EU steps up trade war over steel

The EU has launched an official complaint with the WTO, demanding compensation for the economic losses caused by the US tariffs on steel.

In reaction to US President George Bush's decision on 5 March to impose up to 30 percent tariffs on most imported steel, the EU has filed complaints with the WTO. Similar complaints against the US were also launched by Australia, New Zealand and Japan. South Korea, Taiwan and Brazil are expected to follow soon. The EU has demanded compensation for the expected 2.3bn-2.5bn euros it stands to lose per year due to the US tariffs.

The first step in the legal battle is a 30 days bilateral consultation phase. If no agreement can be reached, a WTO dispute panel will be convened. The panel negotiations can take more than a year. Fearing a collapse of the "Doha round", the Secretary General of the WTO Mike Moore has urged the parties to find an amicable solution.

The EU is convinced it has a strong legal case, and if it does not receive compensation from the US, it is willing to take retaliatory actions by blocking US goods. These actions can be acceptable under the WTO rules, but they have so far never been legally tested.


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