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Wednesday, 6 March, 2002, 16:26 GMT
Blair says US steel move 'wrong'
Port Talbot steel works
UK steel works have already restructured
Prime Minister Tony Blair has described the US decision to impose tariffs on steel imports as "unacceptable and wrong".

President Bush is risking a trade war
President Bush sparked anger in UK
Mr Blair, facing MPs in the weekly prime minister's question time in the House of Commons, has said he wants to get the US decision reversed.

He also faced calls from the opposition Conservative Party to apologise to British industry because of his support for Labour donor and steel tycoon Lakshmi Mittal.

Mr Mittal's US operation was one of the companies pushing for tariffs to be slapped on imported steel.

'We've got a problem'

Conservative leader Iain Duncan Smith accused the prime minister of being more interested in backing his rich friends than standing up for British industry.

Mr Duncan Smith said: "We've got here a problem because the company you celebrated as a British company actually spent $600,000 lobbying the US Government to impose tariffs on steel imports.

Tony Blair was on seriously shaky ground here. His big mate George Bush had ignored all his pleas and gone ahead with the tariffs on steel

Nick Assinder's verdict on prime minister's questions
click for more

"It took you 30 seconds to write a letter supporting a non-British company producing anti-British policies, yet it takes you months and months to write a letter to the US president standing up for British interests."

Mr Blair said he would take no lessons from a Conservative Party that while in Government "destroyed 100,000 British steel jobs".

Of the US tariffs he added: "It is important now that together with other European countries we pursue the right remedies through the World Trade Organisation."

'Breaking rules'

Earlier, the official spokesman for Mr Blair, who wrote to and spoke on the telephone to US president George Bush last week, said the UK and EU believed the US action broke world trade rules.

Trade and Industry Secretary Patricia Hewitt, who told the BBC she was "bitterly disappointed" with the tariffs, is to make a statement to MPs about the affair later on Wednesday.

She has already pledged: "We won't stand by and simply let them dump their problems onto us."

'Painful process'

US President George W Bush introduced the tariffs as part of a three-year plan to help the ailing US steel industry, which has been struggling to compete with cheaper products from abroad.

Tony Blair has written to Mr Bush and spoken to him on the phone about steel tariffs
Tony Blair has written to Mr Bush and spoken to him on the phone

Ms Hewitt said: "We're going to stand by our steel producers, because our steel workers are now some of the most productive in the world. They have gone through a very painful process of restructuring.

"And it is frankly because the Americans have not been willing to go through the necessary process of restructuring and modernisation and making their industry more productive that they've got a problem now."

'US should set example'

Downing Street, while attacking the tariffs, said the row would not harm the "special relationship" between the UK and the US: "The strength of the relationship is not whether we agree on everything, but whether we can handle issues like this."

Free trade really means... global free trade, not American free trade

CBI director-general Digby Jones

Last year the US imported 27.4 million tonnes of steel, of which 500,000 tonnes was from the UK.

Confederation of British Industry director-general Digby Jones warned that US tariffs would put UK jobs in steel and other manufacturing firms at risk.

"The US should be setting an example to the world about what free trade really means. It means global free trade, not American free trade," he said.

'Declaration of war'

UK producer Corus, which sells about 5% of its products to the US, urged the European Union to mount protective counter-measures.

And it also blamed the US steel industry for creating the problems which led to the tariffs in the first place.

"US steel producers' problems are caused by a failure to restructure and consolidate, not by imports which actually declined by 20% in 2001," the spokesman said.

Nick Clegg, East Midlands Euro MP for the Liberal Democrats, said the move was "shocking" and an "a form of economic vandalism".

Union leader Bill Morris said: "The 30% tariff is a declaration of trade war on the UK and Europe steel industry."

The BBC's Brian Milligan
"The scene is now set for a messy row"
UK Trade and Industry Secretary Patricia Hewitt
"We are bitterly disappointed that Mr Bush has gone ahead with this"
Chief Executive of Allied Steel, Graham McKenzie
"The problem will be the diversion of steel into other markets"
See also:

05 Mar 02 | Business
US steel tariffs anger allies
06 Mar 02 | UK Politics
Assinder's Question Time verdict
06 Mar 02 | Business
Steel producers attack US tariffs
06 Mar 02 | UK Politics
Blair faces new 'Steelgate' row
05 Mar 02 | Business
Q&A: World steel dispute
01 Feb 01 | Business
Corus cuts 6,000 steel jobs
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