EU threatens trade sanctions on US

The EU has selected politically sensitive US products to punish with tariffs next year if Washington does not quickly repeal an antidumping law ruled illegal by the World Trade Organisation.

The list submitted to the WTO this week targets “vocal US sectors that could help Congress focus its mind on compliance,” said EU trade spokeswoman Arancha Gonzalez in Brussels.

They include textiles, sweet corn – aimed at farmers – and heavy machinery made by companies like Caterpillar, which is based in Illinois, the home state of US House Speaker Dennis Hastert.

Gonzalez said the sanctions could go into force “early next year” unless Congress, which returned for a lame-duck session this week, repeals the three-year-old legislation.

“There is still a chance that the US changes the legislation,” Gonzalez said. “We hope this takes place now.”

There was no immediate American reaction.”

The EU was joined in its complaint by seven other countries: Brazil, Canada, Mexico, South Korea, Japan, India and Chile.

They all got authorisation to impose sanctions from the WTO in August, two years after the global trad referee first ruled the US legislation was illegal.

The law, known as the Byrd amendment, allows American companies to receive proceeds from antidumping duties levied on foreign rivals.