EU readies hit list of U.S. products
Steel tariffs trigger US$2B in possible trade sanctions
Patrick Lannin -- Reuters
BRUSSELS - The European Commission has decided which U.S. products it wants to hit with US$2-billion of trade sanctions in a row with Washington over steel, a spokesman for the European Union's executive arm said yesterday.
The administration of George W. Bush, the U.S. President, has infuriated the EU by setting tariffs of up to 30% on steel from Europe, Asia and Latin America, to help struggling U.S. steel producers.
Brussels is considering retaliation against U.S. goods and trade steps to protect its steelmakers.
"The commission has today provided member states with what it considers would be an appropriate list to be submitted to the WTO [World Trade Organization] in order to protect our rights in the future to be able to impose countermeasures on the United States over steel," said Anthony Gooch, a commission spokesman.
The EU, Japan and Australia have appealed to the WTO, which arbitrates trade rows, to get the U.S. steel duties overturned, although a decision on this could take a year.
The compensation demand and possible retaliation are also part of EU tactics.
Mr. Gooch stressed that such retaliation would only come into force if attempts at getting compensation in the form of lower U.S. import duties on other goods failed.
Mr. Gooch declined to comment on the contents of the list but EU sources say textiles, steel and citrus fruits would be included.
Asked about the motivation behind the move, Mr. Gooch said the point of countermeasures was to encourage the United States to bring itself into line with WTO rules.
A Wall Street Journal report said EU retaliation would target goods from states that are politically sensitive for Mr. Bush, such as Florida, Wisconsin, Pennsylvania and West Virginia, where the President managed to grab victory by what were razor-thin margins in the 2000 election.
The list could include Harley-Davidson Motor Co. motorcycles and orange juice.
EU sources said the bloc would probably target citrus fruit and textiles, as well as U.S. steel products.
The newspaper said the strategy was to get the White House to change course on the steel tariffs by hurting regions and companies the Bush administration needs politically.
While refusing to comment on any political motive, Mr. Gooch said the United States had used such tactics in past disputes with the EU over bananas and hormone-treated beef.
The United States had targeted French cheese and wine because Paris was seen as driving European protectionism.
The commission is also drawing up plans for steel quotas and tariffs, known as safeguard measures, to protect the European market from a surge of steel imports that are barred from the United States.
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