US loses steel war, faces EU sanctions

In another stinging rebuke to US trade laws, the World Trade Organisation ruled that American tariffs on steel imports violate global rules.

Washington immediately said that it would appeal the decision and that the tariffs would remain in place. In response, the European Union stepped up plans to price US imports out of European markets.

In a 968 page ruling, a three-member panel of trade experts said that the “safeguard” duties of up to 30% introduced by the Bush Administration were out of line with WTO rules.

President George W Bush had justified the duties as necessary protection for domestic steel producers against a flood of cheap imports during a period of restructuring.

The final WTO report confirmed an interim ruling issued earlier this year and upheld complaints filed jointly by the EU, Japan, South Korea, Norway, Switzerland, China, New Zealand and Brazil.

In a joint statement, the eight called on the US to remove the duties “without delay.”

The EU said it was ready to impose €1.9bn in retaliatory duties on US imports.

“It’s a big legal victory for us all, which we now have to transform into an economic victory,” said EU Trade Commissioner Pascal Lamy.