BBC's Europe business correspondent Patrick Bartlett says the European Commission's proposal is intended to increase pressure on the US to reconsider its decision on imposing tariffs.

It is thought that many of the products targeted have been chosen for maximum political impact in Republican-held states, our correspondent says.

Washington has defended the tariffs, of up to 30%, as necessary to defend its ailing steel industry from foreign rivals which have received significant state support.

US Trade Representative Josette Shiner criticised the EU move on Saturday, saying "unilateral, pre-emptive sanctions by Europe would flaunt world trade rules."

The EU has sought compensation for the steel duties in the form of lower US tariffs on other goods, but has drawn up the sanctions plan because its request has not so far been met.

The EU measures are intended to apply until a WTO ruling on the US tariffs, which is not expected until next year.

See also:

11 Apr 02 | Business
Global steel trade war hots up
09 Apr 02 | UK Politics
Blair 'seeks steel tariff deal'
03 Apr 02 | Business
US targets trade partners
27 Mar 02 | Business
EU agrees steel fightback
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