Retaliation threat grows over US steel tariffs

The World Trade Organisation is set to adopt a report next week that declares US steel tariffs illegal, opening the way to rapid retaliation from some of its biggest trading partners.

WTO officials confirmed that the report is on the agenda for the December 1 meeting of the organisation’s Dispute Settlement Body following a request from the European Union and seven other nations.

Adoption is a formality and cannot be blocked by the United States.

The 15-nation EU has threatened tariffs on €1.8bn worth of US imports, pricing many goods – from orange juice to pyjamas – out of the European market, unless the administration of President George Bush removes the duties immediately.

The Norwegian government on Friday said it would begin imposing a 30% duty on roughly £8 million worth of American imports beginning on December 6. Its list includes steel products, apples, gas stoves and hunting weapons.

In Tokyo, Kyodo News reported on Saturday that Japan would also slap a 30% tariff on €71m in US steel products if Washington does not act by next Sunday.

Bush said he imposed the tariffs in March 2002 to give the ailing US steel industry breathing space to modernise and consolidate. They are scheduled to remain in place until March 2005.

The EU, Norway, Japan, Korea, China, Switzerland, New Zealand and Brazil challenged the legality of the tariffs under world trade rules and won. The United States appealed but lost again in a ruling issued on November 10.

By asking for the issue to be considered on December 1, the EU and its allies are turning up the pressure. They could have held off until December 10 – the final day for adoption under WTO rules – to give President Bush more time to comply with the WTO’s ruling.